Measuring Energy Efficiency in Nigeria: Energy Intensity and Energy-GDP Elasticity Approach

Abstract

Energy intensity and energy-GDP both measure efficiency in the energy usage of an economy but most studies, as discussed in the literature, concentrated on the effect of energy consumption on economic growth in Nigeria. The need to measure the efficiency of energy consumption in Nigeria cannot be overemphasized. This study employed secondary data on energy consumption and economic growth in Nigeria sourced from International Energy Agency (IEA) and Central Bank of Nigeria's statistical bulletin. It adopted a descriptive analysis using trends and chats, and the results show that energy efficiency in Nigeria has been on the decrease within the understudy period. It was also found that the major proportion of energy consumed in Nigeria goes to the household. By implication, most energy consumed is not on productive purposes and this does not propel economic growth. The study recommends that while appreciating the importance of industrial activities on economic growth, policies that boost industrial activities such as those made towards ensuring credit availability, friendly industrial climate and protection of domestic industries should be formulated and implemented; policies on import substitution and tax relief stimulates industrial activities and increases the demand for energy for productive activities, while feedback industrial policies should be encouraged by promoting the agricultural sector performances with the aim of creating a backward-linkage between this sector and Nigeria's industrial sector.