Energy poverty and economic development in Nigeria: empirical analysis

Abstract

In consideration of Nigeria’s low access to electricity which has consistently been below 60% for nearly three decades, the study examines the development effect of energy poverty in the country. The S-estimation method of the robust least squares estimator was employed for analysis of annual time series data spanning the period from 1990 to 2017. The study finds that energy poverty adversely affects the nation’s economic development, implying that improved access to electricity is development-enhancing. Domestic investment and labour force are also found to be crucial development factors in the country. However, FDI inflows, trade openness and currency depreciation are found to have adversely affected the development of the nation’s economy, highlighting the (low) extent of preparedness of the country for the vagaries of globalization. In view of the empirical evidence, to enhance the development of the nation’s economy (and the standard of living therein), the study recommends expansion of rural and urban electrification; reduction of electricity tariffs; design and implementations of policies and programmes to encourage domestic investment; labour force development; import controls and export promotion; prevention of excessive depreciation of the domestic currency; and implementation of appropriate FDI policies to mitigate its adverse effects on development