IMPACT OF ELECTRICITY POWER OUTAGE ON MANUFACTURING PERFORMSANCE IN NIGERIA: A TIME SERIES APPROACH (1985 – 2022)

Abstract

The study aimed at investigating the impact of electricity outage on manufacturing firms in Nigeria. Based on the annual data covering the period 1985 – 2022, unit root (ADF) test was carried out. The stationary property of the variables at different significance levels i.e. at level and first difference I(0) and I(1) necessitate the use of ARDL model and granger causality analysis. The result of the autoregressive distributed lag (ARDL) model revealed that electricity consumption (ELC) and electricity generation (ELG) has a negative and significant impact, while labor employment (LEP) and gross capital formation was found have positive (significant) and negative (insignificant) impact on the manufacturing performance in Nigeria in the short run. In addition, the causality analysis revealed uni-directional causality telling how manufacturing performance is immensely affected by electricity power outage in Nigeria. Thus, it was recommended that an adequate supply of electricity is not only crucial for the growth of the manufacturing sector but also for the overall economic development of the country, paving way for rapid economic advancement, and enabling Nigeria to realize its full potential.