Energy generation and economic growth: empirical evidence from Nigeria

Abstract

We examined the impact of energy generation on economic growth in Nigeria by explicitly focusing on the two significant sources of energy generation. The study covered the period 1980–2017, and we made use of the error correction model as a technique of estimation. Our results indicated the existence of cointegration among the variables. We found that gas energy, physical capital and interest rates are crucial to the development of economic growth in the long run. However, in the short run, hydropower contributed to the development of the economy. The two sources of energy generation need massive investment and upgrading as the current generation is not sufficient for economic expansion in Nigeria. The efficiency of the gas fire plants is hampered by insufficient gas supply, while hydropower is suffering from the lack of modern technology and outdated facilities.