Effect of the Natural Gas Industry on Economic Growth of Nigeria
- Post by: ams
- April 27, 2024
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Ngwu, R. N.*, Ofoegbu G. N. & Ezugwu, C. I.
Abstract
This research work sought to explore the effect of natural gas industry on economic growth of Nigeria. The peculiar aim of this study includes to: (i) ascertain the effect of natural gas production on the economic growth of Nigeria and (ii) verify the effect of natural gas flaring on the economic growth of Nigeria. The hypotheses were stated in line with the objectives. The study adopted ex-post facto research design and statistical technique- multiple linear regression models. Panel data for twenty-three years (1999- 2021) were collected from the Nigerian National Petroleum Corporation annual statistical bulletin. The Augmented Dickey-Fuller test was employed, and other diagnostic tests conducted. The findings from the regression analysis examining the impact of natural gas production, natural gas flaring and other relevant factors on economic growth in Nigeria reveal several significant insights. Firstly, the regression coefficients indicate that natural gas production has a strong positive effect on economic growth, while natural gas flaring has a detrimental impact. The positive coefficient associated with natural gas production implies that an increase in natural gas production is associated with higher levels of economic growth. Conversely, the negative coefficient linked to natural gas flaring indicates that higher levels of flaring are associated with reduced economic growth. It suggests that policies aimed at promoting increased natural gas production could contribute positively to Nigeria’s economic growth agenda. Measures to reduce flaring and promote cleaner energy technologies not only contribute to environmental sustainability but also have the potential to enhance economic productivity and resilience. However, it recommended needful coordinated efforts from government, industry, and civil society to implement effective policies, invest in infrastructure and technology, and promote responsible resource management practices.
Keywords: Natural Gas Industry; Natural Gas Production; Gas Flaring; Economic Growth; Sustainability