Intl Conference on Economics, Finance & Business, Prague

ENERGY EFFICIENCY AND ECONOMIC GROWTH IN NIGERIA: A LONG-RUN PERSPECTIVE

JAMIU IBRAHIM AMINU, MOHAMMED SHAMWIL , IBRAHIM ABDULLAHI

Abstract:

This study investigates the relationship between energy efficiency and economic growth in Nigeria using time series data from 1980 to 2023 and the Stochastic Frontier Analysis framework. Results reveal that Nigeria’s energy demand is both price-elastic and income-elastic, indicating that changes in energy prices and income significantly influence consumption. Labour and capital act as substitutes for energy, while technological innovation boosts productivity but increases energy demand. The estimated average technical efficiency is relatively high at 95%, though marked by volatility and structural disparities across sectors. These findings highlight the critical role of policy consistency, reliable energy supply, and targeted investment in modern technologies to enhance efficiency and align Nigeria’s growth with sustainable development goals.

Keywords: Energy Efficiency, Economic Growth, Stochastic frontier analysis, Nigeria