Government Expenditure and Electricity in Nigeria: Any Implications for Economic Growth?

Abstract

Study Aim: As an infrastructure, electricity should propel growth given the theoretical view of endogenous economists, the financial commitment of the Nigerian governments, as well as the size of the economy. Against this background, several researches have been provoked towards providing meaningful suggestions that can help nip the problem of electricity in the bud. However, despite barrage of recommendations, the problems of electricity appear to be getting worse.

Methodology: It is on this premise this paper examines the implications of government expenditure and electricity for economic growth using the Granger causality, Johansen co-integration and ECM techniques over the period 1981-2020.

Findings: While economic growth is proxy for real GDP per capita, findings reveal unidirectional causality running from economic growth to each of electricity consumption and electricity supply. Just as electricity consumption Granger-causes electricity supply. A long-run relationship is also affirmed among the variables.

Conclusion: As regard the ECM analysis, it appears that the trio of electricity consumption, electricity supply and government capital expenditure have no implication whatsoever for economic growth over the period considered.