Energy Resources, Investment Channels and Economic Growth
Danmola Rasaq Akonji *
Department of Economics, Lagos State University, Ojo, Lagos, Nigeria.
Atoyebi Kehinde Olusegun
Department of Economics, Lagos State University, Ojo, Lagos, Nigeria.
Ologban Folashade Oluwayemisi
Lagos State University of Education, Oto-Ijanikin, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
The research investigated whether energy resources increase the possibility for investment promotion and how they affect economic growth. In other words, the article explored whether energy could be used to support economic growth in Nigeria through investment. The analysis utilized secondary source of data from the World Bank's Development Indicators. The variables employed in the study included; Gross Domestic Product (GDP) being the dependent variable, Gross Fixed Capital Formation (GFCF), Foreign Direct Investment (FDI), Electricity and Natural Gas Rent (ENGR) and Openness (OPEN) spanning through 1980-2021. The methodology used in this study was dependent on the type of data collected and whose analysis was econometric in nature. The study performed a pre-estimation test via Ordinary Least Squares, and it was found that the result cannot be used for policy purposes due to some of the inherent problems associated with the estimation. This problem includes auto-correlation issues, multi-collinearity and others. This further propelled the study to conduct a post estimation test using the ADF statistics and the ARDL techniques of estimation and afterwards, the results showed a short run and long run impact of explanatory variables on economic growth. The study therefore recommended that the government should provide an enabling environment that will attract foreign direct investment, stimulate trade openness and also boost economic growth in Nigeria.
Keywords: Energy resources, foreign direct investments, auto-regressive distributed lag