Effect of Energy Utilization and Financial Development on Economic Growth in Nigeria

Abstract

The necessity for rapid economic growth has not only been of great concern to global institutions and agencies but has continued to dominate discussions at major economic conferences at the national and international levels. There is an implicit assumption of positive correlation between economic growth, as measured by increase in national output, and the welfare of citizens, with the effect that governments seek to understand the real causes of output growth to aid formulation and implementation of policies that promote the welfare of their citizens. The depth of academic research in this area of knowledge is a further indication of its relevance to humanity. This study builds on existing body of knowledge on the subject by estimating the contributions of the financial and energy sectors to the Nigerian economy between 1981 and 2018. Using the estimation method of dynamic ordinary least squares (DOLS), the study reveals electricity consumption, inflation and financial development as positive predictors of growth while oil price and gross fixed capital are negative predictors. From the above findings, we conclude that robust financial and energy sectors are major influencers of growth and therefore suggest that adequate attention be given to development of these sectors through formulation and implementation of supportive policies. In addition, we see the necessity for a need assessment of the infrastructure needs of the real sector in order to ensure that infrastructure critical to its performance is identified and addressed through targeted investment.

The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

“…Similarly, trade openness asserts a negative impact on economic growth at a 1% significance level, and this result is not in line with (Elfaki et al 2018;Le 2020;Shahbaz et al 2013) findings. Energy consumption is found to be positively associated with economic growth at a 1% significance level, and this result is in line with (Abosedra et al 2015;Le 2020;Okoye et al 2021;Shahbaz et al 2013) and contradicts (Elfaki et al 2018). The positive relationship between industrialization, financial development, energy consumption, and economic growth reveals that a 1% increase in industrialization, financial development, and energy consumption is associated with an increase in the economic growth of 0.312%, 0.192%, and 0.873%, respectively.…”

“…As shown in Table 4, in the long run, industrialization has a statistically significant positive impact on economic growth at a 10% level of significance, and this result is consistent with (Ndiaya and Lv (2018); Opoku and Yan (2019); Szirmai and Verspagen 2015;Wonyra 2018) and also contradicts (Saba and Ngepah 2021). Financial development shows a statistically significant positive influence on economic growth at a 1% level, and this finding is supported by (Abosedra et al 2015;Le 2020;Okoye et al 2021;Shahbaz et al 2013). However, money supply displays a statistically significant negative effect on economic growth at a 5% level of significance.…”

“…The results confirm that financial development and energy consumption have a positive link with economic growth. Using DOLS, Okoye et al (2021) found that energy consumption and financial development positively influenced economic growth in Nigeria over the period 1981-2018.…”

The Relevance of Financial Capabilities Development by Social Workers in Alleviating Poverty

“…Poverty alleviation refers to the conscious act of reducing the severity of poverty and thereby improving the quality of life of citizens exposed to poverty by minimizing the incidence and severity of poverty (Okoye et al, 2021). It is more distinct from poverty eradication as it is a more radical concept that seeks to eliminate poverty from society (Okoye et al, 2021).…”

“…Poverty alleviation refers to the conscious act of reducing the severity of poverty and thereby improving the quality of life of citizens exposed to poverty by minimizing the incidence and severity of poverty (Okoye et al, 2021). It is more distinct from poverty eradication as it is a more radical concept that seeks to eliminate poverty from society (Okoye et al, 2021). The rising incidences of poverty, especially in developing economies, have become a focal phenomenon that keeps on receiving global attention; hence, poverty-related issues are always at the center of discourse in many academic and economic summits both at national and international levels (Okoye et al, 2021).…”