Analysis of the Economic and Technical Determinants of Electricity Supply in Nigeria

Electricity supply is among the key factors driving economic growth and development in any country. Over the year electricity generation, transmission and distribution have witnessed serious setbacks in Nigeria due to structural rigidities, policy inconsistencies and technical inefficiencies. The study seeks to assess the economic and technical determinants of electricity generation in Nigeria using data spanning from1981 to 2021 and vector autoregressive (VAR) model. The study used electricity generation per megawatt (EG) electricity power loss (EPL), government funding on electricity (GFE) and annual population growth (APG) as variables of interest. The findings of the short-run vector autoregressive model result revealed that there exists a positive link between the lag values of EG and it current values. EPL impacted negatively on EG while GFE co-move with EG in Nigeria. Impliedly, Nigeria’s capacity to generate electricity in the short-run depends on the both the technical and economic drivers, and these drivers may have negative and positive influence given the structure of the Nigerian economy. Therefore, the study recommends that Nigerian government should give more emphasis on electricity generation to raise the level of economic activities. Also, government should take some proactive measures to technically reduce the amount of electric power loss during the transmission and distribution process as it affect the country's capacity to generate the desired electricity