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Can electricity consumption be useful in predicting Nigerian economic growth? Evidence from error correction model
Author(s) -
Adedokun Adebayo
Publication year - 2015
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/opec.12042
Subject(s) - electricity , consumption (sociology) , economics , realisation , causality (physics) , error correction model , deregulation , macroeconomics , econometrics , cointegration , economy , engineering , sociology , social science , physics , quantum mechanics , electrical engineering
This paper investigates G ranger causality between electricity consumption and N igerian real GDP , using V ector E rror C orrection ( VEC ) G ranger C ausality/ B lock E xogeneity W ald T est. The empirical result supports long run bidirectional relationship, which means that electricity consumption predicts economic growth and vice versa in the country, though causality from electricity consumption to economic growth is stronger. This finding is evidence in support of the country's electricity deregulation and reform programme, which is a core component of various projects towards the realisation of T ransformation A genda ( TA ) and V ision 20: 2020, in which N igeria aims to become one of the 20 largest economies by the year 2020.