Optimizing Energy Consumption for Sustainable Development in Nigeria: A Data-Driven Analysis

Abstract

This study examined the dynamic relationship between energy consumption and sustainable development in Nigeria. Utilizing annual data from 1990 to 2024, the analysis applied structural equation modelling of the form of Seemingly Unrelated Regression model and other econometric framework involving ARDL bounds testing, ADF unit root test, and Toda Yamamoto Granger causality to explore short- and long - run interdependencies. The findings revealed that a 1% increase in total energy consumption and renewable energy usage enhances electricity access by 26% and 0.26%, respectively. However, infrastructure inefficiencies – such as transmission losses and supply instability reduce access by 3.73%, exposing critical systemic weaknesses. Cointegration tests confirmed the existence of a long run equilibrium between energy variables and sustainable development, while causality results identified economic growth as a key driver of energy demand. The study underscores the need for urgent policy interventions to modernize grid infrastructure, expand renewable energy capacity, and strengthen regulatory enforcement.