Analysing energy consumption and poverty reduction nexus in Nigeria

ABSTRACT

This study analysed the impact of energy consumption on Nigeria’s poverty and causality between poverty and energy consumption. Annual data on energy sources and poverty headcount were used spanning from 1990 to 2017. The Autoregressive Distributed Lag Model (ARDL) was engaged. The consumption of modern energy was established to be efficient in reducing poverty in Nigeria. Non-modern sources of energy consumption (Fuelwood and coal) were found to considerably and significantly increase poverty while electricity was revealed to extensively reduce poverty in Nigeria. Household size, female labour force participation rate, and inflation rate were also substantial contributors to the high poverty level in Nigeria. A bi-directional causality was found between poverty and low quality of energy consumption (fuelwood). We consequently, advocate for the availability of modern energy supplies, increasing female employment rate, and the reduction of household sizes for effective poverty reduction in Nigeria.

KEYWORDS:

• Dynamic analysis
• Energy consumption
• Modern energy
• Poverty

JEL CLASSIFICATION:

• C22
• I32
• Q43
• P46

Disclosure statement

There is no financial interest or benefit that has arisen from this study.

Data availability

The data supporting the findings of this study are openly available in:

1. World Bank Data and Research-World Development Indicators. Available at: www.worldbank.org.

2. World Bank, ‘Electricity Consumption (kWh per capita),’ 2018. Available at https://data.worldbank.org/indicator/EG/USE.ELEC.KH.PC.

3. Factfish Statistics (2018). Nigeria: Fuelwood, consumption by households. Available at http://www.factfish.com/statistic-country/nigeria/fuelwood,+consumption+by+households.