Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Electricity Consumption, Human Development and Economic Growth Nexus in Nigeria: Evidence From the ARDL Approach

Omogbiya, Blessing and Olele, Hilda Enoh

Abstract

Electricity remains a critical driver of socioeconomic transformation, yet Nigeria continues to experience persistent electricity shortages despite abundant energy resources. This study examines the nexus between electricity consumption, human development and economic growth in Nigeria. Specifically, the study investigates the effects of Electricity Consumption Per Capita , Gross Fixed Capital Formation , Human Development Index , Total Primary Electricity Consumption , and Government Capital Expenditure on Real Gross Domestic Product . Annual time-series data were analyzed using the Autoregressive Distributed Lag approach. The Augmented Dickey-Fuller and Phillips-Perron (PP) tests were employed to examine the stationarity properties of the variables, while the ARDL Bounds testing technique was applied to establish long-run relationships. The Error Correction Model , diagnostic tests and Granger causality analysis were also conducted. The findings revealed that Electricity Consumption Per Capita and Total Primary Electricity Consumption have negative and statistically insignificant relationships with economic growth in Nigeria. Human Development Index has a positive but insignificant relationship with economic growth, while Gross Fixed Capital Formation contributes positively but with limited immediate impact. The Error Correction Model confirms a stable long-run relationship among the variables, with an adjustment speed of 32.89 percent annually. The study concludes that electricity availability alone is insufficient to stimulate economic transformation without efficient infrastructure, institutional reforms and effective energy management. The study recommends increased investment in renewable energy, improvement of transmissioned and distribution networks, and stronger public- private sector collaboration to achieve sustainable economic growth and human development.

References

Adeshina, M. A., Ogunleye, A. M., Suleiman, H. O., Yakub, A. O., Same, N. N., Suleiman, Z. A., & Huh, J.-S. (2024). From potential to power: Advancing Nigeria’s energy sector through renewable integration and policy reform. Sustainability, 16(20), 8803. https://doi.org/10.3390/su16208803 Adewuyi, O. B., Kiptoo, M. K., Afolayan, A. F., Amara, T., Alawode, O. I., & Senjyu, T. (2020). Challenges and prospects of Nigeria’s sustainable energy transition with lessons from other countries’ experiences. Energy Reports, 6, 993– 1009. https://doi.org/10.1016/j.egyr.2020.04.022 Adoghe, A. U., Adeyemi-Kayode, T. M., Oguntosin, V., & Amahia, I. I. (2023). Performance evaluation of the prospects and challenges of effective power generation and distribution in Nigeria. Heliyon, 9(3), e14416. https://doi.org/10.1016/j.heliyon.2023.e14416 Adoghe, A. U., Akinwale, A. A., Ojo, O. O., & Agbaje, M. B. (2023). Electric power sector reforms and electricity supply in Nigeria: Challenges and prospects. Energy, Sustainability and Society, 13, Article 29. Agbo, E. P., Edet, C. O., Magu, T. O., Njok, A. O., Ekpo, C. M., & Louis, H. (2021). Solar energy: A panacea for the electricity generation crisis in Nigeria. Heliyon, 7(5), e07016. https://doi.org/10.1016/j.heliyon.2021.e07016 Ahmed, M. F., Rahman, M. A., Paramasivam, P., Yusuf, M., & Hasnain, S. M. M. (2026). Sustainability and cost comparison of 33 kV overhead transmission lines and underground cables: A life cycle perspective. Scientific Reports, 16(1), 18446. https://doi.org/10.1038/s41598-026-48702-0 Akinleye, D. D., McNutt, L.-A., Lazariu, V., & McLaughlin, C. C. (2019). Correlation between hospital finances and quality and safety of patient care. PLOS ONE, 14(8), e0219124. https://doi.org/10.1371/journal.pone.0219124 Akpoghelie, E. O., Akpoghelie, E. O., & Ijokoh, S. U. (2025). Renewable energy efficiency and human development nexus: A panacea to sustainable economic transformation in selected African countries. International Journal of Applied Research, 11(12), 302– 312. https://doi.org/10.22271/allresearch.2025.v11.i12d.13257 Akpoghelie, E. O., Metu, A. G., Chukwuka, S. M., Chiadika, E. O., & Keremah, S. C. (2025). Energy consumption, human development, and industrial sector performance in Nigeria. In Energy Efficiency in Critical Times (pp. 93–106). Elsevier. Amakom, C. M., Ogungbenro, O. A., Iheonu, N. O., Nkwoada, A., Iwueke, D. C., Anya, J., & Okoye, J. (2022). Annual carbon footprint from local electricity generation in Federal University of Technology, Owerri, Imo State, Nigeria. Environmental Health Insights, 16. https://doi.org/10.1177/11786302221136732 Ang, T.-Z., Salem, M., Kamarol, M., Das, H. S., Nazari, M. A., & Prabaharan, N. (2022). A comprehensive study of renewable energy sources: Classifications, challenges and suggestions. Energy Strategy Reviews, 43, 100939. https://doi.org/10.1016/j.esr.2022.100939 Asaleye, A. J., Garidzirai, R., & Ncanywa, T. (2025). Electricity availability and access for economic opportunities: A disaggregated analysis of gender gaps and implications for pro- poor growth. Energy Strategy Reviews, 59, 101723. https://doi.org/10.1016/j.esr.2025.101723 P-ISSN 2695-186X Ayamolowo, O. J., Buraimoh, E., Salau, A. O., & Dada, J. O. (2019). Nigeria electricity power supply system: The past, present and the future. 2019 IEEE PES/IAS PowerAfrica, 64– 69. https://doi.org/10.1109/PowerAfrica.2019.8928767 Balan, A. (2024). The relationship between renewable energy consumption and human development. Economy and Sociology, 1, 1–12. https://doi.org/10.36004/nier.es.2024.1-05 Balogun, M. A. (2022). Informal economy sector as a catalyst for Nigerian economy development and sustainability: A review. Mediterranean Journal of Social Sciences. Baumol, W. J. (1986). Productivity growth, convergence, and welfare: What the long-run data show. American Economic Review, 76(5), 1072–1085. Central Bank of Nigeria. (2024). Statistical bulletin. Abuja: Central Bank of Nigeria. Colak, G., Habimana, T., & Korkeamäki, T. (2025). The effects of government debt on corporate borrowing in developing economies: evidence from Africa. Journal of International Business Studies, 56(7), 874–900. https://doi.org/10.1057/s41267-025-00791-1 Dimitroulopoulou, S., Dudzińska, M. R., Gunnarsen, L., Hägerhed, L., Maula, H., Singh, R., Toyinbo, O., & Haverinen-Shaughnessy, U. (2023). Indoor air quality guidelines from across the world: An appraisal considering energy saving, health, productivity, and comfort. Environment International, 178, 108127. https://doi.org/10.1016/j.envint.2023.108127 Efayena, O. O., Olele, H. E. & Buzugbe, O. P. (2022). Energy consumption and economic growth nexus in Africa: New insights from emerging economies Theoretical and Applied Economics Volume XXIX, No. 4(633), Winter, pp. 185-196 Efayena, O. O., Olele, H. E. & Buzugbe, O. P. (2023). Energy consumption and economic Rethinking the Growth-Energy Consumption Nexus: What Evidence Exists in Sub- Saharan Africa? Journal of Economics and Management 19, 027-045 Eltaiba, N., Hosseini, S., & Okoye, K. (2025). Benefits and impact of technology-enhanced learning applications in higher education in Middle East and North Africa: A systematic review. Global Transitions, 7, 350–374. https://doi.org/10.1016/j.glt.2025.06.004 Energy Commission of Nigeria. (2019). Nigeria Energy Report 2019. Abuja: Energy Commission of Nigeria. Federal Government of Nigeria. (2022). Nigeria Energy Transition Plan. Abuja: Federal Government of Nigeria. Granger, C. W. J. (1998). Extracting information from time series data. The Korean Economic Review, 14(1), 3–10. Iacovoiu, V. B., & Stancu, A. (2021). Does foreign direct investment inflows enhance labour productivity? an empirical analysis. The USV Annals of Economics and Public Administration, 21(1(33)), 13–20. https://doi.org/10.4316/aepa.2021.21.1(33).13-20 International Energy Agency. (2023). Nigeria energy outlook. Paris: International Energy Agency. International Renewable Energy Agency. (2023). Renewable energy market analysis: Africa and its regions. Abu Dhabi: IRENA. Iwugo I. J, Patricia O. A, Aminu U. Y, & Taiya H. M. (2025). Fiscal policies and economic growth in Nigeria. International Journal of Business Economics and Management Science. https://doi.org/10.70382/hijbems.v06i7.020 Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3–42. https://doi.org/10.1016/0304-3932(88)90168-7 P-ISSN 2695-186X Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2), 407– 437. https://doi.org/10.2307/2118477 National Bureau of Statistics. (2024). Nigeria GDP report. Abuja: National Bureau of Statistics. Nnaji, I. L., Ayanwale, M. A., Ukeje, I. O., Ekwunife, R. A., Igwe, C. M., Okwor, E. O., & Nwuzor, C. I. (2026). Enhancing governance and performance in Nigerian higher education through AI-driven digital transformation: Insights from stakeholder perspectives. Social Sciences & Humanities Open, 13, 102348. https://doi.org/10.1016/j.ssaho.2025.102348 Olaniyan, A., Caux, S., & Maussion, P. (2024). Rural electrification in Nigeria: A review of impacts and effects of frugal energy generation based on some of e-waste components. Heliyon, 10(11), e31300. https://doi.org/10.1016/j.heliyon.2024.e31300 Olele, H. E. (2023). Economic Growth-Energy Consumption Nexus in Sub-Sahara Africa: Does Institutions and Fragility Matter? Innovations, 73, 1682 - 1690 Ozturk, I., & Acaravci, A. (2011). Electricity consumption and economic growth nexus: Evidence from panel data for developing countries. Energy Economics, 33(2), 306–314. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289– 326. https://doi.org/10.1002/jae.616 Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), S71–S102. Sachs, J. D., & Warner, A. M. (2001). The curse of natural resources. European Economic Review, 45(4–6), 827–838. https://doi.org/10.1016/S0014-2921(01)00125-8 Shao, Y., Yang, Z., Yan, Y., Yan, Y., Israilova, F., Khan, N., & Chang, L. (2025). Navigating Nigeria’s path to sustainable energy: Challenges, opportunities, and global insight. Energy Strategy Reviews, 59, 101707. https://doi.org/10.1016/j.esr.2025.101707 Ubani, O., Sam-Amobi, C., Mba, E., Idu, E., Ezeama, E., & Oforji, P. I. (2024). Household electricity consumption determinants in major Nigeria cities. Journal of Infrastructure Policy and Development, 8(3), 2895. https://doi.org/10.24294/jipd.v8i3.2895 Ukaeje, O. (2022). Institutional corruption as the bane of critical infrastructure protection in Nigeria. Security and Defence Quarterly. https://doi.org/10.35467/sdq/147652 United Nations Development Programme. (2025). Human Development Report 2025: A matter of choice: People and possibilities in the age of AI. New York: United Nations Development Programme. Varahrami, V., & Sarfaraz, M. (2017). The effects of foreign trade, energy consumption and human capital on GDP in several candidate developed countries and developing countries. Iranian Economic Review, 21(3), 543–566. World Bank. (2025). World Development Indicators. Washington, DC: World Bank.

More Articles from IIARD INTERNATIONAL JOURNAL OF ECONOMICS AND BUSINESS MANAGEMENT