IIARD International Institute of Academic Research and Development

International Journal of Engineering and Modern Technology (IJEMT )

E-ISSN 2504-8848
P-ISSN 2695-2149
VOL. 11 NO. 3 2025
DOI: 10.56201/ijemt.vol.11.no3.

---

The effect of Energy Consumption, Renewable Energy, and Circular Energy on economic growth in Nigeria

Okafor, Joyce Odu

---

Abstract

This study investigates the effect of energy consumption, renewable energy, and circular energy on Nigeria’s economic growth using an ex-post facto research design. Time series data from 2010 to 2023 were sourced from Statista and the Central Bank of Nigeria (CBN) Statistical Bulletin. The study employed various statistical tools, including Descriptive Statistics, Group Unit Root Test, Johansen Cointegration Test, and the Vector Error Correction Model (VECM), with post-analysis tests ensuring model validity. Findings revealed that primary energy consumption had an insignificant positive effect on economic growth due to inefficiencies, transmission losses, and over-reliance on fossil fuels. Total renewable energy capacity also showed a positive but insignificant impact, indicating its potential in driving economic expansion with adequate investment and policy support. However, circular energy exhibited a negative effect, highlighting Nigeria’s underdeveloped recycling capacity and the need for technological advancements. The study concludes that energy plays a vital role in economic growth but requires a diversified and efficient strategy to maximize its benefits. It recommends upgrading energy infrastructure to enhance efficiency, increasing investments in renewable energy through incentives and financing options, and fostering circular energy innovations via policy frameworks, financial incentives, and research development. By addressing these areas, Nigeria can achieve a more sustainable and resilient energy economy.

---

References:

Abubakar, I. R., Da Silva, I., & Pretorius, R. (2024). The role of circular energy in Nigeria’s
sustainable economic growth. Sustainable Development and Energy Transition
Journal, 18(3), 210–235. Available at Google Books
Adebayo, S. T. (2023). The impact of hydropower on Nigeria’s economic growth: A
difference-in-difference approach. Journal of Energy Economics and Policy, 15(2),
122–139.
Ahmad, A. U., Abubakar, A. M., & Muhammad, M. (2025). Sustainable economic horizons:
Integrating green and blue economies, energy strategies to drive Nigeria's growth
potential. Discover Business & Economics, 14(1), 78–105. Available at Springer
Ajiyo, S. T. (2024). Optimization and integration of circular economy principles in housing
construction projects in Lagos, Nigeria. Theseus Journal of Energy Research, 19(1),
56–79. Available at Theseus
Akinyele, T. O., & Ogunleye, O. D. (2022). The Role of Renewable Energy in Nigeria’s
Economic Development: An Ecological Modernization Perspective. Renewable Energy
Studies Journal, 12(1), 55-78.
Aldhaen, E. S. (2024). The impact of energy consumption on economic growth in Nigeria: An
econometric analysis. Energy Policy and Economic Studies, 19(1), 45–78. Available at
Google Books
Bello, M. A., & Olanrewaju, K. F. (2023). Circular Energy and Waste-to-Energy Strategies for
Sustainable Development in Nigeria. Journal of Environmental Sustainability, 15(2),
102-119.
Biala, M. I., Adeniyi, T. A., & Yusuf, Y. T. (2024). Revisiting the environmental Kuznets
relation in Nigeria: An empirical study of economic and environmental trends. Journal
of Economics and Allied Research, 9(4), 347–365. Available at ResearchGate
Bilyaminu, A. M., Rene, E. R., Pandey, A., & Babel, S. (2024). Industrial symbiosis and eco-
industrial transformation opportunities for environmental protection in Nigeria.
Sustainable Production and Consumption, 22(3), 78–101. Available at ScienceDirect
Egbuna, P. C., & Mba, A. K. (2023). Renewable energy and rural development in Nigeria:
Impacts on agriculture and small industries. African Journal of Sustainable
Development, 14(4), 188–205.
Ekwoaba, J. O., & Ekwoaba, D. I. (2025). Underprivileged conditions influencing youths'
participation in sports for future employment. International Journal of Business and
Technology, 21(2), 112–130. Available at UNIMAP
Gebrezgabher, S. A., Onabolu, B., Taron, A., & Cofie, O. O. (2024). Investment climate for
circular economy enterprises in Nigeria: Firm-level insights. CGIAR Energy Reports,
21(2), 99–123. Available at CGIAR
Golagha, O., Ogolo, O., Idogun, B. O., & Bello, Q. Z. (2024). Sustainable gas utilization:
Integrating natural gas into the circular economy for environmental stewardship. SPE
Nigeria Annual Technical Conference Proceedings, 24(1), 78–103. Available at
OnePetro
Hajer, M. (1995). The Politics of Environmental Discourse: Ecological Modernization and the
Policy Process. Oxford University Press.
Michael, V. A., & Olayemi, O. D. (2025). Time series forecast of Nigeria's electricity using an
auto-regressive integrated moving average (ARIMA) model. Journal of Institutional
Research and Business Development, 18(2), 145–172. Available at University Journals
Mol, A. P. J., & Spaargaren, G. (2000). Ecological Modernization Theory in Debate: A Review.
Environmental Politics, 9(1), 17-49.
Oke, P. K., & Igbalajobi, O. D. (2024). The development of pest scaring mechanism for rice
plantation in Nigeria: A solar-powered approach. Journal of Engineering Research and
Applications, 18(2), 99–120. Available at JournalERAS
Okoro, T. P., & Adejumo, K. M. (2024). The economic viability of solar energy in Nigeria: A
cost-benefit analysis. Journal of Renewable Energy Policy and Innovation, 20(2), 134–
Olayemi, S. A. (2021). Energy Consumption and Economic Growth: An Empirical Analysis
of Nigeria. International Journal of Energy Economics and Policy, 11(4), 67-82.
Olowo, A. B., & Fasanya, H. O. (2023). Examining the relationship between energy
consumption and economic output in Nigeria: A sectoral analysis. Journal of Industrial
and Commercial Economics, 22(1), 90–112.
Olubiyi, E. A., Adedeji, A. O., & Suleiman, S. (2025). Energy consumption, foreign direct
investment, and urban development: The cases of Nigeria and South Africa. Journal of
Black Political Economy, 20(1), 67–92. Available at SAGE Journals
Onungwe, I., Hunt, D. V. L., & Jefferson, I. (2024). Transitioning towards a circular economy
through municipal solid waste analysis and characterization using SowaCLINK
software. Frontiers in Sustainability, 15(1), 77–96. Available at Frontiers
Pearce, D., & Turner, R. K. (1989). Economics of Natural Resources and the Environment.
Johns Hopkins University Press.
Rahman, M. J., Rana, T., & Zhu, H. (2025). Determinants of environmental accounting
disclosure quality of listed chemical manufacturing companies in China. Carbon
Accounting for Sustainable Development, 22(3), 203–226. Available at Google Books
Sayigh, A. (2024). Transition towards a carbon-free future: Renewable energy advancements.
Springer Energy & Environment Studies, 26(2), 150–185. Available at Springer
Sharma, S. K., Upadhyay, R. K., & Kumar, V. (2024). Dynamics of energy transition and
economic development in Nigeria: A computable general equilibrium model analysis.
Journal of Energy and Environmental Studies, 16(3), 156–190. Available at Springer
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal
of Economics, 70(1), 65-94.
Suleman, S., Nawaz, F., Kayani, U., Aysan, A. F., & Tunç, H. (2025). Drivers of trade market
behavior effect on renewable energy consumption: A study of MINT (Mexico,
Indonesia, Nigeria, and Turkey) economies. Discover Business & Economics, 18(1),
156–180. Available at Springer
Swan, T. W. (1956). Economic Growth and Capital Accumulation. Economic Record, 32(2),
334-361.
Umana, A. U., Garba, B. M. P., & Ologun, A. (2024). Renewable energy and economic growth
nexus in Nigeria: A Granger causality analysis. World Journal of Advanced Research
and Reviews, 25(1), 50–89. Available at WJARR
Yusuf, O. M., Adewale, P. J., & Nwankwo, J. L. (2023). Circular economy and waste-to-energy
technologies in Nigeria: Economic implications and policy recommendations. African
Journal of Environmental and Energy Research, 18(2), 67–98.

DOWNLOAD PDF

---

Back