Energy Investment and Industrial Growth in Nigeria

This study examined the impact of energy investment on industrial growth in Nigeria from 1990 to 2025. Total Energy Investment, Government Energy Infrastructure Supply, Renewable Energy Investment, and Private Sector Energy Investment were used as proxies for energy investment, while Manufacturing Value Added served as a measure of industrial growth. Data were sourced from the International Energy Agency (IEA) and the World Bank’s World Development Indicators (WDI, 2025) and analyzed using the Augmented Dickey-Fuller unit root test and the Autoregressive Distributed Lag (ARDL) approach. The bounds test confirmed the existence of a long-run relationship between energy investment and industrial growth. Empirical results indicated that total energy investment has a positive and statistically significant effect on manufacturing value added. Conversely, government energy infrastructure supply exhibited a negative but significant relationship, while renewable energy investment and private sector energy investment showed positive but statistically insignificant effects on manufacturing value added. These findings suggest that overall energy investment plays a crucial role in enhancing industrial performance in Nigeria. Based on the results, it is recommended that the Federal Ministry of Power intensify initiatives to expand energy investment through strategic public–private partnerships and infrastructure development. Such measures would ensure a reliable and efficient power supply, thereby boosting productivity and output within the manufacturing sector and fostering sustainable industrial growth.