POWERING INDUSTRIAL GROWTH: THE ROLE OF ENERGY ACCESS IN MANUFACTURING PERFORMANCE IN NIGERIA

Abstract

Purpose. This study examines the impact of energy access on manufacturing performance in Nigeria with the access to electricity, electric power consumption and renewable energy consumption while Manufacturing value added was used as an indicator of manufacturing performance.  

Design/methodology/approach. This study used Secondary data from the World Development Indicators (WDI) of World Bank which is available on an annual basis between the year 2000 and 2024. Autoregressive Distributed Lag (ARDL) bounds testing method is employed in estimating short-run and long-run relationships, which is backed by diagnostic tests to determine model reliability.

Findings. The long runs estimates showed that access to electricity and consumption of renewable energy had negative and statistically significant impacts on manufacturing value added, while the use of electric power had an impact that was statistically insignificant. Current value of access to electricity had positive but non-significant effect in short run, while the lagged values had positive and significant effect on the short run manufacturing performance. The short run effect of renewable energy consumption was negative and significant.

Originality. This study offers a disaggregated analysis of energy access by analyzing energy access in the form of electricity access, electric power consumption, and renewable energy consumption in one framework, ARDL, which is a different approach from the previous studies that mainly investigated the relationship between aggregate energy consumption and industrial output. The study adds new empirical facts to the energy–manufacturing link in Nigeria, using recent data from 2000 to 2024, to inform policies that seek to improve manufacturing performance through improved energy infrastructure and sustainable energy use.

Keywords: Energy access, Manufacturing performance, Access to electricity, Electric power consumption, Renewable energy consumption, ARDL, Nigeria.