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Journal of Economics and Sustainable Development
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.4, No.14, 2013

www.iiste.org

National Electric Energy Supply and Industrial Productivity in
Nigeria from 1970 to 2010
2.

Akekere Jonah Yousuo1, Purumaziba Odokpon John2
1. Economics dept, Niger Delta University, Bayelsa State
APRD dept Nigeria Social Insurance Trust Fund, Yenagoa Bayelsa State.
*E-mail of the corresponding Author: purumazibajohn@gmail.com

Abstract
This study investigates the impact of electric energy supply on the industrial sector productivity in Nigeria from
1970 to 2010. The specific objectives were; to investigate the extent to which electricity supply impacts on
industrial development in Nigeria and examine the existence of a long run relationship between electricity supply
and industrial productivity in Nigeria. We obtained secondary data from the CBN Statistical Bulletin, using the
multiple regression analysis. The result shows that national energy supply have no significant impact on
industrial productivity in Nigeria, the ADF test results shows that all the variables are stationary at first
difference and that the convergence of industrial output to equilibrium in Nigeria which is below zero (-.9450)
equilibrium line points to the possibility of convergence of industrial output at the nearest future. We therefore
recommend sustained sanitization and funding of the power sector and the encouragement of private partnership
in the power sector, which we believe will enhance the growth of the economy.
Keywords: industrial output, energy consumption and supply, manufacturing output, price level, co-integration
and economic growth.
1. Introduction
Industrialization has been a key determinant that fosters high growth indices in emerging economies of the world
including China, Indonesia and Taiwan (Nazima, 2011). These economies have achieved high growth rates due
to high industrial development, which further caused declining poverty trends and high growth statistics
(knivilla,2005).Development of industrial sectors brings substantial changes in the real sector of the economy
and also leads to rise in the national income of the country which in the long-run brings about creation of
employment. This sector has attracted special attention several decades ago as it has the potential for
improvements in the balance of payment, production of exportable goods and import substitution. Technology is
considered as a prime factor in this regard. Industrial development and technological development are
interdependent and interrelated. While technological development a prerequisite for industrial development, the
industrial sector is the major propelling force for technological development and innovation (Ernst et al,
1994).However in any developing economy like Nigeria, neither can each flourish unless there is adequate
technological infrastructure put in place (SutCliffe, 1971, Hodder 1973, Offiong 2001).
Regular and affordable power supply is a catalyst for socio-political, economic development and its
sustainability in any society. Hardly, can any enterprise or aspect of human development function productively
without electricity or other forms of energy supply. Nigeria is richly endowed with diverse energy sources; crude
oil, natural gas, coal, hydropower, solar energy, fissionable materials for nuclear energy, yet the country
consistently suffers from energy shortages, a major impediment to industrial and technological growth. Such
indicators as blackouts and persistence reliance on self-generating plants, is a painter to low productivity and
underutilization of resources (Udah, 2010). Indeed, as noted by Ekpo (2009), Nigeria is running a generator
economy with its adverse effects on cost of production.
For over two decades Nigeria has experienced structural challenges in the area of electricity generation,
transmission and distribution. The extent of this is underlined by the fact that Nigeria is the largest purchaser of
standby electricity generating plants in the world (Braimoh & Okedeyi 2010). Between 1981 and 1985, during
the Fourth National Development Plan the oil boom increased power demand growth rate by over 10 Percent.
The rapid growth rate makes it difficult for the installed capacity to cope with the requirement of both residential
and industrial consumers. President Obasanjo led government focused on economic reform strategy with a view
to ensuring overhaul of the power sector (Asubiojo, 2007). To this end the regime set up a committee to review
the National Electric Power Policy, which recommendations were not implemented. On August 26, 2010
President Goodluck Jonathan launched the Roadmap for the Power Sector Reform to fast-track the
implementation of the Electric Power Sector Reform (EPSR) Act. The President in his speech identifies the
factors affecting reliable electricity service delivery to include the absence of a sustained and deliberately
deployed long term power development strategy, under-exploitation of the nationā€™s abundant energy
endowments and the absence of adequate implementation of reforms. The low and unstable capacity utilization
shows the large gap between installed and actual operational capacity. This gap indicates the level of technical

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Journal of Economics and Sustainable Development
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.4, No.14, 2013

www.iiste.org

inefficiency in the power sector which weakened the industrialization process, resulting to low productivity and
high operational cost, significantly undermined the efforts of the Nigerian government in sustaining its economic
performance. We all expect and still expecting government to do more on the state of electricity crisis as a
primary factor that enhance industrialization in an economy. Moreso, of all the literature reviewed on energy
supply and industrial productivity in Nigeria, the long-run relationship, existing between electricity supply and
output growth in Nigeria has not been adequately addressed. It is based on this premise that we decided to carry
out this study; to examine the impact of national electric energy supply on industrial productivity and see if there
will be a long run relationship between energy and industrial output in the nearest future.
I.1.1 Objectives
The broad objective of this study is to examine the impact of electric energy supply on industrial productivity in
Nigeria. The specific objectives are as follows:
To investigate the extent to which electricity supply impacts on industrial development in Nigeria
To examine the existence of co-integration between electricity supply and industrial productivity in
Nigeria.
I.1.2 Hypotheses
The hypotheses are stated as follows;
Electric energy supply has not impacted on the industrial productivity in Nigeria
There is no co-integration between electricity supply and industrial productivity in Nigeria.
2. Literature review
There are a range of competing theories to the study of economic development. Each approach has its strength
and weaknesses with different ideological, theoretical and empirical conclusions. This study is anchored on the
endogenous growth model. The motivation for the endogenous growth model stems from the failure of the
neoclassical theories to explain the sources of long-run economic growth. The neoclassical theory does not
explain the intrinsic characteristics of economies that cause them to grow over extended period of time. The
neoclassical theory focuses on the dynamic process through which capital labour ratios approach long-run
equilibrium. In the absence of external technological change, which is not clearly explained in the neoclassical
model, all economies will converge to zero growth. The neoclassical theory see rising GDP as a temporary
phenomenon resulting from technological change or a short-term equilibrating process in which an economy
approaches its long-run equilibrium. The neoclassical theory credits the bulk of economic growth to a
completely independent process of technological progress. Thus in contrast to the neoclassical counterrevolution
theories, models of endogenous growth suggest an active role for public policy in promoting economic
development through direct and indirect investments in human capital formation and the encouragement of
foreign private investment in knowledge-intensive industries such as computer software and telecommunications
(Stern, 1991; Sala-i-Martin, 1990; Romer, 1986; Helpman, 1986; Lucas, 1988; Barro, 1990; Todaro & Smith,
2003).
A lot of empirical literatures exist on electricity and its effect on the economic performance. However this study
narrows its focus on the relationship it has with Industrial development. Abosedra et al (2009) investigated the
direction of causality between electricity consumption and economic growth for Lebanon, using monthly data
covering the period 1995 to 2005. The outcome of the study substantiates the absence of a long-term equilibrium
relationship between electricity consumption and economic growth but existence of a unidirectional causality
without feedback running from electricity consumption to economic growth. They therefore called on the policy
makers to place more emphasis on reconstruction and building of additional capacity and infrastructural
development in the electricity sector which would drive economic growth of the country. Alper and Atilla (2007)
used the wavelet analysis and found that in the short-run, there is feedback relationship between gross national
product and energy consumption. However, in the long-run gross national product led to energy consumption.
Masih and Masih (2007) studied the causality between energy consumption and GDP in Asian countries using
vector error correction model (VECM) and VAR analysis. They used annual data over 1955 to 1999 periods.
They drew the conclusion that there was no causal relationship between energy consumption and GDP in
Malaysia, Singapore and Philippine. They also found that there was bidirectional causality between energy
consumption and GDP in Pakistan, unidirectional causality from energy consumption to GDP in India and
unidirectional causality from GDP to energy consumption in Indonesia. Ciarreta, et al (2010) used panel data
from 1970 to 2007 to analyze the causality relationship between electricity consumption, real GDP and energy
price. They revealed the long-run equilibrium relationship between variables. The causal relationship running
from electricity consumption to GDP was revealed. Also they found a bidirectional relationship between
electricity consumption and growth in the short-run and long-run. Hondroyiannis et al (2002) studied the link
between energy consumption, gross domestic product and the consumer price index (CPI) for Greece. They used
annual data over the period 1960 to 1996 and found evidence of long-run bi-directional causality between energy

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Journal of Economics and Sustainable Development
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.4, No.14, 2013

www.iiste.org

consumption (total and industrial) gross domestic product. On the other hand, there was no causality between
residential use of energy and gross domestic product. Another study by Soytas and Sari (2003) obtained mixed
results for the countries they studied. While they found bi-directional causality in Argentina, there was causality
running from Gross Domestic Product to energy consumption in Italy and Korea and from energy consumption
to gross domestic product in Turkey, France, Germany and Japan. Ghosh (2002) carried out a study for India
using annual data for the period 1950 to 1997.He found no co-integration but argued that there is unidirectional
causality from economic growth to electricity consumption. However, the results contradicted Granger (Granger
1986) postulation that there cannot be causality between non-stationarity variables that are not co-integrated.
Sica (2007) of Italy investigated the possibility of energy demand-led growth and growth-driven energy demand
hypothesis using the error correction model. The result of the study did not reveal any causality linkage. Though,
the standard Granger test found evidence of unidirectional causality running from energy to Gross Domestic
Product. Adenikinju (2005)in his study analyzed the cost of power outages to the business sector of the Nigerian
economy using both a survey technique and revealed preference approach and the result showed that the poor
state of electricity supply in Nigeria has imposed significant costs on the business sector. Lee and Anas
(1992)reported that manufacturing sub-sector in Nigeria spend an average 90% of their variable cost on
infrastructure, with electric power accounting for half of time share. The duo, having studied 179 manufacturing
firms in Nigeria also reported that the impact of electricity deficiency of all types was consistently higher in
small firms. Ukpong (1973) also carried out a study on the cost of power outages to the industrial and
commercial sector in Nigeria. He used the production function approach to evaluate the power outage cost
between 1965 and 1966, with selected firms. From his estimate, he discovered the unsupplied electrical energy to
be 130kwh and 172kwh between the periods. The corresponding costs of the power outage to the industrial
sector in the two years were estimated at 1.8million and 2.75million naira respectively. The unsupplied electrical
energy according to Ukpong has a negative implication on the manufacturing productivity growth in Nigeria. A
similar framework analysis was also carried out by Uchendu (1993) on the industrial firms in the commercial
areas of Logos State Nigeria. The study estimated several types of outage cost such as material and equipment
losses and value of unproduced output which was estimated at 1.3million and 2.32million in 1991, 1992 and mid
1993 respectively. The development reduced the value added of major manufacturing firms in Nigeria during
these periods.
3. Methodology
The secondary data were sourced from the CBN statistical bulletin 2011 from 1970 to 2010. The choice of this
period is basically on the availability of the data for the selected variable of interest. Employed a multiple
regression analysis to critically examine the impact of energy supply on industrial productivity controlling for
manufacturing output, market interest, rate and capital, in line with our stated objectives the Augmented Dickey
Fuller (ADF) test and ECM were also employed; testing the order of stationary of the data and the existence of
convergence to equilibrium in the long run. Below is the detail of the data:

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Journal of Economics and Sustainable Development
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.4, No.14, 2013

www.iiste.org

Years
INDST Y
MAN Y
ENRGY
CAPITAL
CPI
INT
1970
819.1
317.6
20
358.45
0.23
4.5
1971
1012
307.7
25.3
540.35
0.23
4.5
1972
1215.5
381.1
30.7
651.73
0.24
4.5
1973
1416.5
472.7
34.5
749.85
0.28
4.5
1974
4927.4
1182.02
60.37
899.12
0.31
4.5
1975
7463.01
1186.53
85.95
1339.22
0.45
4
1976
9159.86
1463.59
85.2
2064.43
0.5
3.5
1977
9600.54
1695.58
98.66
2872.32
0.66
4
1978
9041.71
2168.99
110.77
4059.86
0.7
5
1979
10863.66
2599.15
137.32
4902.1
0.75
5
1980
10922.91
3485.86
143.72
6234.23
0.88
6
1981
89072.78
13837.92
801.93
8570.05
1.03
6
1982
82206.51
15633.54
887.71
10668.34
1.1
8
1983
71967.76
10797.42
853.63
11668.04
1.53
8
1984
77888.8
9532.75
902.35
12462.93
1.87
10
1985
85097.43
12032.4
1019.22
13070.34
1.89
10
1986
82860.89
11582.62
665.93
15247.45
2.15
10
1987
81596.46
12041.61
696.57
21082.99
2.36
12.75
1988
85146.6
13713.89
702.13
27326.42
3.8
12.75
1989
93971.61
14011.49
759.42
30403.22
5.5
18.5
1990
115591.4
14702.4
827.96
33547.7
5.7
18.5
1991
108081
16078.45
827.96
41352.46
7
14.5
1992
109682.6
15357.18
923.46
58122.95
10.42
17.5
1993
109344.2
14788.13
937.41
127177.7
16.8
26
1994
106747.6
14591.36
1006.79
143424.2
29.7
13.5
1995
108162.7
13836.14
990.68
180004.8
45.03
13.5
1996
114992.2
13953.42
1012.47
238596.6
51.47
13.5
1997
116576.9
14009.95
1006.37
316207.1
56.73
13.5
1998
117870.3
13046.3
940.94
351956.2
63.49
14.31
1999
110558.6
13494.64
953.17
431168.4
63.63
18
2000
121756.6
13958.82
972.24
530373.3
72.87
13.5
2001
128418.6
14935.1
11684.85
764961.5
84.9
14.31
2002
123553.5
16439.36
13318.07
930493.9
95.2
19
2003
149878.7
17369.63
15598.81
1096536
117.9
15.75
2004
156486.8
19436.78
18252.54
1421664
129.7
15
2005
159161.4
21305.05
19439.86
1838390
144.7
13
2006
155165.5
23305.87
20344.44
2290618
157.1
12.25
2007
151699.1
25535.5
21301.04
3680090
167.4
8.75
2008
146519.6
27806.76
22035.93
6941383
192.6
11.85
2009
149486.5
29990.92
22682.77
9147417
216
10.84
2010
157905
32281.31
23364.38
10157021
223
5.43
Source: CBN Statistical Bulletin 2011
3.1.1 Model Specification
The essence of regression is to reveal the causal relationship that exist between variables, in this regard the
functional relationship between industrial productivity and energy supply taking control for market interest rate,
capital and manufacturing output is given as;
INDST = f (ENERGY, CAP, INTEREST, CPI, MANY) ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦.. 1
Where INDST is industrial productivity
ENERGY is energy/electricity supply
CAP is capital generated from the capital market and loan from government
INTEREST is the market lending rate
CPI is price level in the economy and
MANY is manufacturing output
The econometric model for equation 1 is
INDST = Ļ + Ļ€ENERGY +Ī²1CAP + Ī²2INTEREST + Ī²3CPI + Ī²4MANY + Āµ ā€¦ā€¦ā€¦ā€¦. 2

125
Journal of Economics and Sustainable Development
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.4, No.14, 2013

www.iiste.org

Where Ļ is the intercept of the regression which assume the level of productivity at zero supply of energy ceteris
paribus
Ļ€ and Ī²i are parameters of estimates, Ļ€ is the slope of the regression line, other things being equal and
Āµ is the random term which measure the effect of other factors on industrial productivity other than the
ones identified and is independently and identically distributed (iid).
In line with objective two, we therefore state the ECM which measures the co-integration (existence of long run
relationship) between energy supply and industrial productivity in Nigeria.
INDSTt = Ļ + Ļ€ENERGYt +Ī²1CAPt + Ī²2INTERESTt + Ī²3CPI + Ī²4MANYt + ĪøĀµt + Īµ ā€¦ā€¦.. 3
Where Īø is the adjustment coefficient which measure the degree of convergence of the explanatory variable to
equilibrium, Āµt is the long run equilibrium output variable Īµ is the stochastic term, other variables remain as
earlier defined. In analyzing the data we use the STATA 10.0.
3.3 Results and Discussion
We then present the result in tabular format, following econometric approach in respect to the stated objectives:
Model 1 (objective 1): parametric estimate on the impact of energy consumption on industrial output having a
control for interest rate, manufacturing output, capital and price level (CPI)
Industrial output
Coefficients
ā€˜tā€™statistics
P>|t|
Man
6.0410
16.44
.000
Energy
-1.241
-2.49
.017
Capital
-0.0116
-9.19
.000
CPI
449.555
6.08
.000
Interest
1106.314
2.99
.005
Constant
-5553.573
-1.92
.062
R2 = .9825
F (5, 35) = 392.88
R2adjusted = .9800
No. of Obs. = 40
Software used: STATA 10.0
From the above estimated parameters of the model
INDST = -5553.573 + 6.0410Man ā€“ 1.241Energy - .0116Cap + 449.555CPI + 1106.314Interest.
We observed that the manufacturing input/output has a positive impact on industrial output in Nigeria as well as
interest and price level in the economy. Energy consumption has a negative effect on industrial output as well as
capital from the capital market and government. Hereto, at every effort of increasing energy consumption,
industrial output falls by 1.241 at a unit increment, all things being equal. All the observed variables predict
industrial output variability of about 98.25 per cent. Energy consumption is significant at 5 per cent with p-value
of .017 which is less than 0.05, disproving the hypothesis that energy consumption has no impact on industrial
output in Nigeria; hence energy consumption has a significant impact on industrial output in Nigeria. All the
observed variables are statistically significant at 5 per cent level, the coefficient of determination (R2 = .9825)
shows that the estimated regression line is very sound, that is have a good fit. This is also support the F-statistics
(F = 392.88) that the regression line significant, different from zero.
Unit root test at first difference
Variables
ADF Statistics
1%
5%
10%
Lags
Industrial
-4.207
-3.668
-2.966
-2.616
2
Man
-3.048
-3.668
-2.966
-2.616
2
Energy
-3.228
-3.662
-2.964
-2.614
1
Interest
-3.931
-3.668
-2.966
-2.616
2
Capital
-3.061
-3.662
-2.964
-2.614
1
Stationary at ordinary level
CPI
2.272
-3.662
-2.964
-2.614
2
In order to agree with econometric principles of data stationarity (that the data are stationary) and the estimated
regression is not spurious in nature, we then carry out the unit root test (ADF test), which we observed that only
price level (CPI) is stationary at ordinary level i.e. has no unit root, while the rest variables have unit root at their
ordinary level i.e. are not stationary. We then carryout an ADF test again at their first differences, which are
given above and we discovered the data to be stationary at their first difference. This agrees with macroeconomic
data which always assume to be stationary at their first difference. Industrial output, manufacturing output,
capital interest rate, and energy consumption are all stationary at 5% level, wherein their calculated ADF
statistics -(4.207, 3.048, 3.061, 3.931, 3.228) greater than the 5% critical values ā€“(2.966, 2.966, 2.964, 2.966,
2.964) respectively. At this juncture we conclude that the data has no unit root. On this premise we agreed that
our earlier regression is spurious; therefore we have to rerun our regression again at their first difference of
industrial output, manufacturing output, energy consumption, capital interest rate variables and price level.
A parametric estimate of the impact of energy consumption on industrial output taking control of manufacturing

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Journal of Economics and Sustainable Development
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.4, No.14, 2013

www.iiste.org

output, capital, interest rate and price level (CPI)
d.Industrial output
Coefficients
ā€˜tā€™statistics
P>|t|
d.energy
.4184
.45
.658
d.man
5.3417
6.88
.000
d.capital
-.0048
-1.25
.219
d.interest
-157.5287
-.32
.748
CPI
-21.9592
-.56
.582
Const
1723.817
.87
.389
R2 = .5961
R2 adjusted = .5367
F(5, 34) = 10.03
No. of Obs. = 40
Indust = 1723.817 + .4184energy + 5.3417man - .0048capital ā€“ 157.5287interest + 21.9592CPI
From the above estimate we observed that only manufacturing output has a significant impact on industrial
output with p-value of .000 while the rest variables are not including energy consumption in the economy.
Though the overall regression line has a good fit and different from zero, yet coefficient of determination has fall
drastically from .9892 to .5961, showing the predictability of industrial output in the economy to be just 60 per
cent instead of the 98.92 per cent of the earlier prediction by the selected variables. Secondly in this regression
we also observed that the impact of energy consumption has changed from negative to positive after differencing
the variables of interest. Hence with p-value of .658 for energy consumption is an indication that energy
consumption has no significant impact on industrial output in Nigeria ceteris paribus. This automatically agrees
with the null hypothesis that energy consumption has no impact on industrial output in Nigerian economy.
From the above regression wee then predict and test the stationary of the residual
Unit root test for the residual (U) at ordinary level
Variable
ADF Statistics
1%
5%
10%
Lag
Residual(U)
-3.929
-3.662
-2.964
-2.614
2
From the ADF test we observed that the ADF statistics (-3.929) is greater than the 5% critical value (-2.964)
which implies that the residual is stationary and independently and identically distributed in nature, no existence
of unit root. And the stationarity of the residual implies that there exist a long run relationship between energy
consumption and industrial output in Nigeria. We then conclude that the error term has no unit root.
Cointegration test (objective two): testing the existence of a long run relationship between energy consumption
and industrial output taking control of manufacturing output, capital, interest rate and price level.
d.industrial output
Coefficient
ā€˜tā€™statistics
P>|t|
d.man
5.5575
9.34
.000
d.energy
.5196
.73
.473
d.capital
-.0123
-3.73
.001
d.interest
421.8726
1.08
.287
CPI
2562.95
.81
.424
L.U(residual)
-.9450
-5.02
.000
Constant
793.06
.52
.606
R2 = .7709
R2 adjusted = .7292
F(6, 33) = 18.50
No. of Obs. = 40
From the estimate we observed that policy adjustment coefficient lie below the equilibrium by .9450 and all
things being equal, as policy gears toward enhances energy supply increases and consumption follow suit that
industrial output will converges to equilibrium, which will promote productivity and efficiency in Nigeria. The
statistical significant of the adjustment coefficient is an indication that improving energy supply will enhance
industrial productivity in the economy.
Since variable CPI and interest rate significant we then drop them and see if the adjustment coefficient will
change.
d.industrial output
Coefficient
ā€˜tā€™statistics
P>|t|
d.man
5.522
9.42
.000
d.energy
.7015
1.05
.301
d.capital
-.0100
-5.11
.000
L.U (residual)
-.8687
-4.99
.000
Constant
1446.893
1.11
.275
R2 = .7615
R2 = .7342
F(4, 35) = 27.94
Observation = 40
As we remove those two variables we can now see that all the variables are significant except the energy
consumption which calls for policy implication to foster industrial output productivity. The convergence of the
adjustment coefficient has also reduced; hence the convergence of industrials output to equilibrium in line with
energy supply and consumption is a thing of power policy readjustment and change in policy making towards
policy enhancement.
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5. Conclusion
The study reveals that other things being equal energy/electricity supply has no significant impact on industrial
productivity in Nigeria, though at ordinary status it seems to be significant but negative, after differencing the
data to stationary it reveals its true impact of not being significant but having a positive impact. Other variables
control seems to have a significant impact on industrial productivity in the economy. The ADF test reveals that
all the variables are stationary only at first difference except CPI. The regression is none zero type and the
selected variables are good predictors of industrial output variability in Nigeria. We believe that industrial output
will converge to equilibrium in the nearest future if sanity returns to the power sector; hence we propose a full
sanitization of the power sector with evaluation, monitoring and appraisal of the generating transmitting and
distributing units quarterly. Policies should gears toward a private power driving to avoid corruption and
existence of social desperadoes in the said sector, restriction generators importation, and revitalization of
consumption pattern.
Suggested area for future study include economic growth and manufacturing output, critical evaluation of the
Nigerian industrial sector, electric energy implication on economic productivity, and power supply and it
implication on national development of vision 202020 in Nigeria.
Suggested area for future study include economic growth and manufacturing output, critical evaluation of the
Nigerian industrial sector, electric energy implication on economic productivity, and power supply and it
implication on national development of vision 202020 in Nigeria.
6. Acknowledgement
Researchers acknowledge the President of the Federal Republic of Nigeria Dr. Good luck Jonathan and his
Special Adviser on Research and Strategy; Bar. Oronto Douglas, for their unalloyed support in course of our
educational pursuit. Researchers also acknowledge the Departments of Economics of the University of Port
Harcourt, Niger Delta University and University of Nigeria Nsukka for creating the enabling environment for the
research. Researchers finally wholeheartedly appreciate the support and encouragements of their immediate
family members, Dr. Edoumiekumo Samuel, Dr. Ajie H.A Prof. G.S. Angaye Dr. Michael Baghebo Mr.
Nwajinka Charles Chibundu and other colleagues in the department of the prestigious Niger Delta University, in
Bayelsa State of Nigeria.
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National electric energy supply and industrial productivity in nigeria from 1970 to 2010

  • 1. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org National Electric Energy Supply and Industrial Productivity in Nigeria from 1970 to 2010 2. Akekere Jonah Yousuo1, Purumaziba Odokpon John2 1. Economics dept, Niger Delta University, Bayelsa State APRD dept Nigeria Social Insurance Trust Fund, Yenagoa Bayelsa State. *E-mail of the corresponding Author: purumazibajohn@gmail.com Abstract This study investigates the impact of electric energy supply on the industrial sector productivity in Nigeria from 1970 to 2010. The specific objectives were; to investigate the extent to which electricity supply impacts on industrial development in Nigeria and examine the existence of a long run relationship between electricity supply and industrial productivity in Nigeria. We obtained secondary data from the CBN Statistical Bulletin, using the multiple regression analysis. The result shows that national energy supply have no significant impact on industrial productivity in Nigeria, the ADF test results shows that all the variables are stationary at first difference and that the convergence of industrial output to equilibrium in Nigeria which is below zero (-.9450) equilibrium line points to the possibility of convergence of industrial output at the nearest future. We therefore recommend sustained sanitization and funding of the power sector and the encouragement of private partnership in the power sector, which we believe will enhance the growth of the economy. Keywords: industrial output, energy consumption and supply, manufacturing output, price level, co-integration and economic growth. 1. Introduction Industrialization has been a key determinant that fosters high growth indices in emerging economies of the world including China, Indonesia and Taiwan (Nazima, 2011). These economies have achieved high growth rates due to high industrial development, which further caused declining poverty trends and high growth statistics (knivilla,2005).Development of industrial sectors brings substantial changes in the real sector of the economy and also leads to rise in the national income of the country which in the long-run brings about creation of employment. This sector has attracted special attention several decades ago as it has the potential for improvements in the balance of payment, production of exportable goods and import substitution. Technology is considered as a prime factor in this regard. Industrial development and technological development are interdependent and interrelated. While technological development a prerequisite for industrial development, the industrial sector is the major propelling force for technological development and innovation (Ernst et al, 1994).However in any developing economy like Nigeria, neither can each flourish unless there is adequate technological infrastructure put in place (SutCliffe, 1971, Hodder 1973, Offiong 2001). Regular and affordable power supply is a catalyst for socio-political, economic development and its sustainability in any society. Hardly, can any enterprise or aspect of human development function productively without electricity or other forms of energy supply. Nigeria is richly endowed with diverse energy sources; crude oil, natural gas, coal, hydropower, solar energy, fissionable materials for nuclear energy, yet the country consistently suffers from energy shortages, a major impediment to industrial and technological growth. Such indicators as blackouts and persistence reliance on self-generating plants, is a painter to low productivity and underutilization of resources (Udah, 2010). Indeed, as noted by Ekpo (2009), Nigeria is running a generator economy with its adverse effects on cost of production. For over two decades Nigeria has experienced structural challenges in the area of electricity generation, transmission and distribution. The extent of this is underlined by the fact that Nigeria is the largest purchaser of standby electricity generating plants in the world (Braimoh & Okedeyi 2010). Between 1981 and 1985, during the Fourth National Development Plan the oil boom increased power demand growth rate by over 10 Percent. The rapid growth rate makes it difficult for the installed capacity to cope with the requirement of both residential and industrial consumers. President Obasanjo led government focused on economic reform strategy with a view to ensuring overhaul of the power sector (Asubiojo, 2007). To this end the regime set up a committee to review the National Electric Power Policy, which recommendations were not implemented. On August 26, 2010 President Goodluck Jonathan launched the Roadmap for the Power Sector Reform to fast-track the implementation of the Electric Power Sector Reform (EPSR) Act. The President in his speech identifies the factors affecting reliable electricity service delivery to include the absence of a sustained and deliberately deployed long term power development strategy, under-exploitation of the nationā€™s abundant energy endowments and the absence of adequate implementation of reforms. The low and unstable capacity utilization shows the large gap between installed and actual operational capacity. This gap indicates the level of technical 122
  • 2. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org inefficiency in the power sector which weakened the industrialization process, resulting to low productivity and high operational cost, significantly undermined the efforts of the Nigerian government in sustaining its economic performance. We all expect and still expecting government to do more on the state of electricity crisis as a primary factor that enhance industrialization in an economy. Moreso, of all the literature reviewed on energy supply and industrial productivity in Nigeria, the long-run relationship, existing between electricity supply and output growth in Nigeria has not been adequately addressed. It is based on this premise that we decided to carry out this study; to examine the impact of national electric energy supply on industrial productivity and see if there will be a long run relationship between energy and industrial output in the nearest future. I.1.1 Objectives The broad objective of this study is to examine the impact of electric energy supply on industrial productivity in Nigeria. The specific objectives are as follows: To investigate the extent to which electricity supply impacts on industrial development in Nigeria To examine the existence of co-integration between electricity supply and industrial productivity in Nigeria. I.1.2 Hypotheses The hypotheses are stated as follows; Electric energy supply has not impacted on the industrial productivity in Nigeria There is no co-integration between electricity supply and industrial productivity in Nigeria. 2. Literature review There are a range of competing theories to the study of economic development. Each approach has its strength and weaknesses with different ideological, theoretical and empirical conclusions. This study is anchored on the endogenous growth model. The motivation for the endogenous growth model stems from the failure of the neoclassical theories to explain the sources of long-run economic growth. The neoclassical theory does not explain the intrinsic characteristics of economies that cause them to grow over extended period of time. The neoclassical theory focuses on the dynamic process through which capital labour ratios approach long-run equilibrium. In the absence of external technological change, which is not clearly explained in the neoclassical model, all economies will converge to zero growth. The neoclassical theory see rising GDP as a temporary phenomenon resulting from technological change or a short-term equilibrating process in which an economy approaches its long-run equilibrium. The neoclassical theory credits the bulk of economic growth to a completely independent process of technological progress. Thus in contrast to the neoclassical counterrevolution theories, models of endogenous growth suggest an active role for public policy in promoting economic development through direct and indirect investments in human capital formation and the encouragement of foreign private investment in knowledge-intensive industries such as computer software and telecommunications (Stern, 1991; Sala-i-Martin, 1990; Romer, 1986; Helpman, 1986; Lucas, 1988; Barro, 1990; Todaro & Smith, 2003). A lot of empirical literatures exist on electricity and its effect on the economic performance. However this study narrows its focus on the relationship it has with Industrial development. Abosedra et al (2009) investigated the direction of causality between electricity consumption and economic growth for Lebanon, using monthly data covering the period 1995 to 2005. The outcome of the study substantiates the absence of a long-term equilibrium relationship between electricity consumption and economic growth but existence of a unidirectional causality without feedback running from electricity consumption to economic growth. They therefore called on the policy makers to place more emphasis on reconstruction and building of additional capacity and infrastructural development in the electricity sector which would drive economic growth of the country. Alper and Atilla (2007) used the wavelet analysis and found that in the short-run, there is feedback relationship between gross national product and energy consumption. However, in the long-run gross national product led to energy consumption. Masih and Masih (2007) studied the causality between energy consumption and GDP in Asian countries using vector error correction model (VECM) and VAR analysis. They used annual data over 1955 to 1999 periods. They drew the conclusion that there was no causal relationship between energy consumption and GDP in Malaysia, Singapore and Philippine. They also found that there was bidirectional causality between energy consumption and GDP in Pakistan, unidirectional causality from energy consumption to GDP in India and unidirectional causality from GDP to energy consumption in Indonesia. Ciarreta, et al (2010) used panel data from 1970 to 2007 to analyze the causality relationship between electricity consumption, real GDP and energy price. They revealed the long-run equilibrium relationship between variables. The causal relationship running from electricity consumption to GDP was revealed. Also they found a bidirectional relationship between electricity consumption and growth in the short-run and long-run. Hondroyiannis et al (2002) studied the link between energy consumption, gross domestic product and the consumer price index (CPI) for Greece. They used annual data over the period 1960 to 1996 and found evidence of long-run bi-directional causality between energy 123
  • 3. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org consumption (total and industrial) gross domestic product. On the other hand, there was no causality between residential use of energy and gross domestic product. Another study by Soytas and Sari (2003) obtained mixed results for the countries they studied. While they found bi-directional causality in Argentina, there was causality running from Gross Domestic Product to energy consumption in Italy and Korea and from energy consumption to gross domestic product in Turkey, France, Germany and Japan. Ghosh (2002) carried out a study for India using annual data for the period 1950 to 1997.He found no co-integration but argued that there is unidirectional causality from economic growth to electricity consumption. However, the results contradicted Granger (Granger 1986) postulation that there cannot be causality between non-stationarity variables that are not co-integrated. Sica (2007) of Italy investigated the possibility of energy demand-led growth and growth-driven energy demand hypothesis using the error correction model. The result of the study did not reveal any causality linkage. Though, the standard Granger test found evidence of unidirectional causality running from energy to Gross Domestic Product. Adenikinju (2005)in his study analyzed the cost of power outages to the business sector of the Nigerian economy using both a survey technique and revealed preference approach and the result showed that the poor state of electricity supply in Nigeria has imposed significant costs on the business sector. Lee and Anas (1992)reported that manufacturing sub-sector in Nigeria spend an average 90% of their variable cost on infrastructure, with electric power accounting for half of time share. The duo, having studied 179 manufacturing firms in Nigeria also reported that the impact of electricity deficiency of all types was consistently higher in small firms. Ukpong (1973) also carried out a study on the cost of power outages to the industrial and commercial sector in Nigeria. He used the production function approach to evaluate the power outage cost between 1965 and 1966, with selected firms. From his estimate, he discovered the unsupplied electrical energy to be 130kwh and 172kwh between the periods. The corresponding costs of the power outage to the industrial sector in the two years were estimated at 1.8million and 2.75million naira respectively. The unsupplied electrical energy according to Ukpong has a negative implication on the manufacturing productivity growth in Nigeria. A similar framework analysis was also carried out by Uchendu (1993) on the industrial firms in the commercial areas of Logos State Nigeria. The study estimated several types of outage cost such as material and equipment losses and value of unproduced output which was estimated at 1.3million and 2.32million in 1991, 1992 and mid 1993 respectively. The development reduced the value added of major manufacturing firms in Nigeria during these periods. 3. Methodology The secondary data were sourced from the CBN statistical bulletin 2011 from 1970 to 2010. The choice of this period is basically on the availability of the data for the selected variable of interest. Employed a multiple regression analysis to critically examine the impact of energy supply on industrial productivity controlling for manufacturing output, market interest, rate and capital, in line with our stated objectives the Augmented Dickey Fuller (ADF) test and ECM were also employed; testing the order of stationary of the data and the existence of convergence to equilibrium in the long run. Below is the detail of the data: 124
  • 4. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org Years INDST Y MAN Y ENRGY CAPITAL CPI INT 1970 819.1 317.6 20 358.45 0.23 4.5 1971 1012 307.7 25.3 540.35 0.23 4.5 1972 1215.5 381.1 30.7 651.73 0.24 4.5 1973 1416.5 472.7 34.5 749.85 0.28 4.5 1974 4927.4 1182.02 60.37 899.12 0.31 4.5 1975 7463.01 1186.53 85.95 1339.22 0.45 4 1976 9159.86 1463.59 85.2 2064.43 0.5 3.5 1977 9600.54 1695.58 98.66 2872.32 0.66 4 1978 9041.71 2168.99 110.77 4059.86 0.7 5 1979 10863.66 2599.15 137.32 4902.1 0.75 5 1980 10922.91 3485.86 143.72 6234.23 0.88 6 1981 89072.78 13837.92 801.93 8570.05 1.03 6 1982 82206.51 15633.54 887.71 10668.34 1.1 8 1983 71967.76 10797.42 853.63 11668.04 1.53 8 1984 77888.8 9532.75 902.35 12462.93 1.87 10 1985 85097.43 12032.4 1019.22 13070.34 1.89 10 1986 82860.89 11582.62 665.93 15247.45 2.15 10 1987 81596.46 12041.61 696.57 21082.99 2.36 12.75 1988 85146.6 13713.89 702.13 27326.42 3.8 12.75 1989 93971.61 14011.49 759.42 30403.22 5.5 18.5 1990 115591.4 14702.4 827.96 33547.7 5.7 18.5 1991 108081 16078.45 827.96 41352.46 7 14.5 1992 109682.6 15357.18 923.46 58122.95 10.42 17.5 1993 109344.2 14788.13 937.41 127177.7 16.8 26 1994 106747.6 14591.36 1006.79 143424.2 29.7 13.5 1995 108162.7 13836.14 990.68 180004.8 45.03 13.5 1996 114992.2 13953.42 1012.47 238596.6 51.47 13.5 1997 116576.9 14009.95 1006.37 316207.1 56.73 13.5 1998 117870.3 13046.3 940.94 351956.2 63.49 14.31 1999 110558.6 13494.64 953.17 431168.4 63.63 18 2000 121756.6 13958.82 972.24 530373.3 72.87 13.5 2001 128418.6 14935.1 11684.85 764961.5 84.9 14.31 2002 123553.5 16439.36 13318.07 930493.9 95.2 19 2003 149878.7 17369.63 15598.81 1096536 117.9 15.75 2004 156486.8 19436.78 18252.54 1421664 129.7 15 2005 159161.4 21305.05 19439.86 1838390 144.7 13 2006 155165.5 23305.87 20344.44 2290618 157.1 12.25 2007 151699.1 25535.5 21301.04 3680090 167.4 8.75 2008 146519.6 27806.76 22035.93 6941383 192.6 11.85 2009 149486.5 29990.92 22682.77 9147417 216 10.84 2010 157905 32281.31 23364.38 10157021 223 5.43 Source: CBN Statistical Bulletin 2011 3.1.1 Model Specification The essence of regression is to reveal the causal relationship that exist between variables, in this regard the functional relationship between industrial productivity and energy supply taking control for market interest rate, capital and manufacturing output is given as; INDST = f (ENERGY, CAP, INTEREST, CPI, MANY) ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦ā€¦.. 1 Where INDST is industrial productivity ENERGY is energy/electricity supply CAP is capital generated from the capital market and loan from government INTEREST is the market lending rate CPI is price level in the economy and MANY is manufacturing output The econometric model for equation 1 is INDST = Ļ + Ļ€ENERGY +Ī²1CAP + Ī²2INTEREST + Ī²3CPI + Ī²4MANY + Āµ ā€¦ā€¦ā€¦ā€¦. 2 125
  • 5. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org Where Ļ is the intercept of the regression which assume the level of productivity at zero supply of energy ceteris paribus Ļ€ and Ī²i are parameters of estimates, Ļ€ is the slope of the regression line, other things being equal and Āµ is the random term which measure the effect of other factors on industrial productivity other than the ones identified and is independently and identically distributed (iid). In line with objective two, we therefore state the ECM which measures the co-integration (existence of long run relationship) between energy supply and industrial productivity in Nigeria. INDSTt = Ļ + Ļ€ENERGYt +Ī²1CAPt + Ī²2INTERESTt + Ī²3CPI + Ī²4MANYt + ĪøĀµt + Īµ ā€¦ā€¦.. 3 Where Īø is the adjustment coefficient which measure the degree of convergence of the explanatory variable to equilibrium, Āµt is the long run equilibrium output variable Īµ is the stochastic term, other variables remain as earlier defined. In analyzing the data we use the STATA 10.0. 3.3 Results and Discussion We then present the result in tabular format, following econometric approach in respect to the stated objectives: Model 1 (objective 1): parametric estimate on the impact of energy consumption on industrial output having a control for interest rate, manufacturing output, capital and price level (CPI) Industrial output Coefficients ā€˜tā€™statistics P>|t| Man 6.0410 16.44 .000 Energy -1.241 -2.49 .017 Capital -0.0116 -9.19 .000 CPI 449.555 6.08 .000 Interest 1106.314 2.99 .005 Constant -5553.573 -1.92 .062 R2 = .9825 F (5, 35) = 392.88 R2adjusted = .9800 No. of Obs. = 40 Software used: STATA 10.0 From the above estimated parameters of the model INDST = -5553.573 + 6.0410Man ā€“ 1.241Energy - .0116Cap + 449.555CPI + 1106.314Interest. We observed that the manufacturing input/output has a positive impact on industrial output in Nigeria as well as interest and price level in the economy. Energy consumption has a negative effect on industrial output as well as capital from the capital market and government. Hereto, at every effort of increasing energy consumption, industrial output falls by 1.241 at a unit increment, all things being equal. All the observed variables predict industrial output variability of about 98.25 per cent. Energy consumption is significant at 5 per cent with p-value of .017 which is less than 0.05, disproving the hypothesis that energy consumption has no impact on industrial output in Nigeria; hence energy consumption has a significant impact on industrial output in Nigeria. All the observed variables are statistically significant at 5 per cent level, the coefficient of determination (R2 = .9825) shows that the estimated regression line is very sound, that is have a good fit. This is also support the F-statistics (F = 392.88) that the regression line significant, different from zero. Unit root test at first difference Variables ADF Statistics 1% 5% 10% Lags Industrial -4.207 -3.668 -2.966 -2.616 2 Man -3.048 -3.668 -2.966 -2.616 2 Energy -3.228 -3.662 -2.964 -2.614 1 Interest -3.931 -3.668 -2.966 -2.616 2 Capital -3.061 -3.662 -2.964 -2.614 1 Stationary at ordinary level CPI 2.272 -3.662 -2.964 -2.614 2 In order to agree with econometric principles of data stationarity (that the data are stationary) and the estimated regression is not spurious in nature, we then carry out the unit root test (ADF test), which we observed that only price level (CPI) is stationary at ordinary level i.e. has no unit root, while the rest variables have unit root at their ordinary level i.e. are not stationary. We then carryout an ADF test again at their first differences, which are given above and we discovered the data to be stationary at their first difference. This agrees with macroeconomic data which always assume to be stationary at their first difference. Industrial output, manufacturing output, capital interest rate, and energy consumption are all stationary at 5% level, wherein their calculated ADF statistics -(4.207, 3.048, 3.061, 3.931, 3.228) greater than the 5% critical values ā€“(2.966, 2.966, 2.964, 2.966, 2.964) respectively. At this juncture we conclude that the data has no unit root. On this premise we agreed that our earlier regression is spurious; therefore we have to rerun our regression again at their first difference of industrial output, manufacturing output, energy consumption, capital interest rate variables and price level. A parametric estimate of the impact of energy consumption on industrial output taking control of manufacturing 126
  • 6. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org output, capital, interest rate and price level (CPI) d.Industrial output Coefficients ā€˜tā€™statistics P>|t| d.energy .4184 .45 .658 d.man 5.3417 6.88 .000 d.capital -.0048 -1.25 .219 d.interest -157.5287 -.32 .748 CPI -21.9592 -.56 .582 Const 1723.817 .87 .389 R2 = .5961 R2 adjusted = .5367 F(5, 34) = 10.03 No. of Obs. = 40 Indust = 1723.817 + .4184energy + 5.3417man - .0048capital ā€“ 157.5287interest + 21.9592CPI From the above estimate we observed that only manufacturing output has a significant impact on industrial output with p-value of .000 while the rest variables are not including energy consumption in the economy. Though the overall regression line has a good fit and different from zero, yet coefficient of determination has fall drastically from .9892 to .5961, showing the predictability of industrial output in the economy to be just 60 per cent instead of the 98.92 per cent of the earlier prediction by the selected variables. Secondly in this regression we also observed that the impact of energy consumption has changed from negative to positive after differencing the variables of interest. Hence with p-value of .658 for energy consumption is an indication that energy consumption has no significant impact on industrial output in Nigeria ceteris paribus. This automatically agrees with the null hypothesis that energy consumption has no impact on industrial output in Nigerian economy. From the above regression wee then predict and test the stationary of the residual Unit root test for the residual (U) at ordinary level Variable ADF Statistics 1% 5% 10% Lag Residual(U) -3.929 -3.662 -2.964 -2.614 2 From the ADF test we observed that the ADF statistics (-3.929) is greater than the 5% critical value (-2.964) which implies that the residual is stationary and independently and identically distributed in nature, no existence of unit root. And the stationarity of the residual implies that there exist a long run relationship between energy consumption and industrial output in Nigeria. We then conclude that the error term has no unit root. Cointegration test (objective two): testing the existence of a long run relationship between energy consumption and industrial output taking control of manufacturing output, capital, interest rate and price level. d.industrial output Coefficient ā€˜tā€™statistics P>|t| d.man 5.5575 9.34 .000 d.energy .5196 .73 .473 d.capital -.0123 -3.73 .001 d.interest 421.8726 1.08 .287 CPI 2562.95 .81 .424 L.U(residual) -.9450 -5.02 .000 Constant 793.06 .52 .606 R2 = .7709 R2 adjusted = .7292 F(6, 33) = 18.50 No. of Obs. = 40 From the estimate we observed that policy adjustment coefficient lie below the equilibrium by .9450 and all things being equal, as policy gears toward enhances energy supply increases and consumption follow suit that industrial output will converges to equilibrium, which will promote productivity and efficiency in Nigeria. The statistical significant of the adjustment coefficient is an indication that improving energy supply will enhance industrial productivity in the economy. Since variable CPI and interest rate significant we then drop them and see if the adjustment coefficient will change. d.industrial output Coefficient ā€˜tā€™statistics P>|t| d.man 5.522 9.42 .000 d.energy .7015 1.05 .301 d.capital -.0100 -5.11 .000 L.U (residual) -.8687 -4.99 .000 Constant 1446.893 1.11 .275 R2 = .7615 R2 = .7342 F(4, 35) = 27.94 Observation = 40 As we remove those two variables we can now see that all the variables are significant except the energy consumption which calls for policy implication to foster industrial output productivity. The convergence of the adjustment coefficient has also reduced; hence the convergence of industrials output to equilibrium in line with energy supply and consumption is a thing of power policy readjustment and change in policy making towards policy enhancement. 127
  • 7. Journal of Economics and Sustainable Development ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol.4, No.14, 2013 www.iiste.org 5. Conclusion The study reveals that other things being equal energy/electricity supply has no significant impact on industrial productivity in Nigeria, though at ordinary status it seems to be significant but negative, after differencing the data to stationary it reveals its true impact of not being significant but having a positive impact. Other variables control seems to have a significant impact on industrial productivity in the economy. The ADF test reveals that all the variables are stationary only at first difference except CPI. The regression is none zero type and the selected variables are good predictors of industrial output variability in Nigeria. We believe that industrial output will converge to equilibrium in the nearest future if sanity returns to the power sector; hence we propose a full sanitization of the power sector with evaluation, monitoring and appraisal of the generating transmitting and distributing units quarterly. Policies should gears toward a private power driving to avoid corruption and existence of social desperadoes in the said sector, restriction generators importation, and revitalization of consumption pattern. Suggested area for future study include economic growth and manufacturing output, critical evaluation of the Nigerian industrial sector, electric energy implication on economic productivity, and power supply and it implication on national development of vision 202020 in Nigeria. Suggested area for future study include economic growth and manufacturing output, critical evaluation of the Nigerian industrial sector, electric energy implication on economic productivity, and power supply and it implication on national development of vision 202020 in Nigeria. 6. Acknowledgement Researchers acknowledge the President of the Federal Republic of Nigeria Dr. Good luck Jonathan and his Special Adviser on Research and Strategy; Bar. Oronto Douglas, for their unalloyed support in course of our educational pursuit. Researchers also acknowledge the Departments of Economics of the University of Port Harcourt, Niger Delta University and University of Nigeria Nsukka for creating the enabling environment for the research. Researchers finally wholeheartedly appreciate the support and encouragements of their immediate family members, Dr. Edoumiekumo Samuel, Dr. Ajie H.A Prof. G.S. Angaye Dr. Michael Baghebo Mr. Nwajinka Charles Chibundu and other colleagues in the department of the prestigious Niger Delta University, in Bayelsa State of Nigeria. References Abosedra, S. A., & Ghosh, S. (2009). Electricity consumption and economic growth: The case of Lebanon. Applied Energy 86, 429-432. Adenikinju, O. (2005). Analysis of the cost of infrastructure failure in a developing economy: The case of electricity sector in Nigeria. AERC Research paper , 148. Alper, O., & Atila, C. (2007). Multi-scale causality between energy consumption and GDP in emerging markets: Evidence from Turkey . Investment management and Financial Innovation 4(6) , 60-70. Barro, R. (1990). Government Spending in a Simple Model of Endogenous Growth . Journal of Political economy Vol 98, 1321-1342. Braimoh, & Okedeyi. (2011, July). Energy and Power Generation, Transmission and distribution in Lagos State. Retrieved September 12, 2011, from http://cefolassaocoed.net/index.php?option=com_content&view=article&id=83 & itemid=88&Limits tart=4 Ciarreta, A., & Zarraga, A. (2010). Economics Growth- Electricity Consumption Causality in 12 European Countries:Adynamic Panel Data Approach. Energy policy 38 , 3790-3796. Ekpo, A. H. (2009). The Global Economic Crisis and the crisis in the Nigerian Economy. Presidential Address to the 50th Conference of the Nigerian Economics Society. Abuja-Nigeria: Nigeria Economic Society. Ernest, D., Ganiastar, T., & Mystelka, L. (1994). Technological capabilities: A conceptual Framework. UNCTAD six-country Research Project Report. Ghosh, S. (2002). Electricity consumption and economic growth in India. Energy Policy 30(2) , 125-129. Granger, C. W. (1980). Development in the study of co-integrated economics variables. Oxford Bulletin of Economics and statistics 48 , 213-228. Helpman, I. E. (1992). Endogenous Macroeconomic theory and Growth. European Economic Review , 36. Hodder, B. W. (1973). Economic Development in the Tropics. London: Mathuen and Co Ltd. Hondroyiannis, G., Lolo, S., & Papapetrou, E. (2002). Energy consumption and Economic growth: Assessing the evidence from Greece . Energy Economics 24(4) , 319-336. Kniivila, M. (2008). Industrial development and Economic growth: Implication for poverty reduction and inequality. UN publication for industrial Development . Lee, K. S., A, & Anas, A. (1992). Impact of infrastructure deficiencies on Nigerian Manufacturing. Infrastructure and Urban development Department(IUDD). 128
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