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Energy Consumption and Economic Growth in Nigeria: Correlation or Causality?

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  • Bernard O. Muse

Abstract

This study examined the causal relationship between economic growth and energy consumption in Nigeria during period 1980-2012 and employed the co-integration test, OLS analysis, error correction model and pairwise granger causality test techniques. The cointegration test result revealed that there was a long run relationship among our variable of interest. The study found that electricity is an important factor in economic growth in Nigeria. The result is thus an indication that energy consumption enhances economic growth enormously. Furthermore, the result from causality test shows that there is a bi-directional casual relationship between total energy consumption and economic growth in long run. The policy implication of this finding was that the policy maker need improve the power sector so as to harness the potential of electricity in growing the economy.

Suggested Citation

  • Bernard O. Muse, 2014. "Energy Consumption and Economic Growth in Nigeria: Correlation or Causality?," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(3), pages 108-120.
    • Handle: RePEc:rss:jnljee:v3i3p1
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    Cited by:

    1. Lawrence U. Okoye & Alexander E. Omankhanlen & Johnson I. Okoh & Ngozi B. Adeleye & Felix N. Ezeji & Gideon K. Ezu & Benjamin I. Ehikioya, 2021. "Analyzing the Energy Consumption and Economic Growth Nexus in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 378-387.
    2. Oluseye Ibukun, Cleopatra & Temilola Osinubi, Tolulope & Nathaniel Oladunjoye, Opeyemi, 2021. "Growth-Led Energy Hypothesis In Nigeria: An Asymmetric Investigation," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(1), pages 31-45, June.
    3. James Tumba Henry & Bassey Enya Ndem & Ofem Lekam Ujong & Chijioke Mercy Ihuoma, 2021. "Electric Power Deficit and Economic Growth in Nigeria: A Sectoral Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 508-516.

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