The dynamics of electricity consumption and private investment in Nigeria

Abstract

This study investigates the nexus between electricity consumption and private investment in Nigeria. The study spans the period 1981-2013 and uses the Johansen co-integration analysis and error correction model. The results show that the components of electricity consumption induced a positive and significant effect on private investment. The study further shows the possibility of long-run equilibrium convergence between the components of electricity consumption and private investment. The research therefore recommends that the government should ensure that private investments in electricity are properly encouraged in a manner that it will raise the nation's production capacity. Also, the government should create an enabling environment for the development of electricity markets.