EFFECT OF INSTITUTIONAL QUALITY ON NIGERIA’S ENERGY SECTOR DEVELOPMENT

Abstract

This study investigates the effect of institutional quality in driving energy development in Nigeria from 1992 to 2022, examining its interaction with key economic and environmental factors such as CO₂ emissions per capita, energy imports, electricity access, GDP per capita, inflation, and renewable energy. Employing a Vector Error Correction Model (VECM), the study explores both short- and long-term dynamics, highlighting institutional quality’s critical influence on energy sector outcomes. The findings reveal that strong institutional frameworks enhance energy development by supporting infrastructure growth and policy implementation, which are vital for sustainable progress. However, the limited impact of renewable energy underscores the need for increased investment and policy incentives to accelerate its adoption. Based on these findings, the study recommends strengthening institutional frameworks, enhancing governance structures, and implementing targeted policies to promote effective energy development and sustainability in Nigeria.