Investigating the Causal Relationship between Energy Consumption and Economic Growth in Nigeria

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 CO 2 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.