Dynamics of Residential Electricity Consumption in Nigeria

Abstract

An important issue facing energy planners and policy makers in the energy industry is obtaining a better understanding of the drivers of residential energy consumption over the last decades. In Nigeria, the strong dependence on fossil fuels has been recognized as a security threat and the continuous residential electricity supply problems that have been noticed has been linked to the inability of energy planners to give proper analysis and predictions of the influence of the various socio-economic and physical factors on the residential electricity consumption across the country. Most of the predictions made have been speculative and devoid of empirically basis. Hence, this study was aimed at empirically determining the various factors that affect the residential electricity consumption rate in Nigeria. The study span was from 1985 to 2016 using time series data which were collected through secondary sources. The study covered the six geopolitical zones of the country and the multiple linear regression statistical technique was used to analyze the data. The study showed that residential electricity consumption rate in Nigeria was significantly influenced by the eight out of the nine socio-economic and physical explanatory variables that were considered in the study (p < 0.05; R 2 = 0.92). The eight significant variables were per capita income, degree of urbanization, population density, Number of households per capita, Price of Kerosene, number of households with electricity, Temperature, and employment rate. These factors should be taken in consideration in the formulation of policy measures to that pertains to electricity consumption in Nigeria.