The Effect of Electricity Supply on Industrial Production Within The Nigerian Economy (1970 – 2010)

Abstract

There are apparently links between a sustained economic growth and electricity in an economy. In this study, we employ a multiple regression model to examine the effect of electricity supply on economic development and likewise the effect of electricity supply on industrial development. The result of the regression shows that, the electricity (ELEC), Gross fixed capital formation (GFCF), industrial production (INDU) variables and population have the positive sign. That is, they are positively related to RGDP Per capita. Turning to the Industrial production expenditure model, the electricity generation expenditure, gross fixed capital formation and population variables are positively related to GDP Percapita. As a way of facilitating the economic development, it is recommended that issues relating to electricity production and industrial development should be given priorities particularly in the budget scheme and because of this, substantial amount should be allocated to the electricity sector to be able to fix the state of electricity permanently in a good shape.

Keywords: Electricity supply, Industrial production, Economic Growth..