ELECTRICITY CONSUMPTION AND INDUSTRIAL OUTPUT IN NIGERIA

MOSES OYEYEMI AGBEDE, FAVOUR ONUOHA

Abstract


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 significant at 10%. However, the causality test indicates the existence of unidirectional causality running from. Therefore, the study recommends vigorous government policies to improve electricity generation yearly in Nigeria, cogent approach should be geared toward reforming the power sector to meet industrial electricity consumption demand and credit allocated to the industrial sector should be improved upon for industrial development in Nigeria.

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