Empirical Analysis of Satellite-Derived Economic Activity Indicators and Their Validity for Nigerian District Planning

Satellite-derived indicators including nighttime light intensity and land cover change have been proposed as proxies for economic activity in data-sparse environments, and empirically validating their accuracy against ground-truth measures for Nigerian district planning is an important methodological research priority. This study empirically assessed the validity of VIIRS nighttime light intensity and Sentinel-2 derived settlement expansion indices as proxies for district-level economic activity in 48 Local Government Areas across six Nigerian states (one per geopolitical zone). NBS consumption expenditure and employment data from the 2019 General Household Survey were used as ground-truth economic activity measures. Pearson correlation, spatial regression, and cross-validation were applied. Nighttime light intensity showed strong correlation with formal employment density (r = 0.74, p < 0.001) but weak correlation with informal economy activity (r = 0.29), confirming its limitation in predominantly informal Nigerian district economies. Settlement expansion index showed better alignment with consumption expenditure in the North West zone (r = 0.68) than in the South South zone (r = 0.41), likely reflecting differences in urban form. Combined multi-indicator regression achieved higher predictive accuracy (R-squared = 0.71) than single-indicator models. The study fills a methodological gap in the validation of satellite economic proxies for Nigerian planning contexts and recommends a multi-indicator composite approach, validation against updated NBS Living Standards Survey data, and caution in using single-indicator nighttime light measures for North West and North Central LGAs. Keywords: satellite economic indicators, nighttime lights, Nigerian district planning, economic proxies, remote sensing validation