Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010

Ajibola Akinyemi Alao

doi:doi:10.11648/j.ijeee.20160103.12

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Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010

Ajibola Akinyemi Alao

Published in International Journal of Economy, Energy and Environment (Volume 1, Issue 3)

Received: 22 August 2016 Accepted: 20 October 2016 Published: 8 November 2016

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Abstract

This study applies the growth accounting framework of the Cobb-Douglass production function to explain the dynamic interaction between residential and industrial electricity consumption on economic growth in Nigeria from 1980-2010. The study employed the both Augumented Dickey-Fuller and Pillips Perron unit root test, Johansen Co-integration test, Granger causality test and Ordinary Least Square regression technique. The data for residential and industrial electricity consumption for the period of study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin [3] and the data for Gross Domestic Product (GDP) and per capita income were obtained from the World Development Indicators (WDI) [13] while, data for investment was obtained from the CIA World Fact Book [14]. The study revealed that a uni-directional causality exist running from industrial electricity consumption to residential electricity consumption, also there exists a bi-directional causality between residential electricity consumption and per capita income growth in Nigeria for the period of study. Residential electricity consumption (LREC) is Positive and statistically significant, the industrial electricity consumption ratio (IEC) ratio is positive and statistically significant in model 1 but negative and statistically significant in models 2 and 3 while the interaction between LREC and IEC ratio is positive and statistically significant in models 2 and 3. Given the positive value of the interaction variable the study concludes that residential electricity consumption is constrained by industrial electricity consumption in Nigeria and unless this situation improves the positive benefit of electricity consumption might be eroded. And therefore recommended that Efforts should be geared towards improving the supply of electricity in both residential and industrial sector.

Published in	International Journal of Economy, Energy and Environment (Volume 1, Issue 3)
DOI	10.11648/j.ijeee.20160103.12
Page(s)	55-63
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Residential, Industrial, Electricity Consumption, Economic Growth, Nigeria

References

[1]	Adenikinju A. F. (2003) “Electric Infrastructure Failure in Nigeria: A Survey Based Analysis of the Cost and Adjustment Responses” Journal of Energy Policy. (31) 14, 1519-1530.
[2]	Akomolafe A. K. & J. Danladi (2014) “Electricity Consumption and Economic Growth in Nigeria: A Multivariate Investigation” International Journal of Economics, Finance and Management. (3) 4, 177-182.
[3]	Arrow K. J. (1962) “Economic Welfare and the Allocation of Resources for Invention” Princeton University Press. 609 – 626. URL: http://www.nber.org/chapters/c2144.
[4]	CBN (2012) “Annual Statistical Bulletin” Central Bank of Nigeria. Vol. 39.
[5]	George E. O. & J. E. Oseni (2012) “The Relationship between Electricity Power and Unemployment Rate in Nigeria” Australian Journal of Business and Management Research. (2) 2, 10-19.
[6]	Mahedi M. (2012) “Electricity Consumption and Economic Growth in Bangladesh: Cointegration and Causality” Global Journal of Management and Business Research. (12) 11, 46-56.
[7]	Nwachukwu M. U., Ezedinma N. F. & U. Jiburum (2014) “Comparative Analysis Electricity Consumption among Residential, Commercial and Industrial Sectors of the Nigeria’s Economy” Journal of Energy Technologies and Policy. (4) 3, 7-13.
[8]	Ogundipe A. A. (2013) “Electricity Consumption and Economic Growth in Nigeria” Journal of Business Management and Applied Economics. (2) 4, 1-14.
[9]	Okoligwe N. E. & O. A. Ihugba (2014) “Relationship between Electricity Consumption and Economic Growth: Evidence from Nigeria” Academic Journal of Interdisciplinary Studies. MCSER Publishing, Rome Italy. (3) 5, 137-152.
[10]	Olarinde M. O. & J. A. Omojolaibi (2014) “Electricity Consumption, Institutions and Economic Growth in Nigeria: What Does Evidence Say So Far?” Journal of Economics and Sustainable Development. (5) 12, 40-55.
[11]	Omran M. & A. Bolbol (2003) “Foreign Direct Investment, Financial Development and Economic Growth: Evidence from the Arab Countries. 1(3), 231-249.
[12]	Solow R. M. (1956) “A Contribution to the Theory of Economic Growth” The Quarterly Journal of Economics, 70 (1), 65-94.
[13]	WDI (2013) “World Development Indicators” The World Bank.
[14]	World factbook (2012) “CIA World Fact Book” Central Inteligence Agency.

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Ajibola Akinyemi Alao. (2016). Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010. International Journal of Economy, Energy and Environment, 1(3), 55-63. https://doi.org/10.11648/j.ijeee.20160103.12

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Ajibola Akinyemi Alao. Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010. Int. J. Econ. Energy Environ. 2016, 1(3), 55-63. doi: 10.11648/j.ijeee.20160103.12

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Ajibola Akinyemi Alao. Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010. Int J Econ Energy Environ. 2016;1(3):55-63. doi: 10.11648/j.ijeee.20160103.12

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@article{10.11648/j.ijeee.20160103.12,
  author = {Ajibola Akinyemi Alao},
  title = {Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010},
  journal = {International Journal of Economy, Energy and Environment},
  volume = {1},
  number = {3},
  pages = {55-63},
  doi = {10.11648/j.ijeee.20160103.12},
  url = {https://doi.org/10.11648/j.ijeee.20160103.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijeee.20160103.12},
  abstract = {This study applies the growth accounting framework of the Cobb-Douglass production function to explain the dynamic interaction between residential and industrial electricity consumption on economic growth in Nigeria from 1980-2010. The study employed the both Augumented Dickey-Fuller and Pillips Perron unit root test, Johansen Co-integration test, Granger causality test and Ordinary Least Square regression technique. The data for residential and industrial electricity consumption for the period of study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin [3] and the data for Gross Domestic Product (GDP) and per capita income were obtained from the World Development Indicators (WDI) [13] while, data for investment was obtained from the CIA World Fact Book [14]. The study revealed that a uni-directional causality exist running from industrial electricity consumption to residential electricity consumption, also there exists a bi-directional causality between residential electricity consumption and per capita income growth in Nigeria for the period of study. Residential electricity consumption (LREC) is Positive and statistically significant, the industrial electricity consumption ratio (IEC) ratio is positive and statistically significant in model 1 but negative and statistically significant in models 2 and 3 while the interaction between LREC and IEC ratio is positive and statistically significant in models 2 and 3. Given the positive value of the interaction variable the study concludes that residential electricity consumption is constrained by industrial electricity consumption in Nigeria and unless this situation improves the positive benefit of electricity consumption might be eroded. And therefore recommended that Efforts should be geared towards improving the supply of electricity in both residential and industrial sector.},
 year = {2016}
}

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TY  - JOUR
T1  - Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010
AU  - Ajibola Akinyemi Alao
Y1  - 2016/11/08
PY  - 2016
N1  - https://doi.org/10.11648/j.ijeee.20160103.12
DO  - 10.11648/j.ijeee.20160103.12
T2  - International Journal of Economy, Energy and Environment
JF  - International Journal of Economy, Energy and Environment
JO  - International Journal of Economy, Energy and Environment
SP  - 55
EP  - 63
PB  - Science Publishing Group
SN  - 2575-5021
UR  - https://doi.org/10.11648/j.ijeee.20160103.12
AB  - This study applies the growth accounting framework of the Cobb-Douglass production function to explain the dynamic interaction between residential and industrial electricity consumption on economic growth in Nigeria from 1980-2010. The study employed the both Augumented Dickey-Fuller and Pillips Perron unit root test, Johansen Co-integration test, Granger causality test and Ordinary Least Square regression technique. The data for residential and industrial electricity consumption for the period of study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin [3] and the data for Gross Domestic Product (GDP) and per capita income were obtained from the World Development Indicators (WDI) [13] while, data for investment was obtained from the CIA World Fact Book [14]. The study revealed that a uni-directional causality exist running from industrial electricity consumption to residential electricity consumption, also there exists a bi-directional causality between residential electricity consumption and per capita income growth in Nigeria for the period of study. Residential electricity consumption (LREC) is Positive and statistically significant, the industrial electricity consumption ratio (IEC) ratio is positive and statistically significant in model 1 but negative and statistically significant in models 2 and 3 while the interaction between LREC and IEC ratio is positive and statistically significant in models 2 and 3. Given the positive value of the interaction variable the study concludes that residential electricity consumption is constrained by industrial electricity consumption in Nigeria and unless this situation improves the positive benefit of electricity consumption might be eroded. And therefore recommended that Efforts should be geared towards improving the supply of electricity in both residential and industrial sector.
VL  - 1
IS  - 3
ER  -

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Author Information

Ajibola Akinyemi Alao

Department of Economics, Accounting and Finance, Bells University of Technology, Ota, Nigeria

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APA Style

Ajibola Akinyemi Alao. (2016). Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010. International Journal of Economy, Energy and Environment, 1(3), 55-63. https://doi.org/10.11648/j.ijeee.20160103.12

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ACS Style

Ajibola Akinyemi Alao. Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010. Int. J. Econ. Energy Environ. 2016, 1(3), 55-63. doi: 10.11648/j.ijeee.20160103.12

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AMA Style

Ajibola Akinyemi Alao. Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010. Int J Econ Energy Environ. 2016;1(3):55-63. doi: 10.11648/j.ijeee.20160103.12

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@article{10.11648/j.ijeee.20160103.12,
  author = {Ajibola Akinyemi Alao},
  title = {Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010},
  journal = {International Journal of Economy, Energy and Environment},
  volume = {1},
  number = {3},
  pages = {55-63},
  doi = {10.11648/j.ijeee.20160103.12},
  url = {https://doi.org/10.11648/j.ijeee.20160103.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijeee.20160103.12},
  abstract = {This study applies the growth accounting framework of the Cobb-Douglass production function to explain the dynamic interaction between residential and industrial electricity consumption on economic growth in Nigeria from 1980-2010. The study employed the both Augumented Dickey-Fuller and Pillips Perron unit root test, Johansen Co-integration test, Granger causality test and Ordinary Least Square regression technique. The data for residential and industrial electricity consumption for the period of study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin [3] and the data for Gross Domestic Product (GDP) and per capita income were obtained from the World Development Indicators (WDI) [13] while, data for investment was obtained from the CIA World Fact Book [14]. The study revealed that a uni-directional causality exist running from industrial electricity consumption to residential electricity consumption, also there exists a bi-directional causality between residential electricity consumption and per capita income growth in Nigeria for the period of study. Residential electricity consumption (LREC) is Positive and statistically significant, the industrial electricity consumption ratio (IEC) ratio is positive and statistically significant in model 1 but negative and statistically significant in models 2 and 3 while the interaction between LREC and IEC ratio is positive and statistically significant in models 2 and 3. Given the positive value of the interaction variable the study concludes that residential electricity consumption is constrained by industrial electricity consumption in Nigeria and unless this situation improves the positive benefit of electricity consumption might be eroded. And therefore recommended that Efforts should be geared towards improving the supply of electricity in both residential and industrial sector.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Residential and Industrial Electricity Consumption Dynamics and Economic Growth in Nigeria 1980 - 2010
AU  - Ajibola Akinyemi Alao
Y1  - 2016/11/08
PY  - 2016
N1  - https://doi.org/10.11648/j.ijeee.20160103.12
DO  - 10.11648/j.ijeee.20160103.12
T2  - International Journal of Economy, Energy and Environment
JF  - International Journal of Economy, Energy and Environment
JO  - International Journal of Economy, Energy and Environment
SP  - 55
EP  - 63
PB  - Science Publishing Group
SN  - 2575-5021
UR  - https://doi.org/10.11648/j.ijeee.20160103.12
AB  - This study applies the growth accounting framework of the Cobb-Douglass production function to explain the dynamic interaction between residential and industrial electricity consumption on economic growth in Nigeria from 1980-2010. The study employed the both Augumented Dickey-Fuller and Pillips Perron unit root test, Johansen Co-integration test, Granger causality test and Ordinary Least Square regression technique. The data for residential and industrial electricity consumption for the period of study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin [3] and the data for Gross Domestic Product (GDP) and per capita income were obtained from the World Development Indicators (WDI) [13] while, data for investment was obtained from the CIA World Fact Book [14]. The study revealed that a uni-directional causality exist running from industrial electricity consumption to residential electricity consumption, also there exists a bi-directional causality between residential electricity consumption and per capita income growth in Nigeria for the period of study. Residential electricity consumption (LREC) is Positive and statistically significant, the industrial electricity consumption ratio (IEC) ratio is positive and statistically significant in model 1 but negative and statistically significant in models 2 and 3 while the interaction between LREC and IEC ratio is positive and statistically significant in models 2 and 3. Given the positive value of the interaction variable the study concludes that residential electricity consumption is constrained by industrial electricity consumption in Nigeria and unless this situation improves the positive benefit of electricity consumption might be eroded. And therefore recommended that Efforts should be geared towards improving the supply of electricity in both residential and industrial sector.
VL  - 1
IS  - 3
ER  -

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