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ELECTRICITY SUPPLY AND INDUSTRIAL GROWTH: THE NIGERIAN CASE STUDY

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Abstract

This paper investigated the impact and the long-run relationship that existed between electricity supply and industrial growth in Nigeria, using manufacturing output, mining production, energy production, capital, interest rate and consumer price index as control variables for the impact. The study employed least square method and granger method of co-integration after catering for the time series characteristics of the variables with the traditional Augument Dickey Fuller test. The result showed that electricity supply has a positive impact on industrial growth but it is not statistically significant at 5 % level of significance. The co-integration result showed that all the variables are co-integrated, so this shows that the government need to improve the power sector so that there will be improvement in the industrial sector of the country. The study also discovered that there was no long-run relationship between electricity and industrial growth in Nigeria. Finally, the study recommended that for Nigeria to develop economically through industrialization, the country must fix the electricity supply challenges currently faced by industries in Nigeria.