Energy Consumption and Economic Growth Nexus in Nigeria
Authors: Dr Modestus C Nsonwu
Abstract: This study is on the effect of Energy Consumption on Economic Growth in Nigeria. The study used the econometrics method of Autoregressive Distributed Lag (ARDL) error correction model to analyse time series data on Nigeria Growth Rate of Real Gross Domestic Product, electricity consumption, petroleum products' consumption and natural gas' consumption for the period 1981-2019. These data were obtained from World Bank International Data bank, World Bank Development Indicators, Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics among others. The findings of the study show that electricity consumption (ELEC) is a positive and significant determinant of growth rate of Nigeria Gross Domestic Product both in the long and short run. Petroleum product consumption has a positive and insignificant relationship with growth rate of Nigeria Gross Domestic Product. Consumption of natural gas has a positive and significant relationship with growth rate of Nigeria Gross Domestic Product at 10% level of significant. The study therefore recommends that government through the electricity generation companies (GENCOS) should generate more electricity at a reduced cost for domestic consumption that will reduce electricity tariff. This will propel growth in the industrial sector in particular and other sectors of the economy. Total overhaul of the power sector is highly recommended. The petroleum sector particularly our refineries should be made functional to meet the daily domestic demand of petroleum products which will enhance economic activities in the other sectors of the economy. Production and distribution of natural gas should be improved for a greater impact in the economic development of the country since its consumption indicated a positive relationship with growth rate of GDP.
Keywords: Energy Consumption, Real Gross Domestic Product, ARDL, Nigeria
Paper Id: 1314
Published On: 2022-04-20
Published In: Volume 10, Issue 2, March-April 2022
Cite This: Energy Consumption and Economic Growth Nexus in Nigeria - Dr Modestus C Nsonwu - IJIRMPS Volume 10, Issue 2, March-April 2022.