ECONOMIC GROWTH AND ELECTRICITY GENERATION IN NIGERIA

Abstract

Energy supply is the major source of growth for any economy in the world today. Human economies are therefore motivated to refining and harnessing energetic resources in order to have a stable electricity generation in Nigeria. The study therefore examined the impact of the relevant factors that could affect electricity generation in Nigeria within the period 1970-2018. In order to capture the objective of this work, the study used auto regressive distributed lag model (ARDL) approach. The ARDL is employed in the study in order to capture the long-run and short-run changes in the variables used. The study found significant and direct relationship between price of electricity, economic growth, installed capacity and electricity generation in Nigeria.  Also found in the results is the inverse relationship between annual rainfall, gas consumption and electricity

generation in the long-run. The result also showed a good forecasting performance of the model. The study therefore recommended the use of installed capacity, price of electricity, electricity consumed, and economic growth as these could enable increase in electricity generation in Nigeria. In addition to these, hydroelectricity power station should be located where there is sufficient rainfall to enable the hydroelectricity function to its full capacity.