Energy And Industrialization In Nigeria; Problems And Prospects

Filed in Articles by on July 27, 2022

Energy And Industrialization In Nigeria; Problems And Prospects

Abstract

This study shows the relationship between Energy and Industrialization in Nigeria; problem and prospects, over the period of (1981-2015).

The study made use of data sourced from the central bank of Nigeria (CBN). The ordinary least squares (OLS) was used to examine the relationship between; industrial output, natural gas, coal, electricity.

The explanatory power of the model was given by R2 of 90% approximately and was subjected to t-test and f-test to test the significance of the independent variables.

The research revealed that crude petroleum and natural gas and electricity consumption were statistically significant and have a positive influence on industrial output, also manufacturing oil refinery was not significant but had a positive relationship with industrial; output.

But solid mineral, coal, and mining was not statistically significant and had a negative influence on industrial output.

Introduction

The oil sector has dictated the pace and structure of growth of the Nigerian economy since 1970. According to Chibueze, Jude and Nnaji (2013) in the absence of reliable energy supply, efforts at socio-economic and technological development cannot yield any positive result.

It is essential to the production of all goods and services and hence vital to the industrial development of any nation as such Ugwoke, Dike and Elekwa (2016) asserts reliable and adequate electricity supply produces a multiplier effect

which goes a long way in tackling the problem of poverty, unemployment and prevalent absence of technological and structural changes that are commonly seen in many developing countries like Nigeria.

As mentioned in Adenikinju (2005), the industrial sector of Nigeria is grossly underperforming due to obstacles posed by infrastructural deficit which include inefficient energy supply.

Statistical evidence has shown that the share of the nation’s industrial sector to Gross Domestic Product (GDP) was 51.4 percent in 1981.

The Industrial sector experienced a decrease from 51.4 percent in 1981 to 45.7 percent in1984. As compared with 1981, industrial contribution to GDP was not encouraging between 1984 and 1988.

But from 1989 to 1992, the share of industrial contribution in total GDP experienced an upward growth from 53.1 percent to 58.9 percent respectively.

Reference
Adenikinju, A. (2008). Efficiency of the Energy Sector and its Impact on the Competitiveness of the Nigerian Economy. International Association for Energy Economic, Fourth Quarter,  22-31.
Bernard, O. A. and Adenuga, O. (2016a). The structural effect of energy policy and industrial output in Nigeria. International Journal of Development Research. 6 (4), pp.7617-7624.
Bernard, O. A. and Adenuga, O. (2016b). Is Energy Consumption Relevant to Industrial Output in Nigeria. European Journal of Research in Social Sciences, 4(4), 1-14.
Central Bank of Nigeria (2000) The Changing Structure of the Nigerian Economy and Implications for development. Lagos, Realms Communications Ltd.
Chibueze, E. N., Jude, O. C. and Nnaji, M. (2013). Does Domestic Energy Consumption
Contribute to Exports?  Empirical Evidence from Nigeria. International Journal of Energy Economics and Policy, 3(3), 297-306.

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