economic growth

, ,

ADDRESSING THE ENERGY CONSUMPTION ECONOMIC GROWTH NEXUS: THE NIGERIAN CASE

, ,

Omolola Olarinde* and Abraham Adeniran**

ABSTRACT

Energy is critical to the survival and expansion of any economy. In Nigeria, energy consumption has been skewed towards household use, and below thresholds for sector-driven growth. The article updates, in time and methodology, those studies highlighting the significance of energy use for economic growth, using the Bound test and the Auto Regression Distributed Lag (ARDL) to establish the long- and short-run relationships between disaggregated energy consumption and economic growth in Nigeria from 1990 to 2016. The variables considered are real GDP, energy consumption decomposed into electricity and petroleum consumption, labour and capital. The findings show that, in the short and long run, petroleum consumption and labour have a significant positive relationship with GDP. Furthermore, the causality results show that feedback causation between economic growth and energy consumption as well as labour exists, while one-way causation runs from labour to economic growth. The study recommends diversification of the power-generation portfolio in the country, as this will improve energy consumption. Also, full deregulating policies in the energy sector would encourage industrialization and move energy demand towards increasingly productive uses. Finally, a strong institutional framework is needed to ensure energy policies achieve their objectives and targets.

Keywords: Energy Consumption, Economic Growth, Industrialization, Error Correction.

DOI: https://dx.doi.org/10.4314/jsdlp.v9i2.6

* Lecturer, Department of Economics, Elizade University, Ilara-Mokin, Ondo State & Research Fellow, Institute of Oil Gas, Energy, Environmental and Sustainable Development, Afe Babalola University. Email: omolola.olarinde@elizadeuniversity.edu.ng.

** Associate Research Fellow, Institute of Oil Gas, Energy, Environmental and Sustainable Development, Afe Babalola University

, ,

TRANSLATING THE EXTRACTIVE RESOURCES TO ECONOMIC GROWTH AND TRANSFORMATION

, ,

George Kararach*

ABSTRACT

Most African countries are heavily endowed with natural resources. This gives the continent both the potential for, and threat to, growth/development. Natural resources yield “rents,” or profits from their production, which are crucial for resource-led development. The literature on the “rentier state” and how resource rents interact with institutions and political economy dynamics shows that rent flows through the socio-economic system influence development outcomes. Although the natural resources sector provides significant opportunities for the near term, it also does have significant risks for future generations, and the costs and benefits of resource extraction are seldom borne equitably. Ensuring social equity is a major challenge in natural resource governance, generally falling to governments to referee trade-offs and protect the most vulnerable, including current and future generations. It is critical, therefore, for the continent to address itself to important policy questions to ensure that natural resources are a boon for Africa’s sustainable growth

Keywords: Africa; sustainable growth; rentier state; development.

DOI: https://dx.doi.org/10.4314/jsdlp.v8i1.5 1.

* Senior Economist at the Economic Commission for Africa, Addis Ababa, Ethiopia.