The Impact of Electricity Supply on Economic Growth, 1980-2010: An Error Correction Method

Abstract

The paper titled the impact of electricity Supply on economic growth in Nigeria examines the relationship between per capita income (a proxy for economic growth) and electricity consumption in Nigeria. The study employs an error correction model and results show that there was no long run relationship between per capita income and the explanatory variables. And in the short run while electricity consumption, government expenditure and investment exert positive impact on per capita income, the relationship between the later and export is negative. Finally the ECM observed the usual negative slope with very high speed of adjustment. The study recommended among other things that corruption prevalent in the power sector must be checked.

Keywords: Electricity Consumption, Government Expenditure, Per capita income, Co-integration and Error Correction Model