Electricity Consumption and Economic Growth in Nigeria

In: Social Issues

Submitted By bizvertize
Words 4241
Pages 17
ELECTRICITY CONSUMPTION AND ECONOMIC GROWTH IN NIGERIA: NEW INSIGHTS INTO THE CAUSALITY RELATIONSHIP

AN ECONOMETRICS ASSIGNMENT SUBMITTED BY
-------------------------------------------------
OLUWAFEMI JOSHUA IBRAHIM
MATRIC NUMBER: 121937
LEVEL: 700

LECTURER IN-CHARGE: PROFESSOR E.O. OGUNKOLA

November, 2010

1) STATEMENT OF THE PROBLEM Electricity plays a very important role in the socio-economic and technological development of every nation. It is widely accepted that there is a strong correlation between socio-economic development and the availability of electricity (Sambo, 2008). It is generally recognized that energy, including electricity, plays a significant role in economic development, not only because it enhances the productivity of capital , labour and other factors of production, but also that increased consumption, particularly commercial energy like electricity, signifies high economic status of a country(Aklas & Yilmaz, 2008). The relationship that exists between electricity consumption and economic growth has been of great interest to many researchers. The study of this relationship arises from the need to understand the complex links between these variables. Such understanding is basic to regulators and investors in deregulated electricity markets, in order to design a system that is reliable, efficient and growth-efficient. The empirical argument has been centered on whether economic growth responds to increase in electricity consumption, or whether increase in economic growth propels increase in electricity consumption. To this end, various empirical studies have explored the causal and long-run relationship that exists between electricity consumption and economic growth. So far, there have been different and conflicting empirical findings as regards this relationship in different economies. The empirical outcomes of the past studies…...

Similar Documents

Economic Growth

... Agriculture, services and manufacturing industries play a vital role in the development of the Indian economy. The IT outsourcing, software and call center/ BPO industries, in particular, have helped skyrocket India’s economic development in recent years.   Economic development in India still depends on the various sectors that constitute the Indian economy – agriculture, services and manufacturing industries.   India is rated as one of the top economies in the world in terms of purchasing power parity (PPP) of the gross domestic product (GDP) by leading financial entities of the world, such as the International Monetary Fund, the World Bank, and the CIA (as referenced in the CIA World Factbook).   As far as agriculture is concerned, India is the second largest in volume of output. Certain related sectors of agriculture have played a major role in the development of the Indian economy by providing employment to a number of people in the forestry, fishing and logging industries.   In 2009, the agricultural sector contributed 17.5% to the entire GDP, and more than 50% of the total labor force working in India is employed in the agricultural sector.   Production volume has gone up in Indian agriculture at a consistent rate since the 1950s. Much of this improvement can be attributed to the five-year plans that were established for the development of Indian agriculture. Developments in irrigation processes, as well as various modern technologies used have contributed to...

Words: 3844 - Pages: 16

Economic Growth

...Economic growth and Small Countries Kathy Brophy ECO204: Principles of Microeconomics November 21, 2010 Phelicia Price Economic growth and Small Countries Economic growth in many countries is a slow bitter process. With disease, current high population numbers, growth in population, limited resources, and much more will limit a small and poor country’s from being able to build capital. The AIDS virus has taken many innocent victims and left others ill and unable to work. The numbers of AIDS victims are large by any standard. I was worried about the virus getting close to home when I learned of its existence in the late 1980’s. Since then I have come across several persons that currently have the virus or have died from the AIDS disease. Healthy individuals are needed to work in order to build product for consumption and exporting. Economic growth through resources will build much needed capital, which will increase a countries wealth in time. The HIV/AIDS pandemic has been most devastating for the smaller uneducated countries around the world. (Case, Fair, & Oster, 2009) The HIV/AIDS pandemic has been the most devastating disease in the world. Forty million were infected with the virus before the year beginning 2006. Twenty-five million people died from aids by the end of 2006. (Case, Fair, & Oster, 2009) “In 2005 alone, 3.1 million people died of AIDS and 4.9 million were newly infected with HIV (Case, Fair, & Oster, 2009)”. These numbers are...

Words: 1777 - Pages: 8

Youth Unemployment and Economic Growth

...problem of unemployment in Nigeria was the establishment of National Directorate of Employment (NDE). Unemployment has been defined as the absence of a job by an able bodied person. It is a term often denoting the percentage of people in the labour force who are not working. The concept of unemployment is not an entirely new one in Nigeria. Patrick Koshoni, (2005), a former Labour Minister has this to say “The problem of mass unemployment is not new, it has been with us with various degree for the past decades. Increasing population explosion of the last few years raised the situation to a critical dimension which cannot be ignored without disastrous consequences. The number of unemployed persons keeps increasing with each passing day. Thousands of Nigerian graduates who have completed the compulsory National Youth Services Corps (NYSC) programme still remain unemployed. There are also those who did not enjoy tertiary education but have some basic qualifications and skills that are equally unemployed. This situation demand immediate action by government at all level. This is because unemployment affects human development and also breeds poverty, which may lead to low levels of consumption and income. The unrelenting social upheavals in form of increasing crime rate and insecurity in the country are the unfortunate consequences of high unemployment rate. 1.2 Statement of Problem This research takes a look at the impacts of youth unemployment in the growth of Nigerian......

Words: 9897 - Pages: 40

The Role of Entrepreneurship in Economic Development of Nigeria

...in Economic Development: The Nigerian Perspective Dr. Mrs Ann Ogbo AGU CHIDIEBERE NWACHUKWU Dept. Of management, University of Nigeria, Enugu Campus. PMB 011 *E mail of the correspondence author: annogbo@yahoo.com brightchidi@yahoo.com Abstract The aim of the paper is to develop and analyse the contributions of entrepreneurship in the economic development through SME development in Nigeria. A total of 100 SMEs were randomly selected from a cross section of a population of all SMEs spread around some states of Nigeria and covering virtually all forms of enterprise. Participants were selected through a simple random sampling. The responses to the questionnaires were complemented with personal interviews of some SMEs operators. The responses of the participants were analyzed using the statistical package for social sciences (SPSS), which generated the frequency distributions, means, standard deviations, chi-square statistics, analyses of variance, etc of the responses. The hypotheses of this research which were tested at 0.05 level of significance using chi-square statistics hinged on identifying the greatest problem which SMEs face in Nigeria, the identification and ranking of the top ten problems or challenges of SMEs in Nigeria and the relationship between the form and nature of the business enterprise and its sources of funding for its operations. The major findings of this study include the following: SMEs have played and continue to play significant roles in the growth,......

Words: 7375 - Pages: 30

The Effect of Value Added Tax on Economic Growth in Nigeria

...regulate economic growth and development across every economy. As a result, governments across the world impose one form of tax or the other. The main purpose of imposing tax has been for the government concerned to use the proceeds of the taxation to run the government and to provide essential services. Before a country considers efficient and effective way of administering tax system; it must possess a clear picture of the scope of its tax system as well as considering the tax rate and tax base over time. The quantity and quality of revenue required by tax administrators are to a large extent determined by the type of tax system which is introduced. A nation’s tax goals are not achieved by designing a tax system which is fair, any fair system which is not administered as planned becomes inequitable. Thus, a good tax system is capable of financing the necessary level of public spending in the most efficient and equitable way possible. It should also (1) raise enough revenue to finance essential expenditures without recourses to excessive public sector borrowing, (2) raise the revenue in ways that are equitable; that minimized its disincentive effects on economic activities, (3) do so in ways that do not deviate substantially from international norms. (Tanzi and Zee,2000). It is being noted that the aims and objectives of taxation differ from one country to the other. However, an essential common feature of tax has been the dynamic nature in every system to reflect the......

Words: 11591 - Pages: 47

Global Recession, Oil Sector and Economic Growth in Nigeria

...Asian Transactions on Basic and Applied Sciences (ATBAS ISSN: 2221-4267) Volume 01 Issue 06 GLOBAL RECESSION, OIL SECTOR AND ECONOMIC GROWTH IN NIGERIA. BY S. O. OLADIPO (M.sc) Department of Economics and Accounting Bells University of Technology, Ota. E-mail address: giftsamniyo@yahoo.com AND PROF. J. O. FABAYO Department of Economics, Obafemi Awolowo University, Ile-Ife ABSTRACT This study investigates global recession and the oil sector, based on its effects on economic growth in Nigeria. No doubt the global economy has been experiencing some disturbances. Major economies of the world have been affected and so has the major sectors of these economies especially the ones that has a direct bearing with international trade been affected. The oil sector particularly has been one of the hit. For a country like Nigeria whose international trade is majorly in oil, the effect has become an issue. Empirical analysis using the Ordinary Least Square (OLS) reveals that there was a negative relationship between GDP and oil produced (domestic consumption and export) which is significant at 5% lever of significance i.e. (P < 0.05). The result also showed that there exists decline in the oil sector due to the global recession despite all measures given by government to curb it effects. It was Jan 2012 recommended that the federal government needs to deregulate the sector for efficient performance, and also come up with more rigorous policies that will reduce this effects on the real......

Words: 5684 - Pages: 23

The Effect of Value Added Tax on Economic Growth in Nigeria

...The Impact of Vat on the Economic Growth of Bangladesh CONTENTS * Introduction * Objectives of the study * Salient features of Bangladesh’s current tax system * Growth trends and revenue structure of Bangladesh * Contribution of direct and indirect taxes to revenue * Reasons for introducing vat in Bangladesh * Ratio of VAT to Revenue & VAT to Tax * Revenue Structure during Pre and Post VAT Regime * VAT Rates in Selected Countries * VAT Productivity in Selected Countries * Some Important Features of VAT in Bangladesh * Tax Base for VAT * Arguments For VAT * Arguments against VAT * Reforms in VAT: Current Initiatives Introduction: Value Added Tax (VAT) is imposed on value added by a manufacturer of a firm or distributors. Value added tax means a tax on the amount by which the value of an article has been increased at each stage of production. It is a multistage consumption tax imposed on goods and services, which is collected at every stage of production and distribution rather than at the retail stage alone. Objectives of the Study: We can gain knowledge about the tax system (especially VAT) of Bangladesh by studying this topic. As following aspects of tax we can learn from this study: 1. To present an overview of tax system of Bangladesh. 2. To evaluate Govt. Performance in collecting revenue. 3. To identify the effect of the tax system (especially VAT) to economic development of Bangladesh. 4. To......

Words: 297 - Pages: 2

Fdi and Nigeria Economic Growth

...THE EMPIRICAL ANALYSIS OF IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN NIGERIA BY OKUNLOLA TUNDE S. MATRIC NO: 139191 September 2011 Being research work submitted to Department of Economics, Faculty of Social Sciences, University of Ibadan, in partial fulfillment of the requirement for the award of Bachelor of Science (B.Sc) in Economics CERCTIFICATION I hereby certify that this work was carried out by OKUNLOLA TUNDE S. of Matric No 139191 in the Department of Economics, Faculty of Social Sciences, University of Ibadan. …………………………………. ……………………………… Date Dr. B. Fowowe Supervisor DEDICATION My sole dedication goes to God almighty whose mercy has never ceased in changing me despite all odds, whose boundless love and vast grace is bringing to pass my childhood dreams and fantasies. ACKNOWLEDGMENT My deepest gratitude goes to my parents who always, tirelessly and sacrificially support me, trust me, care for me and love me despite all my short comings and even when it so difficult. May the lord reward you abundantly. And also to my supervisor, Dr. B. Fowowe, I say thank...

Words: 12592 - Pages: 51

The Impact of Foreign Direct Investment on Economic Growth in Nigeria

...INTERNATIONAL ECONOMICS THEMES AND ISSUES MMN222154-13- AB THE IMPACT OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH IN NIGERIA BY AZUMONYE M. CHUKWUEMEKE S1344407 INTRODUCTION Over the years, the debate on the role of foreign direct investment (FDI) as a factor that induces economic growth has received the attention of policy makers, researchers and international organizations (Tumala et al, 2011). There is no denying that most countries strive to attract foreign direct investment (FD1) because of its putative advantages as a tool of economic development. Therefore, this essay seeks to ascertain the extent at which growth in foreign direct investments (FDIs) influences economic growth in Nigeria in the long-run and investigated the empirical relationship between FDI and privatization. Nigeria, after independence began with an economy that was mostly driven by the public sector. According to Tumala et al (2007), Nigerian Enterprises Promotion Decree (NEPD) of 1972 imposed several restrictions on FDI entry, thereby earning the tag „the indigenization policy‟. It reserved 22 business activities exclusively for Nigerians, including advertising, gaming, electronics manufacturing, basic manufacturing, road transport, bus and taxi services, the media and retailing and personal services. Foreign investment was permitted up to 60 per cent ownership and provided that the proposed enterprise had, based on 1972 data, share capital of N200, 000 ($300,000) or......

Words: 3070 - Pages: 13

Economic & Financial Analysis of Nigeria

...Economic and Financial Outlook in 2015 External Shocks Creating New Opportunities FSDH Research January 2015 Economic and Financial Outlook: 2015-2019 1.0 Global Economic Growth: According to the World Economic Outlook (WEO) Update of the International Monetary Fund (IMF), January 2015 Edition, the global economic growth is forecast at 3.5% and 3.7%, for 2015 and 2016 respectively. The forecasts were reviewed downward by 0.3% The IMF forecasts a global economic growth of 3.5% and 3.7% for 2015 and 2016 respectively. relative to the October 2014 WEO. The revisions reflect a reassessment of prospects in China, Russia, the Euro-area, and Japan as well as the weaker activity in some major oil exporters because of the sharp drop in oil prices. The United States (U.S.) is the only major economy for which growth projections have been raised upward. The IMF added that the global growth will receive a boost from the lower oil prices. However, this boost is projected to be more than offset by the negative factors, including investment weakness as adjustment to diminished expectations about medium-term growth continues in many advanced and emerging market economies. The U.S. is expected to grow by 3.6% in 2015 and slow down to 3.3% in 2016, supported by domestic demand due to lower oil prices, more moderate fiscal adjustment, and The U.S. is expected to grow by 3.6% in 2015 and slow down to 3.3% in 2016. continued support from an accommodative monetary policy stance...

Words: 11443 - Pages: 46

Economics Growth

...EDUCATION QUALITY AND ECONOMIC GROWTH Education Quality and Economic Growth Education Quality and Economic Growth Eric A. Hanushek Ludger Wößmann THE WORLD BANK Washington, DC © 2007 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 1 2 3 4 5 10 09 08 07 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to......

Words: 17789 - Pages: 72

Economic Growth

...Africa’s performance and prospects Africa’s macroeconomic prospects Africa’s gross domestic product (GDP) growth is expected to strengthen to 4.5% in 2015 and 5% in 2016 after subdued expansion in 2013 (3.5%) and 2014 (3.9%). The 2014 growth was about one percentage point lower than predicted in last year’s African Economic Outlook, as the global economy remained weaker and some African countries saw severe domestic problems of various natures. But the world economy is improving and if the AEO 2015 predictions are right, Africa will soon be closing in on the impressive growth levels seen before the 2008/09 global economic crisis. Figure 1. Africa’s economic growth, 2002-16 0 1 2 3 4 5 6 7 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(p) 2016(p) Africa Africa excluding Libya Growth rate (%) Note: (e) estimates; (p) projections. Source: Statistics Department, African Development Bank. West Africa achieved relatively high growth of 6% in 2014 despite its battle with the Ebola virus (Box 1). Nigeria’s growth of 6.3% came mainly from non-oil sectors showing that the economy is diversifying. But Southern Africa’s growth fell below 3% as the key South African economy only grew by 1.5%. Overview ii African Economic Outlook © AfDB, OECD, UNDP 2015 iii Table 1. Africa’s growth by region, 2013-16 (Real GDP growth in percent) 2013 2014 (e) 2015 (p) 2016 (p) Africa 3.5 3.9 4.5 5.0 Central Africa 4.1 5.6 5.5 5.8 East Africa 4.7 7.1 5.6 6.7 North Africa 1.6 1.7......

Words: 2461 - Pages: 10

Economics in Nigeria

...The Republic of Nigeria, more commonly known as Nigeria is the largest country in Africa and was under the control of Great Britain until 1960 when they gained independence. In 1999 Nigeria returned to a democratic form of government which has worked well for them until just recently when security concerns began to arise due to the presence of the radical Islamist sect, Boko Haram. Nigeria has the continent’s largest population with 173.6 million people and the largest economy as well. Although Nigeria’s economy is the largest in Africa, 61 percent of the residents are reported to survive on less than $1.00 per day with corruption within the government being the main reason for poverty. Nigeria is also the largest oil producer in Africa and the 10th largest oil producer in the world and as of 2009, the Nigerian film industry was the second largest movie producer in the world. When looking at economic freedom, Nigeria is ranked 120th in the world and 22nd in the Sub-Saharan Africa region and has an Economic Freedom Score of 55.6. The labor force of Nigeria is roughly 54.2 million or 56.1 percent of the population and the unemployment rate is 8%. Nigeria has experienced strong economic growth averaging 6.5 percent within the past ten years and inflation has decreased in recent years to the rate of 8 percent. It is my goal to explore unemployment in Nigeria, the reason for its strong economic growth as well as the improvement and decline in the ten economic......

Words: 1755 - Pages: 8

Economic Growth

...answering all these questions by introducing their theory of development. I would like to start with Rostow’s theory of development; in the Stages of Economic Growth he argues that a state should follow some rule and should pass through some important stages in order to develop. According to Rostow these are the stages of economic growth ,Traditional society, Pre-conditions for take-off, Take off, Drive to maturity, Age of high mass consumption and beyond consumption. Traditional society is characterized by survival agriculture or hunting and gathering with a limited technology. At this stage people look at change negatively. Pre-conditions to "take-off" in this stage there is more demand for raw materials and technology and batter machinery system to use in agriculture. Take off the stage of economic growth that Urbanization increases, Industrialization proceeds, and sectors in the economy shifts quickly towards secondary. Similarly the other stages of economic growth also have some requirements In this essay, he talks about the theory of economic development. He argues that the more backward an economy is, the more likely certain conditions will occur. His theory of economic backwardness contrasts Rostow’s stages of economic growth. According to him the more “economically backward” a country is, the faster industrial growth will take place on that country. Thought he explains backwardness in relation to capital, income per capita, literacy, savings and level of......

Words: 359 - Pages: 2

Economic Growth

...Economic growth is increases in output. It can occur if previously unemployed resources are employed, there are more resources or existing resources improve in quality (Grant and Stanlake, 2000:285). According to the report, the economic gap between the north and the south of the United Kingdom was significantly enlarged in 10 years (White, 2015). Regional outcomes in Britain have exhibited strong signs of divergence and asymmetries on the basis of a North-South divide for over twenty years (lse.ac.uk, 2006). The purpose of this essay is to examine the regional imbalance in the United Kingdom. After first explaining measurable growth by some economic theories, it will analyse actual and potential growth by drawing business cycle and LRAS diagrams. Next, it will analyse the reasons for regional imbalance. Finally, it will evaluate actual supply side policies. Real GDP measures the value of goods and services produced at constant prices, the change of the real GDP only reflects the change of the quantity of production. In addition, people prefer to use real GDP than nominal GDP because real GDP reflects the economy’s ability to satisfy people’s needs and desires (Mankiw and Taylor, 2011:496-497). According to below graph, it shows that UK economy has experienced up-and-down swings in the years since 2003. Before 2008, growth more stable between 0.2 and 1.8 per quarter. However, GDP is more unpredictable after 2009. (Source: BBC news, 2015) The first type is actual growth......

Words: 2107 - Pages: 9