Energy Sector is critical to Nigeria Growth and Development: Perspective to Electricity Sub-sector in Nigeria

Yusuf, Sulaimon Aremu (2014): Energy Sector is critical to Nigeria Growth and Development: Perspective to Electricity Sub-sector in Nigeria.

Abstract

This study explored empirically the ‘Energy Sector is critical Sector to Nigeria Economic growth and Development: Perspective to Electricity Subsector, the study covers the period of 1981 to 2011. The study is borne out of the curiosity to determine the importance of electricity to the socio-economic development in Nigeria having relegated its role as “electricity is just an intermediate input”. The quantitative technique is used in analyzing times series data on per capita GDP of Nigeria, Gross Capital formation as proxy of Capital, Post Secondary School Enrolment as proxy of Labour and Electricity consumption. Restricted Error Correction model (VAR) is used with the aid of Econometrics View Package (E- view). The study reveals that the long run relationship that exists between real gross domestic product (PCGDP) a proxy of economic growth/development and electricity consumption is not significant, while, there is existence of short run causality between electricity consumption and economic growth. Further investigation using Granger causality analysis reveals that the two variables granger causes one another. Attempt was made to analyse the Electricity Transmission Mechanism with respect to different subsectors of the economy as it is translated to economic development in the long run, if the sector is properly harnessed. This then bring the study to the conclusion that electricity is not just an intermediate input or resources of satisfying domestic needs alone but it is ‘a critical sector to economic development most especially to developing country like Nigeria’. Therefore necessary recommendations were made as a way forward to achieve the impressive, sustainable growth and inclusive development.

• Item Type: MPRA Paper
• Language: English
• Keywords: Electricity, Electricity Transmission Mechanism , Vector Error Correction Model (VECM)
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy

References

Adebola, S.S. (2011), Electricity Consumption and Economic Growth: Trivariate investigation in Botswana with real capital formation. International Journal of Energy Economics and Policy. www.ecojournals.com.

Akinlo, E. A. (2008), “Energy Consumption and Economic Growth: Evidence from 11 Sub Saharan African Countries”, energy economics, vol. 30, pp 2391-2400.

Alero, H. M. and Ibrahim, S. A. (2012). The Relationship between Energy Consumption and Economic Growth in Nigeria: A Causality Analysis. International Journal of Marketing and Technology, Vol. 2

Apergis and Payne. (2009). The Relationship between Energy Consumption and Economic Growth. Energy policy. Vol. 18 pp 5 – 9.

Bhattacharyya, S. C. (1995). Internalizing Externalities of Energy Use Through Price Mechanism: A Developing Country Perspective. Energy Environ 6(3):211-221..

Ebohon, J.E. (1996).Energy, Economic Growth and Causality in Developing Countries. Energy Policy. Vol. 24 No. 5 pp 447 – 453.

Eggoh, J. C., Bangake C. and Christopher R. (2011). Energy Consumption and Economic Growth Revisited in African Countries. Energy Policy. Vol. 39, 740 -749. journal homepage: www.elsevier.com/ locate/apenergy - williem

Ekpo, H. E. (2013). Promoting Inclusive Growth in Nigeria: Issues of Policies Reform, People Expectation and Private Sector Responses. Public Lecture delivered on 13th June, 2013 at University of Lagos, Akoka, Lagos.

Emeka, E. E.(2010). Causality Analysis of Nigeria Electricity Consumption and Economic Growth. Journal of Economic and Engineering. Vol. 4.

Iwayemi, A. (2007). Investment in electricity generation and transmission in Nigeria: issues and options. Department of Economics University of Ibadan, Nigeria.

Ishola W. A. (2005). Power Sector Reform in Nigeria: Challenges and Prospects. NES Annual Conference. Pg 181 – 200.

Jonathan, G. (2010). Road Map for Power Sector Reform (Chapter 1). The Reform Imperative, p. 1-23. Jourino (9). www.transcampus.org/journal

Kraft & Kraft. (1978). A Relationship between Energy Consumption and GNP. Journal Energy and Development, Vol. 3:401 – 403.

Margaret, T. O. (1998). Law of Environmental Protection: Material and Text: Caltop publication Nig. Ltd. Lagos.

Mustafa, B. (2008). Energy Consumption and Economic Growth in Turkey during Past 2 Decades. Energy Policy; Vol. 36, 118 – 127.

Munasinghe, M (1992).Energy Analysis and policy: Selected Works. Butterworth:UK

Nadia, S. O. (2012). Energy Consumption and Economic Growth: Evidence from Economy of N. A. Energy Economics. Vol. 35, 537 – 547. journal homepage: www.elsevier.com.

Odularo, G. O. and Okonkwo, O (2009). Does Energy Consumption contribute to Economic Performance: Empirical Evidence from Nigeria. Journal of Economics and International Finance, Vol. 1 (2, pp 44-58). www.academics journals.org.

Okarfor, E. E. (2007). Development Crisis of Power Supply and Implications for Industrial Sector. Retrieved from http/www.google.com.

Pressely, K., Wesseh, J. and Zoumara B. (2012). Causal independence between energy consumption and economic growth in Liberia. Energy policy. Vol. 50, 518 – 527. www.elsevier.com.

Saibu, M. B. and Jaiyeola, A. F. (2013). Energy Consumption Carbon Emission and Economic Growth in Nigeria: Implication for energy policy and Climate protection. (ICEPCP 2013) April 15 – 16.

Stela, Z. T. (2010). Energy Consumption and Economic Growth a Causality Analysis. Energy policy. Vol. 32, 582 -590.

Soytas, U. and Sari, R. (2009). Energy consumption, Carbon Emission &Economic Growth in Nigeria: Challenges Faces by an EU Candidate Member. Ecological Economics. Vol.68, 1667-1675. Journal homepage: www.elsevier.com/locate/enpol - presley.

Than, O., Alper, A. and Huseyin, K. (2010). Energy Consumption and Economic Growth Relationship; Evidence from Panel Data for Low and Middle Income Countries. Energy Policy.Vol. 38, pp 4422 – 4428.

Todaro, M. P. and Stephen C. S. (2005). Economic Development (9th ed.). UK: Pearson.

Uduma, E. (2009). Renewable Energy Development in Nigeria: The Environmental issues; Economic and Policy Review, April – June volume 15, No2, pp27-36.

Wolde-Rufael, Y. and Kojo M. Y. (2010). Energy Consumption, Pollutant emission and Economic Growth. Energy Policy, Vol. 32 1374-1382.

Wolde, R. Y. (2005). Energy Demand and Economic Growth: African Experience. Journal of Policy Modeling. Vol. 27, 891 – 903. Journal homepage: www.elsevier.com

Yusuf S. A. (2014). Impact of Energy Consumption and Environmental Degradation on Economic Growth in Nigeria.