Disaggregated Energy Consumption and Industrial Output in Nigeria

Abstract

Energy is fundamental to all human activities in every economy. Available findings on the relationship between disaggregated energy consumption and industrial output have been mixed and the previous studies failed to consider diesel and electricity which are important components of energy consumption. Hence, the study examined the nexus between disaggregated energy consumption and industrial output in Nigeria. The null hypothesis was that disaggregated energy consumption has no significant relationship with industrial output in Nigeria. The study applied the Fully Modified Ordinary Least Square method on data obtained from the Central Bank of Nigeria and International Energy Association Statistical Bulletin, 1986-2018, to examine the relationship between disaggregated energy consumption and industrial output in Nigeria. The findings showed a positive relationship between industrial output, premium motor spirit, diesel, coal and human capital. By implication therefore, the variables contributed significantly to increase industrial output within the study period. However, an inverse relationship existed between industrial output, consumption of gas, electricity, kerosene, and capital stock due to their inadequate, irregular and epileptic supply in Nigeria. The study concluded that industrial output is strongly influenced by premium motor spirit, diesel, electricity and gas consumption in Nigeria. The study, therefore, recommended that energy policies should be sector-specific, taking into cognizance the components of energy consumption that influence the industrial output in Nigeria.