The Nexus between Electricity Consumption and Industrial Sector Performance in Nigeria

Abstract

The study empirically investigates the nexus between electricity consumption and industrial sector performance in Nigeria between 2006 and 2010. Secondary time-series data were analyzed using co-integration and ordinary least square techniques. Co-integration results revealed a long run relationship among the variables, the result also showed that there is a significant and positive relationship between electricity consumption and industrial sector performance in Nigeria during the period. The study therefore recommends amongst other things that federal government in the spirit of economic liberalization, should fully deregulate the power sector of the economy and should encourage the financial sector to grant soft loans and key strategic credit access to the private sector that are involved in the generation, transmission and distribution of electricity to help them improve on their performance and hence spur the much expected turnaround needed in industrial sector in Nigeria.