This study examines the link between Nigeria’s economic growth and energy consumption from 1981 to 2024. The analysis validates a long-term equilibrium between consumption of energy, GDP, and associated variables using Granger causality tests, impulse response functions, the Vector Error Correction Model (VECM), and Johansen cointegration. The findings indicate that increase is largely driven by crude oil consumption, with coal playing a modest contribution and electricity having lag effects. Although growing CO2 emissions draw attention to sustainability issues, economic growth and energy consumption show bi-directional causality, highlighting a feedback link. The study suggests increasing efficiency, bolstering capital formation, shifting Nigeria’s energy mix towards renewable sources, and incorporating environmental regulations into growth plans.
Cite this paper
Aleshinloye, M. F. (2026). Investigating the Causal Relationship between Energy Consumption and Economic Growth in Nigeria. Open Access Library Journal, 13, e14430. doi: http://dx.doi.org/10.4236/oalib.1114430.
Abid, M. (2015) The Close Relationship between Informal Economic Growth and Carbon Emissions in Tunisia since 1980: The (Ir)relevance of Structural Breaks. Sustainable Cities and Society, 15, 11-21. https://doi.org/10.1016/j.scs.2014.11.001
Acheampong, A.O. (2018) Economic Growth, CO2 Emissions and Energy Consumption: What Causes What and Where? Energy Economics, 74, 677-692. https://doi.org/10.1016/j.eneco.2018.07.022
Akbostancı, E., Türüt-Aşık, S. and Tunç, G.İ. (2009) The Relationship between Income and Environment in Turkey: Is There an Environmental Kuznets Curve? Energy Policy, 37, 861-867. https://doi.org/10.1016/j.enpol.2008.09.088
Antonakakis, N., Chatziantoniou, I. and Filis, G. (2017) Energy Consumption, CO2 Emissions, and Economic Growth: An Ethical Dilemma. Renewable and Sustainable Energy Re-views, 68, 808-824. https://doi.org/10.1016/j.rser.2016.09.105
Bano, S., Zhao, Y., Ahmad, A., Wang, S. and Liu, Y. (2018) Identifying the Impacts of Human Capital on Carbon Emissions in Pakistan. Journal of Cleaner Production, 183, 1082-1092. https://doi.org/10.1016/j.jclepro.2018.02.008
Afaha, J.S. and Agbede, S.A. (2025) Energy Consumption, Prices and Economic Growth in Nigeria: Autoregressive Distributed Lag Model Analysis. Annals of Management and Organization Re-search, 6, 385-404. https://doi.org/10.35912/amor.v6i4.2191
Yusuf, L., Abdul-lahi, M.M. and Halliru, A.M. (2024) Impact of Economic Growth and Renewable Energy Consumption on CO2 Emissions in Nigeria. UMYUK Journal of Economics and Development (UJED), 1, 135-146.
Usman, A.B., Usman, F.K., Sa’ad, S., Omaye, S.O. and Idris, M. (2025) The Relationship between Energy Transi-tion, Economic Growth, and Carbon Emission in Nigeria. International Journal of Research and Innovation in Social Science, IX, 3871-3879. https://doi.org/10.47772/ijriss.2025.907000313
Mirza, F.M. and Kan-wal, A. (2017) Energy Consumption, Carbon Emissions and Economic Growth in Pakistan: Dynamic Causality Analysis. Renewable and Sustainable Energy Re-views, 72, 1233-1240. https://doi.org/10.1016/j.rser.2016.10.081
Ashakah, F.O. (2025) Im-pact of Energy Consumption on Economic Growth in Nigeria: An ARDL Estima-tion Approach. Jalingo Journal of Social and Management Sciences, 6, 254-266.
Goshit, G.G. (2022) Impact of Renewable Energy Consumption on Economic Growth in Nigeria. International Journal of Economics & Develop-ment Policy, 5, 153-168.
Ajah, N., Nzeribe, I., Okeyika, E. and Nwokoye, O. (2024) Energy Consumption and Economic Growth in Nigeria: VECM Analysis. Nigerian Journal of Energy & Environmental Economics, 15, 16-33.
Pao, H. and Chen, C. (2019) Decoupling Strategies: CO2 Emissions, Energy Re-sources, and Economic Growth in the Group of Twenty. Journal of Cleaner Pro-duction, 206, 907-919. https://doi.org/10.1016/j.jclepro.2018.09.190
Le, T. and Quah, E. (2018) Income Level and the Emissions, Energy, and Growth Nexus: Evidence from Asia and the Pacific. International Economics, 156, 193-205. https://doi.org/10.1016/j.inteco.2018.03.002
Yang, G., Sun, T., Wang, J. and Li, X. (2015) Modeling the Nexus between Carbon Dioxide Emissions and Economic Growth. Energy Policy, 86, 104-117. https://doi.org/10.1016/j.enpol.2015.06.031
Efayena, O.O., Olele, E.H. and Buzugbe, N.P. (2022) Energy Consumption and Economic Growth Nexus in Africa: New Insights from Emerging Economies. Theoretical and Applied Eco-nomics, 29, 185-196.
Iormom, B.I., Jato, T.P., Ishola, A. and Diyoke, K. (2025) Economic Policy Uncertainty, Institutional Quality, and Renewable En-ergy Transitioning in Nigeria. Energy Research Letters, 7, 1-6.
Mikayilov, J.I., Galeotti, M. and Hasanov, F.J. (2018) The Impact of Economic Growth on CO2 Emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. https://doi.org/10.1016/j.jclepro.2018.06.269
Xu, B. and Lin, B. (2015) How Industrialization and Urbanization Process Impacts on CO2 Emissions in China: Evidence from Nonparametric Additive Regression Models. Energy Eco-nomics, 48, 188-202. https://doi.org/10.1016/j.eneco.2015.01.005
Zhu, H., Duan, L., Guo, Y. and Yu, K. (2016) The Effects of FDI, Economic Growth and Energy Consumption on Carbon Emissions in ASEAN-5: Evidence from Panel Quantile Regression. Economic Modelling, 58, 237-248. https://doi.org/10.1016/j.econmod.2016.05.003
Das, T. and Chakraborty, D. (2024) Effect of Energy Consumption on Economic Growth and Sustainability: Panel Evidence from PCSE and FGLS. Economics and Policy of Energy and the Environment, 2, 37-53. https://doi.org/10.3280/efe2024-002002
Pal, D. and Mitra, S.K. (2017) The Environmental Kuznets Curve for Carbon Dioxide in India and China: Growth and Pollution at Crossroad. Journal of Policy Modeling, 39, 371-385. https://doi.org/10.1016/j.jpolmod.2017.03.005
Anwar, A., Sarwar, S., Amin, W. and Arshed, N. (2019) Agricultural Practices and Quality of Environ-ment: Evidence for Global Perspective. Environmental Science and Pollution Research, 26, 15617-15630. https://doi.org/10.1007/s11356-019-04957-x
Hussian, A.E.M. (2018) The Role of Microalgae in Renewable Energy Production: Challenges and Op-portunities. In: Türkoğlu, M., Önal, U. and Ismen, A., Eds., Marine Ecolo-gy—Biotic and Abiotic Interactions, InTech, 257. https://doi.org/10.5772/intechopen.73573
Johansen, S. (1988) Statisti-cal Analysis of Cointegration Vectors. Journal of Economic Dynamics and Con-trol, 12, 231-254. https://doi.org/10.1016/0165-1889(88)90041-3
Ahmad, N., Du, L., Lu, J., Wang, J., Li, H. and Hashmi, M.Z. (2017) Modelling the CO2 Emissions and Economic Growth in Croatia: Is There Any Environmental Kuznets Curve? Energy, 123, 164-172. https://doi.org/10.1016/j.energy.2016.12.106
Yeh, J. and Liao, C. (2017) Impact of Population and Economic Growth on Carbon Emissions in Taiwan Region Using an Analytic Tool Stirpat. Sustainable Environment Re-search, 27, 41-48. https://doi.org/10.1016/j.serj.2016.10.001
Demena, B.A. and Afesorgbor, S.K. (2020) The Effect of FDI on Environmental Emissions: Evidence from a Meta-Analysis. Energy Policy, 138, Article ID: 111192. https://doi.org/10.1016/j.enpol.2019.111192
Narayan, P.K., Saboori, B. and Soleymani, A. (2016) Economic Growth and Carbon Emissions. Economic Modelling, 53, 388-397. https://doi.org/10.1016/j.econmod.2015.10.027
Okorie, D.I. and Syl-vester, M.A. (2016) Electricity Consumption and Economic Growth: The Nigeri-an Case. International Journal of Current Research, 8, 12. https://ssrn.com/abstract=3003553
Chen, P., Chen, S., Hsu, C. and Chen, C. (2016) Modeling the Global Relationships among Economic Growth, Energy Consumption and CO2 Emissions. Renewable and Sustainable Energy Reviews, 65, 420-431. https://doi.org/10.1016/j.rser.2016.06.074
