Energy Consumption and Sectoral Performance: Empirical Evidence for Nigeria
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Keywords:
Energy consumption, VECM, sectoral performance, co-integration, causality.Abstract
This study investigates the causal relationship between energy consumption and sectoral performance in Nigeria. Johansen Co-integration test and Vector Error Correction Model (VECM) technique with annual time series data covering the period 1970–2018 was
employed in testing the causal relationship. The data was obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and International Energy Agency (IEA) Statistical Database. Results revealed that there is bidirectional relationship at the macro and sectoral levels with energy consumption. The study concludes that energy conservation policy could have detrimental impacts on economic growth and the performance of the different sectors. Therefore, energy efficiency measures should be put in place and a considerable amount of renewable energy included in the energy mix of the country.
