ELECTRICITY GENERATION AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study examines the effect of electricity generation on economic growth in Nigeria. Access to affordable, reliable and quality electricity power is essential for the inclusive growth of national economy. The Nigeria power industry performance record and statistic are depressing. The power supply is characterized by low accessibility, epileptic and poor transmission system. The social economic activities have been impacted negatively by deficit power supply, in spite of energy potential available. The relevance of electricity in various spheres of the economy is a strong justification for the current study. Time series data is employed and the methodology is based on the Autoregressive distributed lag method of estimation. This shows the short run relationship between the variables at the 1% and 5%, while the causality test shows a little causal relationship; the long run bound test indicates a long relationship between the variables. More-so the cusum test shows the level of reliability in the model. The research work shows that no amount of investment by the government alone can solve the electricity crises. Over reliance of on-grid investment via gas with little investment in off-grid to create enabling competitive environment will not take Nigeria out of the crisis. More licensing needs to be given for off-grid investment as against just few megawatts. Also some policy such as connecting to the national grid with certain MW needs to be adjusted.