Empirical Analysis of the Relationship Between Electricity Access and Economic Growth in North Central Nigeria

The causal relationship between electricity access and economic growth has been extensively debated in the development economics literature, yet state-level empirical evidence from Nigeria's North Central geopolitical zone, where electrification rates vary widely across states, remains thin and methodologically heterogeneous. This study empirically analyses the relationship between electricity access and economic growth across the seven states of North Central Nigeria, covering Benue, Kogi, Kwara, Nasarawa, Niger, Plateau, and the Federal Capital Territory, using panel data spanning 2010 to 2023. State-level electricity consumption, grid access rates, and mini-grid and off-grid electrification data were assembled from the Nigerian Electricity Regulatory Commission and Rural Electrification Agency. Economic growth is proxied by state gross domestic product estimates from the National Bureau of Statistics and business registration data from the Corporate Affairs Commission. A fixed-effects panel data regression model with instrumental variables is employed to address endogeneity between energy access and economic activity. Granger causality tests are applied to examine the directionality of the energy-growth relationship. Results confirm a statistically significant positive effect of electricity access on economic growth, with an estimated elasticity of 0.31, implying that a 10 percent increase in access rates is associated with a 3.1 percent increase in state gross domestic product. The effect is larger in rural areas and among non-farm microenterprises. Keywords: electricity access, economic growth, North Central Nigeria, panel data, energy-growth nexus.