Electricity Generation and National Development in Nigeria: The Perspective of Auto-Regression Distribution Lag (ARDL) Bond Test Analysis

Electricity generation is an enormous challenge facing African largest and most populous economy as it affects national and socioeconomic development of the Nigerian state. Electricity is regarded as a propelling force behind economic activities, rural /community development and viewed as an economic tool for maintaining and expanding capital stock, poverty alleviation and production capacity of an economy. Most existing studies on electricity and national development relationships on Nigerian economy mainly concentrated on electricity consumption and not electricity generation. Besides, their findings were inconclusive. Therefore, this study examined the relationship between electricity generation and national development Nigeria from the period of 1981 – 2016. The study employed Auto regression distributed lag (ARDL) bound test which was found to be the most appropriate to establish the short-run and long-run relationship since there was fractionally integrated variables. That is, variables at different level of integration (but not at I (2) level). The study revealed that electricity generation negatively affected national development both in the long and short run periods. The consequence of electricity generation effects on national development was negative; thus, it served as a disincentive to productivity, economic activity and national development, also, lack of adequate generation capacity have significantly impacted on the cost of living, production, doing business in Nigeria and even the cost of governance. The study concluded that electricity generation has significantly impacted negatively on productivity and national development of the Nigerian economy over the years. The policy implication of these findings is that electricity generation sufficiency drive of the Nigerian government has to be geared up, continued to be investment friendly and electricity generation mix should be adopted by way of having more varieties of electricity energy generation sources that can actuate industrialization, enhance the desired national development for the Nigerian economy in the nearest future.