The latest GDP report for the second quarter of 2022 released by the National Bureau of Statistics (NBS) showed that Nigeria’s electricity sector contracted by 11.48% year-on-year in real terms.
This is consistent with the 11.2% contraction recorded in the previous quarter (Q1 2022). In other words, the sector saw a loss of N15.4 billion from the N134.19 billion recorded in the corresponding period of 2021.
The sector, which was stated as electricity, gas, steam, and air conditioning supply by the National Bureau of Statistics (NBS), recorded impressive growth in the previous year, following a hike in electricity tariff rate. However, multiple grid disruptions and global energy crisis dampened productivity in the sector.
Highlights
- The Electricity, Gas, Steam and Air conditioning Supply sector contributed 1.39% to the nominal GDP in Q2 2022, a 0.33%-point decrease from the corresponding period in 2021. However, this was an improvement from the previous quarter’s 0.38%.
- In real terms, the sector saw a negative growth rate of 11.48%, a decline from the 78.16% recorded in the corresponding period of 2021. On the other hand, the aggregate GDP of the sector grew by 263.1% on a quarter-on-quarter basis.
- Meanwhile, Nigeria’s gross domestic product (GDP) grew by 3.54% year-on-year in real terms in the second quarter of 2022, an improvement compared to the 3.11% growth recorded in the previous quarter.
What you should know
- The contraction recorded in the electricity sector was attributed to multiple grid shutdown, which saw a large part of the country witness blackouts.
- In 2022 alone, the national power grid collapsed seven times, with the most recent coming on the 20th of July. The national grid failures inevitably led to power cuts, which meant fewer people purchased electricity.
- Similarly, the first half of the year was ravaged by high gas prices, which was cited as one of the major factors causing the grid collapses. Gas prices following the Russian-Ukraine war surged significantly across the country, as a result of a drop in supply.
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