ENERGY POVERTY AND ECONOMIC DEVELOPMENT IN NIGERIA: EMPIRICAL ANALYSIS (original) (raw)
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The study used time series analysis to examine the impact of electricity consumption on inclusive growth variables during 1980-2012 years. Methods of analysis were pair-wise Granger causality test and ordinary least squares (OLS) techniques. The results revealed a bi-directional causality between industrial sector electricity consumption (INDEC) and poverty (POV), but a unidirectional causality from unemployment (UNEMP) to residential electricity consumption (REC), from poverty (POV) to residential electricity consumption (REC), industrial electricity consumption (INDEC) to gross fixed capital formation (GFCF), and initial per capita income (IPCY) to unemployment (UNEMP). The OLS estimates revealed that REC, INDEC and commercial electricity consumption (COMEC) were inversely related to POV. The results further showed positive relationship between lagged values of unemployment (UNEMP t-1) and POV. Also, IPCY and COMEC were inversely related to UNEMP, but POV was positively related to UNEMP. Consequently, the paper concluded that electricity consumption was capable of tackling poverty and unemployment problems in the country and as well foster inclusive growth.
Analysis of energy poverty and its implications for sustainable development in Nigeria
Environment and Development Economics, 2015
This study estimates and analyzes the incidence and determinants of energy poverty in Nigeria based on a simple multidimensional energy poverty index that it constructed. It also highlights the implications of energy poverty for sustainable development in Nigeria. The headcount ratio and the logistic regression technique are used. The study utilizes the Nigeria Living Standard Survey data set of 2004, obtained from the National Bureau of Statistics. The estimates show that energy poverty is pervasive in the country; it afflicts over 75 per cent of the population. The determinants of energy poverty in Nigeria include household size; educational level, gender and age of household head; general poverty; region of residence; and proportion of working members in the household. Efforts should be made to adequately tackle the problem of energy poverty in Nigeria. This is a major way to put the country on the path to rapid and sustainable development.
The aim of this paper is to investigate the relationship between total energy consumption and poverty rate in Nigeria. To achieve this purpose the study employs ordinary least square regression analysis and the cointegration analysis to test for the long run relationship. The study also use the Granger Causality test to ascertain if energy consumption Granger cause poverty or otherwise. The empirical results show that a long run co-integrated relationship exists between total energy consumption and poverty rate in Nigeria. The long-run co-integrating regression result reveals that if total energy consumption is increased by one percent poverty rate will decrease by 0.33 percent. We also found a strong causal relation which runs from total energy consumption to poverty rate in Nigeria. These findings clearly indicate that energy consumption has a significant impact on poverty rate in Nigeria. The study recommends that there is need for the government to make energy available for the citizens so as to make them self-reliant-thus increasing employment opportunities, income level and reduce poverty rate in Nigeria.
2014
This study explored empirically the 'Energy Sector as a Critical Sector to Nigeria Economic Development: With Perspective to Electricity Subsector' the study covers the period of 1981 2011. The study is borne out of the curiosity to determine the importance of electricity to the socioeconomic development in Nigeria having relegated its role as "electricity is just an intermediate input". The research takes analytical/quantitative dimension; 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.
This study explored empirically the ‘Energy Sector as a Critical Sector to Nigeria Economic Development: With Perspective to Electricity Subsector’ the study covers the period of 1981-2011. 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 research takes analytical/quantitative dimension; 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.
The Dynamic Analysis of Electricity Supply and Economic Development: Lessons from Nigeria
Journal of Sustainable Society, 2013
This paper explores the relationship between electricity supply and economic development in Nigeria using annual time series data. The paper emphasized the need for the correct specification of the model on the basis of which estimation would be valid. It carries out stationarity, cointegration tests and estimation of the model using ordinary least squares in the context of error correction mechanism (ECM). The results showed that Per Capita GDP, lagged electricity supply, technology and Capital are the significant variables that influence Economic development in Nigeria. One strong outcome of the study is that despite the poor state of electricity supply, it influences economic development in Nigerian but its impact is relatively very low. It is recommended that efforts should be geared towards the improvement of technology and that the various power projects should be completed with state of the art technology as this will ultimately reduce power loss and boost electricity supply vis-à-vis economic development.
IMPLICATIONS OF POOR ELECTRICITY SUPPLY ON NIGERIA'S NATIONAL DEVELOPMENT
Article History Since 2005, the Federal Government of Nigeria has undertaken a long-term structural reform of the power sector to improve the provision of electricity to its citizens. The government has developed the power sector from a single state-owned utility to an unbundled system with private participation and ownership of assets across generation and distribution. This study contributes to the existing literature that unravels the implications on Nigeria's National Development. This study is situated within the output-oriented approach. This study uses new estimation methodology with data obtained from various qualitative and quantitative secondary sources while content analysis and table and pie chat were used in its analysis. Furthermore, the findings show that poor electricity supply has resulted to decay and collapse infrastructure, closure of industries as well as a rapid decline in the availability of social amenities like potable drinking water, improved health care services, etc.
Impact of Electricity Consumption on Economic Growth in Nigeria
International journal of humanities & social studies, 2020
Impact of Electricity Consumption on Economic Growth in Nigeria 1. Introduction One of the salient keys impeding growth in the Nigerian economy is poor amount of electricity generation, distribution and consumption in the country (Joy, 2014). The poor electricity supply is believed to force businesses to depend on expensive and highly polluting off-grid self-generation which therefore puffed-up the cost of production and led to the exited of some businesses in Nigeria. As submitted by US Congress (1991), an increase in energy services (i.e. supply and consumption) is a prerequisite for achieving the desired growth in an economy and increasing the living conditions of developing economies. Although the statistics for Nigerian electricity generation as submitted by Energy Information Administration indicates an upward trending over the past three decades, trending from 11.4billion kWh in 1986 to 29.4billion kWh in 2016, its effects on the economy are relatively low due to population growth and the consumption rate of the people. The total electricity consumption rate of Nigeria as of 2016 was 24.72 billion kWh of electric energy per year which makes an average of 130kWh per capita (World Bank, 2018). However, Ojinnaka (2008) claimed that the amount of energy consumed in an economy determines the size of its national product. This implies that the scale of energy consumption per capital serves as a significant indicator of economic modernization. Countries with higher per capita energy consumption are ranked more developed than countries with low per capita energy consumption. The significance of energy usage in the developmental process of an economy cannot be overemphasized. Energy could serve as a medium to boost national income via the exportation of its products; it could also secure job opportunities and promote the living standard of workers by increasing their wages and salary; and cause positive changes in both socioeconomic activities and the infrastructures used in the exploitation of the energy resources. There is no doubt energy plays a crucial role in generating wealth in Nigeria by aiding and supporting the activities of sectors in the economy. There is a complement identified between energy sector products (such as petroleum and electricity) and other sectors in an economy which includes: agricultural sectors, commerce, mining, and manufacturing which adds up to form a needful output (Amusa & Leshoro, 2013). Although, Nigeria is blessed with copious energy resources, yet, the nation often crashes into an energy crisis. As stated by Auty (1993), a situation whereby an economy is rich in natural resources and also facing intense private privation is known as 'Dutch disease syndrome' or 'resource curse', which has been believed to exist in Nigeria.
Energy Poverty in Sub-Saharan Africa: Evidence for Nigeria
Karl Loic Nguetcha, 2022
Energy poverty is a common problem for every country in sub-Saharan Africa and is mostly driven by the lack of electricity. In Nigeria, the failure of the government to fix the power outage has been connected to Nigeria’s slow economic growth by affecting human social capital. This research would examine the residential, educational, and environmental implications of the lack of power in Nigeria, to determine the relationship between electricity consumption, school enrolment, and energy poverty measurement in Nigeria. Also, to investigate the causes of non-reliable power systems. The study used time series annually from 1990 to 2020. The study shows that energy poverty is very much present in Nigeria and is shaped by the lack of electricity which has damaging effects on Nigeria’s residential, educational, and manufacturing sectors through electricity consumption. The study used unit root test (ADF and PP), lag length criteria, ARDL model and bounds test, and ECM (error correction model). Findings showed that at difference, all the variables are significant and so stationary, and the PP test is also used to support it. Following lag length criteria, lag 2 was the best option. F- statistic is greater than I (0) and I (1), and T-Statistic is too. ECM showed that the correction of the previous error will be done at a speed of 104%. Therefore, to solve the problem, TCN can update and expand transformer capacity and the new voted law that would empower state governments to generate and transfer electricity on their own should be implemented. The fact that access to clean cooking should be increased is a gender problem as well and can save many lives. The grid needs to be renovated. Keywords: Energy poverty, Electricity, Clean cooking, Education, Climate change, Nigeria.