ASSESSING THE EFFECT OF ENERGY CONSUMPTION ON ECONOMIC GROWTH IN NIGERIA (1980-2023)
Aliyu Ahmad Yusuf and Abdul-Jalili Surajo
Volume 11 Issue 1
Abstract
The aim of this study is to assess the effect of energy consumption on economic growth in Nigeria, adopting the time series data panning from 1980 to 2023 and the Autoregressive Distributed Lag (ARDL) modeling approach, the study employed real GDP growth as the dependent variable with electricity consumption rate, Liquefied Petroleum Gas consumption, and inflation rate as dependent variables. The findings reveal that electricity consumption rate (ELCONSR) and liquefied petroleum gas consumptions (LPGCONS) are positively related to economic growth in the long run. While, inflation rate (INFLR) is negatively related to economic growth and statistically insignificant in the long run. The results of the estimates also indicated that the coefficient of liquefied petroleum gas consumptions is positive at both first and second lags and statistically significant only at first lag in relation to economic growth with the inflation rate having positive coefficients in the short run but statistically insignificant. The findings of the study further showed a negative coefficient for error correction technique with the speed of adjustment of - 0.089 percent for the convergence of long run equilibrium. The study also recommends for adequate energy infrastructure to ensure stable and improved electricity availability for consumption, to minimize and reduce the price of liquefied petroleum gas for improved household consumption rate, and to embark on sustainable monetary measures that will enhance adequate control of inflation to at least a single digit so as to enhance purchasing power in the economy. Keywords: Energy, Consumption, Real GDP, ARDL
Download Paper