EXPLORING THE EFFECT OF PREPAID ELECTRICITY SERVICES ON ECONOMIC GROWTH IN NIGERIA

Abstract

The use of lights measured from space to proxy for economic activity drives home the importance of electricity for economic growth and development. Access to safe, cheap and convenient electricity services is important to socio-economic growth and development. The study examined the effects of prepaid electricity services on economic growth in Nigeria Quarterly time series data ranging from 2007Q1 to 2023Q4, obtained from the Central Bank of Nigeria (CBN) and National Bureau of Statistic (NBS) statistical bulletin. The variables in the model include gross domestic product (GDP) as the dependent variable while electricity generation (EG), electricity consumption per household (ECH) and consumer price index of electricity (CPIE) were captured in the model as the explanatory variables. The study employed autoregressive distributed lag (ARDL) model to analyze the time series data. It was found that electricity generation, electricity consumption per household and consumer price index of electricity has a long run impact on gross domestic product. Finding from the study revealed that electricity generation (EG), prepaid electricity generated income (PGI), electricity consumption per household (ECPH) and consumer price index to electricity (CPIE) were statistically significant. In view of the findings, the study recommends that power holding company of Nigeria should install more prepaid meters under prepaid billing system. This will help to control appropriation of electricity in a better way than traditional metering; also, government should encourage investment in generation capacity expansion by engaging into power generation mix through the harnessing of other renewable energy resource such as solar and wind power which is currently not fully exploited.