Aggregate Energy Consumption and Sectoral Output in Nigeria

Abstract

This study examined nexus between aggregate energy consumption and sectoral output in Nigeria for the period spanning 1980 to 2010. Utilizing a bi-variate Vector Auto-regressive (VAR) model, the study observed bi-directional causality between aggregate energy consumption and agricultural output while a unidirectional causality was found from service output to aggregate energy consumption. The concluded that the nexus between energy consumption and output of individual sectors of the economy are different and therefore recommended sector specific energy policies rather the one fit-for-all policy. Also, energy conservation policies would be harmful to the productive activities of agricultural and service sectors of the Nigerian economy.