BIJED

Abstract

This study examined the long-term economic multiplier effects of energy investments on Nigeria's economic growth. The study specifically focussed on economic growth and job creation. Using an Autoregressive Distributed Lag (ARDL) model, the research analyses the relationship between energy investments and economic growth, utilizing secondary data from 1990 to 2023. This approach is distinctive as it enables the exploration of both short-term and long-term dynamics between energy investments and economic growth, addressing a gap in the existing literature where such comprehensive modelling has not been employed. The results show that energy investment significantly boosts economic growth in both the short and long term, highlighting the importance of energy infrastructure development for sustained economic expansion. Employment also positively influences economic growth, emphasizing its role in inclusive development. However, energy consumption has a negative impact on long-term growth, pointing to inefficiencies in Nigeria's energy sector. The error correction term indicates that economic deviations from equilibrium correct themselves within a year, underscoring the stability of the energy-investment-growth relationship. Hence, based on these findings, the study recommends that the Nigerian government prioritize energy infrastructure investment, enhance energy policies, and implement job creation-focused energy projects to improve energy security and foster sustained economic development.