Asian Basic and Applied Research Journal

In this study, we examined the effect of energy consumption on sectoral performance in Nigeria using time series data obtained for the period 1980 to 2019. Three sectors of the economy-agriculture, industry and the services sectors were considered. Applying Autoregressive Distributed Lag (ARDL) technique on the variables, we found cointegrating evidences for industrial and the services sectors and cannot conclude cointegration for the agricultural sector. Further empirical evidences showed that energy consumption produces heterogeneous effects on sectoral performances in Nigeria. The energy consumption mix of the industrial sector in Nigeria all together produces short run positive growth effect of approximately 46 percent within the immediate time while in the services sector, energy consumption mix of the sector only produced mixed outcome that mostly retard the sector’s productivity generally. However, from our causality analysis we adjudged that most of the productivity strength of the sectors in Nigeria were energy consumption led productivity. Our conclusion is in tandem with the recent preposition in energy development literatures of the energy-led growth link. Our study suggests that sectoral non-cointegration may be mostly structural as in the case of the agricultural sector. We provide evidence-based recommendations for strengthening energy consumption-sectoral performances in Nigeria including asymmetric considerations in energy policy discuss to drive optimum sector productivity in the economy.