Energy Sector is critical to Nigeria Growth and Development: Perspective to Electricity Sub-sector in Nigeria

This study explored empirically the ‘Energy Sector is critical Sector to Nigeria Economic growth and Development: Perspective to Electricity Subsector, the study covers the period of 1981 to 2011. The study is borne out of the curiosity to determine the importance of electricity to the socio-economic development in Nigeria having relegated its role as “electricity is just an intermediate input”. The quantitative technique is used in analyzing times series data on per capita GDP of Nigeria, Gross Capital formation as proxy of Capital, Post Secondary School Enrolment as proxy of Labour and Electricity consumption. Restricted Error Correction model (VAR) is used with the aid of Econometrics View Package (E- view). The study reveals that the long run relationship that exists between real gross domestic product (PCGDP) a proxy of economic growth/development and electricity consumption is not significant, while, there is existence of short run causality between electricity consumption and economic growth. Further investigation using Granger causality analysis reveals that the two variables granger causes one another. Attempt was made to analyse the Electricity Transmission Mechanism with respect to different subsectors of the economy as it is translated to economic development in the long run, if the sector is properly harnessed. This then bring the study to the conclusion that electricity is not just an intermediate input or resources of satisfying domestic needs alone but it is ‘a critical sector to economic development most especially to developing country like Nigeria’. Therefore necessary recommendations were made as a way forward to achieve the impressive, sustainable growth and inclusive development.