
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue XV October 2025 | Special Issue on Economics
www.rsisinternational.org
protection, education, and energy access programs (Ogunyemi, & Oladapo, 2025; Oyadeyi et al., 2024; World
Bank, 2023). Overall, the study fills an important gap by demonstrating that energy efficiency directly reduces
poverty in Nigeria, but also underscores the need for complementary policies to ensure that the benefits of the
energy transition are inclusive and equitable.
CONCLUSION AND POLICY RECOMMENDATIONS
This study investigated the nexus between energy efficiency, energy prices, and household poverty in Nigeria
within the framework of the Energy-Led Growth Hypothesis (ELGH) and Welfare Economics Theory (WET).
Using the ARDL estimation technique, the results revealed that energy efficiency significantly reduces poverty
in both the short and long run, underscoring its potential as a pro-poor driver of welfare within Nigeria’s energy
transition strategy. Conversely, energy prices were found to exert poverty-increasing effects, highlighting the
welfare risks of unbuffered tariff adjustments. Education (literacy) emerged as another significant poverty-
reducing factor, reinforcing the central role of human capital development in breaking the cycle of poverty.
Urbanization also showed strong short-run poverty-reducing effects, suggesting that access to infrastructure and
economic opportunities in urban areas can alleviate welfare deprivation. Other variables such as government
expenditure, household consumption, employment, and inflation produced weaker or statistically insignificant
effects, suggesting that their impact depends heavily on policy design, targeting, and institutional efficiency.
The findings carry important policy implications for Nigeria’s energy transition agenda. First, prioritizing energy
efficiency should be a cornerstone of policy, as efficiency measures not only reduce household energy costs but
also deliver long-term poverty reduction. This requires investment in efficient appliances, building standards,
and renewable-based off-grid systems, particularly in rural and peri-urban areas. Second, given the poverty-
increasing effect of energy prices, a gradual and socially sensitive approach to tariff reforms is necessary. Cost-
reflective pricing should be accompanied by targeted subsidies, lifeline tariffs, or direct cash transfers to shield
vulnerable households from welfare losses during the transition. Third, the significant role of education calls for
stronger investments in human capital development, including literacy programs, vocational training, and skills
upgrading to improve household resilience and income-generating capacity. Fourth, the positive short-run role
of urbanization implies that urban infrastructure expansion such as electrification, housing, and transport, can
complement energy efficiency efforts, but this must be balanced with policies to address rural energy poverty to
avoid deepening regional inequality.
Finally, the study emphasizes that energy transition policies should be embedded within a broader framework of
inclusive welfare economics, where fiscal expenditure is deliberately targeted at reducing vulnerability and
expanding opportunities. Public spending should prioritize investments in renewable energy infrastructure,
education, and social protection programs that directly reach poor households. By combining efficiency-oriented
reforms with redistributive policies, Nigeria can design an energy transition strategy that not only delivers
environmental benefits but also advances inclusive development and poverty reduction.
REFERENCES
1. Abubakar, I. R. (2024). Investigating the determinants of household energy choice in Nigeria. Energy,
Sustainability & Society, 14(1), 1–15. https://doi.org/10.1186/s13705-024-00467-2
2. Adenikinju, A. (2008). Efficiency of the Energy Sector and its Impact on the Competitiveness of the
Nigerian Economy. International Association for Energy Economics, 27(32), 131-139.
3. Apergis, N., & Payne, J. E. (2012). Renewable and non-renewable energy consumption-growth nexus:
Evidence from a panel error correction model. Energy Economics, 34(3), 733–738.
https://doi.org/10.1016/j.eneco.2011.04.007
4. Awotide, B. A., Abdoulaye, T., Alene, A., & Manyong, V. M. (2015). Impact of access to credit on
agricultural productivity: Evidence from smallholder cassava farmers in Nigeria. Agricultural Finance
Review, 75(3), 458–475. https://doi.org/10.1108/AFR-02-2015-0007
5. Barro, R. J., & Lee, J. W. (2013). A new data set of educational attainment in the world, 1950–2010.
Journal of Development Economics, 104, 184–198. https://doi.org/10.1016/j.jdeveco.2012.10.001
6. Bobasu, A., Dobrew, M., & Repele, A. (2025). Energy price shocks, monetary policy and
inequality. European Economic Review, 175, 104986.