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Causality between Manufacturing Efficiency, Energy Use and Economic Growth in Nigeria

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  • Olabode Eric Olabisi (Ph.D)

    (Department of Economics, Faculty of Humanities, Social & Management Sciences, Elizade University, Ilara-Mokin, Ondo State, Nigeria)

Abstract

Studies on whether manufacturing productivity with interaction of energy use promotes economic growth are of cardinal importance as a result of the fact that energy use measured in kilogramme of oil equivalent per capita is a major factor that engineers the growth of manufacturing productivity. Using the unrestricted Vector Auto-regression (VAR) approach, the study examines the causality between manufacturing productivity, energy use and economic growth in Nigeria from 1985 to 2018. The Augmented Dickey Fuller unit-root tests, Pairwise and Wald test statistics Granger causality tests were employed. Results reveal two-way causality between manufacturing productivity and economic growth in Nigeria. While economic growth and manufacturing productivity (MP) Granger cause energy use (EU) and not vice versa, jointly examined, MP and EU promote growth in Nigeria, GDP and EU promote MP, and GDP combined with MP enhances the use of energy in Nigeria. It is therefore recommended that adequate energy supply should be made available to the manufacturing sector for meaningful economic growth to occur in Nigeria.

Suggested Citation

  • Olabode Eric Olabisi (Ph.D), 2020. "Causality between Manufacturing Efficiency, Energy Use and Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(8), pages 671-675, August.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:8:p:671-675
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