Energy Consumption and Economic Growth Nexus in Nigeria: A Time-Series Analysis

This study examines the relationship between energy consumption and economic growth in Nigeria over the period spanning 1990 to 2022. It specifically investigates the roles of electricity consumption and natural gas consumption within an Autoregressive Distributed Lag (ARDL) framework. The study employs annual time-series data sourced from the World Development Indicators. Unit root tests reveal a mixture order of integration, of I(0) and I(1) among the variables, justifying the application of the ARDL bounds testing approach. The findings reveal the existence of a long-term relationship among the variables. Empirical results show that electricity consumption exerts a positive and statistically significant effect on economic growth, particularly through its lagged values, while natural gas consumption remains statistically insignificant. The study concludes that electricity supply is crucial to enhance Nigeria’s economic performance, whereas inefficiencies in gas utilization limit its growth impact. Policy recommendations emphasize the need for improved electricity infrastructure, enhanced energy efficiency, and better integration of gas resources into the Nigerian economy.

ARDL, Energy Consumption, Economic Growth, Electricity, Natural Gas, Nigeria

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