Electricity Consumption and Economic Growth in Nigeria: A Sectoral Analysis

Abstract

This paper examines the causality between electricity consumption and economic growth in Nigeria, with a focus on sectorial analysis. The sectors considered are manufacturing sector, agriculture sector, and the service sector. The study covers the periods from 1981 to 2014. The study was done in a vector error correction model (VECM). The results show that the causality run from  manufacturing sector to electricity consumption in long run, but a bidirectional causality in the short run, from electricity consumption to service sector output  in the long run, and  from electricity consumption to service sector output in long run. There is no short run causality between electricity consumption and service sector and agricultural sectors outputs. The paper concludes with the recommendation that government should be careful in implementing electricity conservation policy