Dynamic panel modelling of electricity consumption and Economic Community of West African States (ECOWAS)

• Author: Sagir Adamu,Nasiru Inuwa,Muhammad Bello Sani,Abubakar Mohammed Saidu
• Published date: 01 December 2019
• DOI: http://doi.org/10.1111/opec.12150
• Date: 01 December 2019

Dynamic panel modelling of electricity

consumption and economic growth in

Economic Community of West African

States (ECOWAS)

Nasiru Inuwa*, Sagir Adamu**, Abubakar Mohammed Saidu* and

Muhammad Bello Sani*

*Department of Economics, Faculty of Arts and Social Sciences, Gombe State University, P.M.B 127,

Gombe, Nigeria. Emails: ninuwa@yahoo.com; abubakarmsaidu@yahoo.com;

muhammadbellosani@gmail.com

**Department of Economics, Faculty of Social and Management Sciences, Bauchi State University Gadau,

Bauchi, Nigeria. Email: sagiryana11@yahoo.co m

Abstract

The effect of electricity consumption on economic growth of the Economic Community of West

African States (ECOWAS) Member Countries has been examined during the period 2007–2016.

The study applied both static and dynamic panel models in the form of Fixed-Effect, Random-

Effect, Difference GMM and System GMM. The results revealed that electricity consumption has

a positive and statistically significant impact on economic growth for both static and dynamic

panel models. Capital has also been found to have impacted positively and significantly on

economic growth in both models. Similarly, labour showed a positive and significant impact on

economic growth system GMM model only. Since the study supports electricity consumption led-

growth hypothesis, therefore, it is recommended that ECOWAS countries should explore other

alternative sources of electricity generation in order to ensure sufficient and reliable supply of

electricity. This can be achieved at individual country level by utilising the potentials of renewable

endowments such as biomass, biofuels and solar energy available to each country. Equally, the

regional efforts to establish West African Power Pool (WAPP) and West African Gas Pipeline

(WAGP) in order to increase the supply as well as grid reliability should be strengthened.

1. Introduction

Although it has been widely acknowledged that provision of affordable and sustainable

electricity services are not only necessary but also sufficient conditions in production and

consumption of goods and services which in turn stimulates economic growth and

development of any economy in the World.But, most of the countries in West Africa have

suffered from limited access to electric power and endemic electricity shortages

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