The Effects of Electricity Consumption on Industrial Growth in Nigeria

Abstract

The study analyzed the relationship between electricity consumption and industrial growth in Nigeria. The study make up time series data covering the period between 1980 and 2012 and the data collected were analyzed using co-integration and error correction techniques to estimate the short-run and long-run dynamics of the research models respectively. The result established that in the long-run, there is a significant positive relationship between industrial growth and electricity consumption, electricity generation, labour employment and foreign exchange rate while it showed a negative relationship between industrial growth and capital input (proxied by gross capital formation). The study therefore recommends that government should undertake cogent approach towards reforming the electricity supply in such a way to increase industrial production and to monitor the privatization policy of the electricity sub-sector to provide employment to reduce high rate of unemployment in Nigeria.

Keywords – Industrial growth, economic development, energy, electricity consumption, productions