Energy Efficiency and Manufacturing Sector Performance in Nigeria: Dynamic Model Approach

Idoko Cletus Usman and Wada Emmanuel Ome
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Idoko Cletus Usman: Department of Economics, Faculty of Social Sciences, Kogi State University, Anyigba, Nigeria
Wada Emmanuel Ome: Department of Economics, Faculty of Social Sciences, Kogi State University, Anyigba, Nigeria

Noble International Journal of Economics and Financial Research, 2018, vol. 3, issue 8, 86-94

Abstract: Energy is far and wide regarded as a driving force behind manufacturing sector production. However, energy intensity is a measure of how efficiently energy is used in the manufacturing sector. This makes it crucial to examine energy efficiency and manufacturing sector performance in Nigeria from 1986-2017. Time series secondary data sourced from CBN Statistical Bulletin and International Energy Agency on manufacturing sector contribution to GDP as proxy for manufacturing sector performance was used as dependent variable, while energy efficiency proxy by energy intensity with labour and capital intensity as the independent variables. The study employed estimation techniques of ADF unit root test, Johansen co-integration test and Error Correction Model. The results based on Error Correction Model revealed that 65% of the deviation in the variables employed in the study would be restored in one year. It was also revealed that energy intensity, labour intensity and capital intensity had significant positive impact on manufacturing sector contribution to GDP in Nigeria within the study period. The study concluded that increased in energy intensity, labour intensity and capital intensity led to increase in manufacturing sector performance in Nigeria within the study period. Based on the findings, the study recommended that government should ensure there is increase in the amount of energy intensity so as to enhance manufacturing sector performance in Nigeria. Government and Non-Governmental organizations should also make sure that the amount of labour intensity is also increased in order to promote the performance of manufacturing sector in Nigeria. Finally, government should ensure that adequate provisions are made in the energy sector in order to increase the amount of capital intensity in the manufacturing sector so as to improve its performance in Nigeria.

Keywords: Energy Intensity; Labor Intensity; Capital Intensity and Manufacturing Sector (search for similar items in EconPapers)
Date: 2018
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