Electricity Supply and Manufacturing Output in Nigeria: Autoregressive Distributed Lag (ARDL) Bound Testing Approach (original) (raw)
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International Journal of Energy Economics and Policy, 2016
This paper employs the autoregressive distributed lag technique to provide evidence of long run and short run relationship, as well as the causality between manufacturing productivity and electricity consumption in Nigeria for the period 1980-2013. When electricity consumption, capital formation and manufacturing productivity are applied as the dependent variable(s), the bounds test provides a proof of cointegration among electricity consumption, manufacturing productivity, and capital. Similarly, the findings demonstrated bidirectional causality between manufacturing productivity and energy consumption. Nigeria is along this line an electricity reliant nation. It is likewise a nation in which electricity consumption is rising with the manufacturing productivity. This demonstrates that electricity is a powerful determinant of manufacturing performance in Nigeria; accordingly, policy on energy should guarantee that electricity creates less negative effects on manufacturing productivity.
Electricity Consumption and Manufacturing Sector Performance: Evidence from Nigeria
International Journal of Energy Economics and Policy
This paper employs the autoregressive distributed lag technique to provide evidence of long run and short run relationship, as well as the causality between manufacturing productivity and electricity consumption in Nigeria for the period 1980-2013. When electricity consumption, capital formation and manufacturing productivity are applied as the dependent variable(s), the bounds test provides a proof of cointegration among electricity consumption, manufacturing productivity, and capital. Similarly, the findings demonstrated bidirectional causality between manufacturing productivity and energy consumption. Nigeria is along this line an electricity reliant nation. It is likewise a nation in which electricity consumption is rising with the manufacturing productivity. This demonstrates that electricity is a powerful determinant of manufacturing performance in Nigeria; accordingly, policy on energy should guarantee that electricity creates less negative effects on manufacturing productivity.
ELECTRICITY SUPPLY AND MANUFACTURING SECTOR OUTPUT IN NIGERIA
Energy Economics Letters, 2022
This study investigated the impact of electricity supply on manufacturing output in Nigeria using data from 1980 to 2019. By augmenting the endogenous growth model production function with key variables affecting manufacturing sector output, such as exchange rate and technology, which previous studies failed to capture. The result of the autoregressive distributed lag (ARDL) model revealed that electricity supply has a negative and insignificant relationship with the manufacturing sector output. Conversely, technology has a positive and significant relationship with manufacturing sector output in the short run. Thus, it was recommended that an adequate and stable supply of electricity and deploying modern technology should be on the front burner of the country's development policy. This steady supply will not only enhance the growth of the manufacturing sector but also lead to inclusive growth in terms of reducing poverty and unemployment in the Nigerian economy and promoting rapid economic growth.
Energy Policy, 2012
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European Scientific Journal, 2012
This study examines the impact of energy consumption on economic growth in Nigeria over the period 1980-2010. The short-run and long-run relationship between energy consumption variables and economic growth are estimated by using the newly developed autoregressive distributed lag (ARDL) approach to cointegration analysis. The results indicate a long-run relationship between economic growth and energy consumption variables. Although, the coefficient of coal consumption is positive but is statistically insignificant, while both petroleum consumption and electricity consumption have positive and are statistically significant on economic growth. Moreover, the coefficient of error correction model suggests that the speed of adjustment in the estimated model is relatively high and had the expected significant and negative sign.The study therefore recommends that government should strengthening the ongoing transformation agenda particularly on energy infrastructure to create sufficient energy supply. This can be done through service availability, affordability, and accessibility.
Electricity Consumption and Industrial Output in Nigeria
2020
This study investigated the effect of electricity consumption on industrial output in Nigeria. Time series data were used for the study, sourced from the Central Bank of Nigeria Annual Report, Statistical Bulletin, World Bank Idicator and the National Bureau of Statistics which spanned from 1981 to 2017. The study used Augumented Dickey-Fuller (ADF) and Philip Perron (PP) unit root tests to analyze the stationary state of the data. The study employed bound test co-integration, Auto Regressive Distributed Lag (ARDL) and pairwise granger causality techniques for empirical analysis. The bound test co-integration results revealed that there is no long run relationship among the variables. The ARDL results revealed that IELEC (Industrial electricity consumption), ELECGE (electricity generation) at lag 1 and ECP (electricity consumption price) have positive relationship with IND but not statistically significant. Also, CRIND (credits to industries) has direct relationship with IND but sig...
Electricity Supply and Output in Nigerian Manufacturing Sector
Journal of economics and sustainable development, 2016
This research examined electricity supply and the output of the Nigerian manufacturing sector. The major objective is to critically determine the impact of electricity supply on the manufacturing output in Nigeria. Numerous literatures only revealed the relationship between economic growth and electricity supply, with little empirical attention on the effect of electricity on the various sectors of the economy. This could lead to fallacy of decomposition because economic growth is a function of the performance of different sectors which certainly differ in their need for electricity. In response to this perceived gap, this study explores the relationship between electricity supply and manufacturing sector’s output in Nigeria. Time series data spanning the period between 1981 and 2013 were analyzed using Johansen Cointegration and Vector Autoregression tests. The results revealed that there exists a long run relationship between electricity and manufacturing output in Nigeria. It als...
Using autoregressive distributed lag bound test framework, the dynamics of financial development, economic growth, energy prices and energy consumption was investigated in Nigeria for the period of 1972Q1-2011Q4. The finding signifies that variables were cointegrated as null hypothesis was rejected at 1% level of significance. In the short-run financial development has significant negative impact on fossil fuel consumption, economic growth also shows the same relationship. However, energy prices have positive and significant influence on the consumption of fossil fuel. In the long-run however, financial development has insignificant negative impact on energy consumption, and economic growth has negative but significant impact on energy consumption, while energy prices has positive and significant impact on fossil fuel consumption. The policy recommendation remains that Nigerian authority should try to explore other alternative sources of energy in order to curb the adverse effect of fossil fuel consumption on the financial market and overall economic growth. Exploring the potentials of green energy is paramount in Nigeria which is more eco-friendly and contain less carbon emissions.
Using a neo-classical aggregate production model where capital, labor, real exchange rate and energy are treated as separate inputs, this study tests for the existence and direction of causality between economic growth and energy use in Nigeria at both aggregated total energy and disaggregated levels as crude oil, coal, natural gas and electricity consumption. Using the autoregressive distributed lag (ARDL) co-integration technique, the empirical findings indicate that there exists long-run co-integration among output, labor, capital, real exchange rate and energy use in Nigeria at both aggregated and all the disaggregated levels except for coal. Then using a VEC specification, the short-run dynamics of the interested variables are tested. This indicates that there exists Granger causality running only from GDP to electricity consumption. I thus propose policy suggestions to solve the energy and sustainable development dilemma in Nigeria as: enhancing and guaranteeing energy supply; enhancing energy efficiency to save energy; diversifying energy sources by exploiting renewable energy and drawing out appropriate policies and measures.
Analysis of Electricity Consumption and Economic Growth in Nigeria : An Ardl Approach
2019
This paper examines the relationship between electricity consumption and economic growth in Nigeria using the Autoregressive Distributed Lagged (ARDL) approach. The paper used quarterly time series data for economic growth and some selected variables electricity consumption, electricity supply, electricity loss and inflation rates. The results indicate positive and significant influence of electricity consumption on economic growth in both the short run and long run. However, there is other variables except inflation rates show insignificant contribution to economic growth in the long run. The result of the causality test also supports the electricity-led growth hypothesis in Nigeria. The findings suggest that increase in electricity consumption will contributes to economic growth in the country. It is recommended that electricity consumption should be considered when forecasting and making economic growth policies.