Impact of Energy Consumption component and Industrial Output Dynamics in Nigeria

Abstract

Energy consumption plays a crucial role in determining the performance
of the real sector. This research examines how different components of
energy consumption affect industrial productivity in Nigeria from 1981
to 2023. The components analyzed include electricity, gas, and petrol
consumption, which serve as the explanatory variables in the model. Time
series data for these variables were collected for the analysis. The study
utilized advanced econometric methods, including unit root tests,
cointegration analysis, and error correction mechanisms to estimate the
model. Some diagnostics were conducted to test for normality, stability
and serial correlation of the model. The results indicated that each
component of energy consumption positively influences industrial output
to varying extents. Based on these findings, the study recommends
increasing energy supply to ensure sustainable performance in the
industrial sector.