Analysis of the Nexus between Natural Gas Consumption and Economic Growth in Nigeria (1981-2019)

Abstract

The study examines the nexus between natural gas consumption and economic growth in Nigeria. The research is conducted using annual time series data running from 1981 to 2019. The paper employs autoregressive distributive lag model (ARDL) as the estimation technique. The variables studied are Real Gross Domestic Product (RGDP), Natural Gas Consumption (NGC) and Oil Price (OP).The results of the analysis shows that natural gas consumption had negative and significant relationship on RGDP on the long run and it is insignificant in the short run because it is a derived demand, while oil price had a positive and significant relationship on the dependent variable both on the short run and the long run. Based on the empirical outcomes of the result obtained, the following recommendations are offered: There is room for massive investment in the oil and gas sector especially in infrastructures with the aim of increasing natural gas consumption through its availability, accessibility and affordability most especially in the rural areas where it is less consumed and also urban areas.