FG tasked on accelerated power sector reforms for Nigeria’s recovery

The Federal Government has been urged to accelerate the power sector reforms to arrest electricity crisis derailing Nigeria’s recovery.

According to the Director /Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, the country’s emerging economic recovery could be weakened unless the government urgently accelerates reforms in the power sector.

The advice followed the latest report of the Gross Domestic Product (GDP) figures, showing that the economy expanded by 4.43 percent in real terms in the second quarter of 2026, its strongest quarterly growth in five years.

Analysing the figures, Yusuf pointed out that despite the positive headline growth in the second quarter, it was overshadowed by continued weakness in the electricity, gas and steam sector, which contracted by 10.63 percent during the quarter.

Although the contraction was an improvement on the 15.30 percent decline recorded in the first quarter, the CPPE boss said the performance remained unacceptable for an economy seeking to attract investment, expand industries and create millions of jobs.

In its policy brief on the Q2 GDP report made available to the Nigerian Tribune on Tuesday, in Lagos, Yusuf argued that a sustained recovery in electricity supply must become a central pillar of Nigeria’s economic and industrial strategy.

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According to him, power-sector reform should be accelerated as a central pillar of industrial and investment strategy.

Yusuf, who is a former Director-General, Lagos Chambers of Commerce and Industry (LCCI), said reliable electricity would have a multiplier effect across the economy, reducing the enormous cost businesses currently incur on diesel, petrol and alternative power sources.

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“Better electricity supply will lower production costs across manufacturing, agriculture, mining, information and communications technology, logistics and services.

It will also release business capital currently tied up in self-generation, allowing companies to invest more in expansion, employment and productivity,” the CPPE boss said.

He maintained that Nigeria cannot achieve sustained industrialisation while businesses remain heavily dependent on expensive self-generated electricity.

He called on government and regulators to accelerate investments in generation, transmission and distribution.

He also urged authorities to address persistent gas-supply constraints and liquidity problems in the electricity market.

Other recommendations include deeper metering, stronger commercial discipline, support for embedded generation and captive power, as well as greater deployment of industrial mini-grids and renewable-energy systems.

The CPPE boss also called for effective implementation of state electricity-market reforms under the Electricity Act, with clear accountability and measurable targets for delivering reliable electricity to industrial and agro-processing clusters.

The economist expressed that the power sector should no longer be treated simply as an infrastructure challenge but as a fundamental economic-growth issue.

According to him, a turnaround in electricity would strengthen virtually every other productive sector by reducing operating costs and improving competitiveness.

The call for urgent reforms comes against the backdrop of stronger performances across several areas of the economy.

The Q2 GDP growth of 4.43 per cent represented an improvement from 3.89 per cent in Q1 and 4.23 per cent in Q2 2025.

Oil-sector growth increased sharply from 2.57 percent in Q1 to 7.31 percent in Q2, supported by an increase in average crude oil production from 1.55 million barrels per day to 1.72 million barrels per day.

The non-oil economy also strengthened, rising from 3.94 percent to 4.31 percent, while the services sector grew by 4.60 percent and accounted for 56.62 per cent of real GDP.

Several productive sectors also recorded growth.

Construction expanded by 6.75 percent, financial and insurance services by 9.29 percent, real estate by 3.76 percent and transport and storage by 5.70 percent.

Information and communications technology remained one of the strongest-performing sectors, growing by 9.62 percent, while telecommunications expanded by 10.38 percent.

Domestic refining was another major growth driver, expanding by 43.94 percent in Q2 after recording 37.46 percent growth in Q1.

Manufacturing, however, grew by a more modest 3.24 percent, slightly below the 3.29 percent recorded in Q1.