The Impact of Renewable Energy Consumption and Public Capital Expenditure on Poverty Reduction in Nigeria
DOI:
https://doi.org/10.47747/ijbme.v4i3.1139Keywords:
Renewable Energy Consumption, Public Capital Expenditure, Poverty, Human Development IndexAbstract
Poverty has been an important issue of discussion in underdeveloped countries and has been of crucial concern to many stakeholders across the globe. This article examines the extent to which renewable energy consumption and public capital expenditure impact the poverty rate in Nigeria over the period 2003 - 2019. We employed cointegration and Autoregressive Distributed Lag (ARDL) bounds model for our analysis. Our results revealed that renewable energy consumption significantly escalates poverty in the short run. Public capital expenditure, economic growth, and governance quality substantially reduce Nigeria's poverty. The long-run analysis reveals that renewable energy consumption significantly elevates Nigeria's poverty rate in the long run. Moreso, economic growth and quality of governance reduce the poverty rate substantially, whereas public capital expenditure does not significantly reduce the poverty rate in Nigeria in the long run. The Nigerian government was recommended to adopt modern renewable sources through a public-private partnership and promote good governance, especially in the efficient and appropriate implementation of public capital expenditures.
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References
Adegboyo, O.S. (2020). Does Government Spending reduce Poverty in Nigeria? Evidence from Auto-Regressive Distributed Lag Specification. Ekonomi Bisnis, 25(1), 14-25.
Adu, D. T., & Denkyirah, E. K. (2019). Economic growth and environmental pollution in West Africa: Testing the Environmental Kuznets Curve hypothesis. Kasetsart Journal of Social Sciences, 40(2), 281-288.
Alaali, F., Roberts, J., & Taylor, K. (2015). The effect of energy consumption and human capital on economic growth: an exploration of oil exporting and developed countries. SERPS (Sheffield Economics Research Papers Series), (015).
Asongu, S. A., Iheonu, C. O., & Odo, K. O. (2019). The conditional relationship between renewable energy and environmental quality in sub-Saharan Africa. Environmental Science and Pollution Research, 26(36), 36993-37000.
Balsalobre-Lorente, D., Shahbaz, M., Roubaud, D., & Farhani, S. (2018). How economic growth, renewable electricity and natural resources contribute to CO2 emissions?. Energy policy, 113, 356-367.
Bass, H. H. (2011). Ragnar Nurkse’s development theory: Influences and perceptions. Ragnar Nurkse (1907-2007): Classical development economics and its relevance for today, 183-202.
Bélaïd, F., & Youssef, M. (2017). Environmental degradation, renewable and non-renewable electricity consumption, and economic growth: Assessing the evidence from Algeria. Energy policy, 102, 277-287.
Berkhout, F., Angel, D., & Wieczorek, A. J. (2009). Asian development pathways and sustainable socio-technical regimes. Technological Forecasting and Social Change, 76(2), 218-228.
Berkhout, F., Marcotullio, P., & Hanaoka, T. (2012). Understanding energy transitions. Sustainability Science, 7(2), 109-111.
Bhattacharya, M., Paramati, S. R., Ozturk, I., & Bhattacharya, S. (2016). The effect of renewable energy consumption on economic growth: Evidence from top 38 countries. Applied Energy, 162, 733-741.
Boontome, P., Therdyothin, A. & Chontanawat, J. (2017). Investigating the causal relationship between non-renewable and renewable energy consumption, CO2 emissions and economic growth in Thailand. Energy Procedia, 138, 925-930.
Central Bank of Nigeria. (2019). Central Bank of Nigeria Statistical Bulletin volume 29, Retrieved from www.cenbank/document/statbulletin.aspx
Cherni, A., & Jouini, S. E. (2017). An ARDL approach to the CO2 emissions, renewable energy and economic growth nexus: Tunisian evidence. International Journal of Hydrogen Energy, 42(48), 29056-29066.
Dimnwobi, S. K., Onuoha, F. C., Uzoechina, B. I., Ekesiobi, C. S., & Nwokoye, E. S. (2022). Does public capital expenditure reduce energy poverty? Evidence from Nigeria. International Journal of Energy Sector Management, (ahead-of-print).
Dogan, E. (2016). Analyzing the linkage between renewable and non-renewable energy consumption and economic growth by considering structural break in time-series data. Renewable energy, 99, 1126-1136.
Fan, S., Hazell, P., & Thorat, S. K. (2000). Impact of public expenditure on poverty in rural India. Economic and Political Weekly, 3581-3588.
Great Britain. (2002) DFID - UK Department for International Development. Darfur. [Web Archive] Retrieved from the Library of Congress, https://www.loc.gov/item/lcwaN0012497/.
Gertler, P., Shelef, O., Wolfram, C., & Fuchs, A. (2011). Poverty, growth, and the demand for energy. Energy Institute at Haas Working Paper, 224.
Great Britain. (2002) DFID - UK Department for International Development. Darfur.
Hashim, A. T., Osman, R., & Badioze-Zaman, F. S. (2016). Poverty challenges in education context: a case study of transformation of the mindset of a non-governmental organization. International Journal of Advanced and Applied Sciences, 3(11), 40-46.
Hicks, N., & Streeten, P. (1979). Indicators of development: The search for a basic needs yardstick. World Development, 7(6),567-580.
Hidalgo-Hidalgo, M., & Iturbe-Ormaetxe, I. (2018). Long-run effects of public expenditure on poverty. The Journal of Economic Inequality, 16(1), 1-22.
Jebli, M. B., & Youssef, S. B. (2015). The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia. Renewable and Sustainable Energy Reviews, 47, 173-185.
Jhingan M. L. (2012). The Economics of Development and Planning. (40th Edition), Vrinda Publications.
Joy, J. N., Okafor, M. C., & Ohiorenuan, I. H. (2021a). Impact of public capital expenditure on poverty rate in Nigeria. International Journal Papier Public Review, 2(4), 46-55.
Joy, J. N., Okafor, M. C. & Nmesiriony, J. A. (2021b). Impact of Public Capital Expenditure on Economy Growth of Nigeria. Journal of Asian Multicultural Research for Economy Management Study, 2(4), 1-10.
Kaygusuz, K. (2011). Energy services and energy poverty for sustainable rural development. Renewable and Sustainable Energy Reviews, 15, 936-947.
Kraft, J., & Kraft, A. (1978). On the Relationship between Energy and GNP. Journal of Energy Development, 3, 401-403
Lam, P. T. I., & Law, A. O. K. (2018). Financing for renewable energy projects: A decision guide by developmental stages with case studies. Renewable Sustainable Energy Review, 90, 937–944.
Liu, W., Li, J., & Zhao, R. (2020). Rural public expenditure and poverty alleviation in China: A spatial econometric analysis. Journal of Agricultural Science, 12(6), 46-56.Kanbur, R. (2017). The digital revolution and targeting public expenditure for poverty reduction. Digital Revolutions in Public Finance, 225.
Liu, X., Zhang, S., & Bae, J., (2017). The impact of renewable energy and agriculture on carbons dioxide emissions: Investigating the environmental Kuznets curve in four selected ASEAN countries. Journal of Clean. Prod. 164, 1239-1247.
Lotz, R., & Dogan, E. (2018). The role of renewable versus non-renewable energy to the level of CO2 emissions a panel analysis of sub- Saharan Africa's Βig 10 electricity generators. Renewable Energy, 123, 36-43.
Lupu, D., Petrisor, M. B., Bercu, A., & Tofan, M. (2018). The Impact of Public Expenditures on Economic Growth: A Case Study of Central and Eastern European Countries. Emerging Markets Finance and Trade, Taylor & Francis Journals, 54(3), 552-570.
Maji, I. (2015). Does clean energy contributes to economic growth? Evidence from Nigeria. Energy Reports, 1, 145-150.
Maji, I. (2017). The link between trade openness and deforestation for environmental quality in Nigeria. GeoJournal, 82 (1), 131-138.
Maji, I., Sulaiman, C. & Abdul-Rahim, A. (2019). Renewable energy consumption and economic growth nexus: A fresh evidence from West Africa. Energy Reports, 5, 384-392.
Mathew O. A., Miebaka-Ogan, T., Popoola. O., Olawande, T., Osabohien, R., Urhie, E., Adediran, O., & Ogunbiyi T. (2019). Electricity consumption, government expenditure and sustainable development in Nigeria: A Co-integration Approach. International Journal of Energy Economics and Policy, 9(4), 74-80.
Mehmood, R., & Sadiq, S. (2010). The relationship between government expenditure and poverty: A cointegration analysis. Romanian Journal of Fiscal Policy (RJFP), 1(1), 29-37.
Meikle, S. & Bannister, A. (2003). Energy, Poverty and Sustainable Urban Livelihoods. Working Paper No. 126.
Muritala, T. & Taiwo, A. (2011). Government expenditure and economic development: empirical evidence from Nigeria. European Journal of Business and Management, 3(9), 18-28.
Narayan, S. & Doytch, N. (2017). An investigation of renewable and non-renewable energy consumption and economic growth nexus using industrial and residential energy consumption. Energy Economics, 68, 160-176.
Nguyen, K. H. & Kakinaka, M. (2019). Renewable energy consumption, carbon emissions, and development stages: Some evidence from panel cointegration analysis. Renewable Energy, 132, 1049-1057.
Nurkse R (1953). Problems of Capital Formation in Underdeveloped Countries. Oxford Univ. Press, New York, USA.
Okwanya, I., & Abah, O. A. (2018). Impact of Energy Consumption on Poverty Reduction in Africa. CBN Journal of Applied Statistics, 9 (1), 105-139.
Omodero, C. O. (2019). Government Sectoral Expenditure and Poverty Alleviation in Nigeria. Research in World Economy, 10(1), 80-90.
Ouedraogo, N. S. (2013). Energy consumption and human development: Evidence from a panel cointegration and error correction model. Elsevier, 63, 28-41.
Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Cleaner Production, 187, 770-779.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.
Sarkodie, A. S. & Adams, S. (2018). Renewable energy, nuclear energy, and environmental pollution: Accounting for political institutional quality in South Africa. Science of the Total Environment, 643, 1590-1601.
Silva, P.P., Cerqueira, P.A. & Ogbe, W. (2018). Determinants of renewable energy growth in Sub-Saharan Africa: Evidence from panel ARDL. Energy, 156, 45-54.
Sovacool, B.J. (2012). The Political Economy of Energy Poverty: A Review of Key Challenges. Energy for Sustainable Development, 16(3), 272 – 282.
Sunkanmi, O. A., & Abayomi, O. (2014). Testing public expenditure and poverty reduction Nexus in Nigeria. Developing country studies, 4(6), 116-123.
Udonwa, U. & Praise, U. I. (2018). Government Expenditure and Poverty Alleviation in Nigeria, 1970-2016. North Asian International Research Journal of Social Science & Humanities, 4(3), 241-260.
United Nations Commission on Sustainable Development (2007). Report on the Fifteen Session, Economic and Social Council Official Records, Supplement No. 9.
World Bank (2022) Nigeria poverty assessment 2022: A better Future for all Nigerians. World bank press release no:2022/052/AFW, March 2022 Retrieved from htttps.//www.worldbank.org>news
Adegboyo, O.S. (2020). Does Government Spending reduce Poverty in Nigeria? Evidence from Auto-Regressive Distributed Lag Specification. Ekonomi Bisnis, 25(1), 14-25.
Adu, D. T., & Denkyirah, E. K. (2019). s Economic growth and environmental pollution in West Africa: Testing the Environmental Kuznets Curve hypothesis. Kasetsart Journal of Social Sciences, 40(2), 281-288.
Alaali, F., Roberts, J., & Taylor, K. (2015) The effect of energy consumption and human capital on economic growth: an exploration of oil exporting and developed countries. SERPS (Sheffield Economics Research Papers Series), (015).
Asongu, S. A., Iheonu, C. O., & Odo, K. O. (2019). The conditional relationship between renewable energy and environmental quality in sub-Saharan Africa. Environmental Science and Pollution Research, 26(36), 36993–37000.
Balsalobre-Lorente, D., Shahbaz, M., Roubaud, D., & Farhani, S. (2018). How do economic growth, renewable electricity and natural resources contribute to CO2 emissions? Energy policy, pp. 113, 356–367.
Bass, H. H. (2011). Ragnar Nurkse's development theory: Influences and perceptions. Ragnar Nurkse (1907-2007): Classical development economics and its relevance for today, pp. 183–202.
Bélaïd, F., & Youssef, M. (2017). Environmental degradation, renewable and non-renewable electricity consumption, and economic growth: assessing the evidence from Algeria. Energy policy, 102, 277-287.
Berkhout, F., Angel, D., & Wieczorek, A. J. (2009). Asian development pathways and sustainable socio-technical regimes. Technological Forecasting and Social Change, 76(2), 218-228.
Berkhout, F., Marcotullio, P., & Hanaoka, T. (2012). Understanding energy transitions. Sustainability Science, 7(2), 109-111.
Bhattacharya, M., Paramati, S. R., Ozturk, I., & Bhattacharya, S. (2016). The effect of renewable energy consumption on economic growth: Evidence from top 38 countries. Applied Energy, pp. 162, 733–741.
Boontome, P., Therdyothin, A. & Chontanawat, J. (2017). Investigating the causal relationship between non-renewable and renewable energy consumption, CO2 emissions and economic growth in Thailand. Energy Procedia, 138, 925-930.
Central Bank of Nigeria. (2019). Central Bank of Nigeria Statistical Bulletin volume 29, Retrieved from www.cenbank/document/statbulletin.aspx
Cherni, A., & Jouini, S. E. (2017). An ARDL approach to the CO2 emissions, renewable energy and economic growth nexus: Tunisian evidence. International Journal of Hydrogen Energy, 42(48), 29056-29066.
Dimnwobi, S. K., Onuoha, F. C., Uzoechina, B. I., Ekesiobi, C. S., & Nwokoye, E. S. (2022). Does public capital expenditure reduce energy poverty? Evidence from Nigeria. International Journal of Energy Sector Management, (ahead-of-print).
Dogan, E. (2016). Analyzing the linkage between renewable and non-renewable energy consumption and economic growth by considering a structural break in time-series data. Renewable energy, 99, 1126–1136.
Fan, S., Hazell, P., & Thorat, S. K. (2000). Impact of public expenditure on poverty in rural India. Economic and Political Weekly, 3581-3588.
Great Britain. (2002) DFID - UK Department for International Development. Darfur. [Web Archive] Retrieved from the Library of Congress, https://www.loc.gov/item/lcwaN0012497/.
Gertler, P., Shelef, O., Wolfram, C., & Fuchs, A. (2011). Poverty, growth, and energy demand. Energy Institute at Haas Working Paper, 224.
Great Britain. (2002) DFID - UK Department for International Development. Darfur.
Hashim, A. T., Osman, R., & Badioze-Zaman, F. S. (2016). Poverty challenges in education: a case study of the transformation of the mindset of a non-governmental organization. International Journal of Advanced and Applied Sciences, 3(11), 40-46.
Hicks, N., & Streeten, P. (1979). Indicators of development: The search for a basic needs yardstick. World Development, 7(6),567–580.
Hidalgo-Hidalgo, M., & Iturbe-Ormaetxe, I. (2018). Long-run effects of public expenditure on poverty. The Journal of Economic Inequality, 16(1), 1-22.
Jebli, M. B., & Youssef, S. B. (2015). The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia. Renewable and Sustainable Energy Reviews, 47, 173-185.
Jhingan M. L. (2012). The Economics of Development and Planning. (40th Edition), Vrinda Publications.
Joy, J. N., Okafor, M. C., & Ohiorenuan, I. H. (2021a). Impact of public capital expenditure on the poverty rate in Nigeria. International Journal Papier Public Review, 2(4), 46-55.
Joy, J. N., Okafor, M. C. & Nmesiriony, J. A. (2021b). Impact of Public Capital Expenditure on Economy Growth of Nigeria. Journal of Asian Multicultural Research for Economy Management Study, 2(4), 1-10.
Kaygusuz, K. (2011). Energy services and energy poverty for sustainable rural development. Renewable and Sustainable Energy Reviews, pp. 15, 936–947.
Kraft, J., & Kraft, A. (1978). On the Relationship between Energy and GNP. Journal of Energy Development, 3, 401-403
Lam, P. T. I., & Law, A. O. K. (2018). Financing for renewable energy projects: A decision guide by developmental stages with case studies. Renewable Sustainable Energy Review, 90, 937–944.
Liu, W., Li, J., & Zhao, R. (2020). Rural public expenditure and poverty alleviation in China: A spatial econometric analysis. Journal of Agricultural Science, 12(6), 46–56.Kanbur, R. (2017). The digital revolution and targeting public expenditure for poverty reduction. Digital Revolutions in Public Finance, 225.
Liu, X., Zhang, S., & Bae, J., (2017). The impact of renewable energy and agriculture on carbon dioxide emissions: Investigating the environmental Kuznets curve in four selected ASEAN countries. Journal of Clean. Prod. 164, 1239-1247.
Lotz, R., & Dogan, E. (2018). The role of renewable versus non-renewable energy to the level of CO2 emissions a panel analysis of sub-Saharan Africa's Βig 10 electricity generators. Renewable Energy, 123, 36-43.
Lupu, D., Petrisor, M. B., Bercu, A., & Tofan, M. (2018). The Impact of Public Expenditures on Economic Growth: A Case Study of Central and Eastern European Countries. Emerging Markets Finance and Trade, Taylor & Francis Journals, 54(3), 552-570.
Maji, I. (2015). Does clean energy contribute to economic growth? Evidence from Nigeria. Energy Reports, pp. 1, 145–150.
Maji, I. (2017). The LinkThe link between trade openness and deforestation for environmental quality in Nigeria. GeoJournal, 82 (1), 131–138.
Maji, I., Sulaiman, C. & Abdul-Rahim, A. (2019). Renewable energy consumption and economic growth nexus: A fresh evidence from West Africa. Energy Reports, 5, 384-392.
Mathew O. A., Miebaka-Ogan, T., Popoola. O., Olawande, T., Osabohien, R., Urhie, E., Adediran, O., & Ogunbiyi T. (2019). Electricity consumption, government expenditure and sustainable development in Nigeria: A Co-integration Approach. International Journal of Energy Economics and Policy, 9(4), 74-80.
Mehmood, R., & Sadiq, S. (2010). The relationship was revealed between government expenditure and poverty: A cointegration analysis. Romanian Journal of Fiscal Policy (RJFP), 1(1), 29-37.
Meikle, S. & Bannister, A. (2003). Energy, Poverty and Sustainable Urban Livelihoods. Working Paper No. 126.
Muritala, T. & Taiwo, A. (2011). Government expenditure and economic development: empirical evidence from Nigeria. European Journal of Business and Management, 3(9), 18-28.
Narayan, S. & Doytch, N. (2017). An investigation of renewable and non-renewable energy consumption and economic growth nexus using industrial and residential energy consumption. Energy Economics, 68, 160-176.
Nguyen, K. H. & Kakinaka, M. (2019). Renewable energy consumption, carbon emissions, and development stages: Some evidence from panel cointegration analysis. Renewable Energy, 132, 1049-1057.
Nurkse R (1953). Problems of Capital Formation in Underdeveloped Countries. Oxford Univ. Press, New York, USA.
Okwanya, I., & Abah, O. A. (2018). Impact of energy consumption on poverty reduction in Africa. CBN Journal of Applied Statistics, 9 (1), 105-139.
Omodero, C. O. (2019). Government Sectoral Expenditure and Poverty Alleviation in Nigeria. Research in World Economy, 10(1), 80-90.
Ouedraogo, N. S. (2013). Energy consumption and human development: Evidence from a panel cointegration and error correction model. Elsevier, 63, 28-41.
Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Cleaner Production, pp. 187, 770–779.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.
Sarkodie, A. S. & Adams, S. (2018). Renewable energy, nuclear energy, and environmental pollution: Accounting for political, institutional quality in South Africa. Science of the Total Environment, 643, 1590-1601.
Silva, P.P., Cerqueira, P.A. & Ogbe, W. (2018). Determinants of renewable energy growth in Sub-Saharan Africa: Evidence from panel ARDL. Energy, 156, 45-54.
Sovacool, B.J. (2012). The Political Economy of Energy Poverty: A Review of Key Challenges. Energy for Sustainable Development, 16(3), 272 – 282.
Sunkanmi, O. A., & Abayomi, O. (2014). Testing public expenditure and poverty reduction Nexus in Nigeria. Developing country studies, 4(6), 116-123.
Udonwa, U. & Praise, U. I. (2018). Government Expenditure and Poverty Alleviation in Nigeria, 1970-2016. North Asian International Research Journal of Social Science & Humanities, 4(3), 241–260.
United Nations Commission on Sustainable Development (2007). Report on the Fifteen Session, Economic and Social Council Official Records, Supplement No. 9.
World Bank (2022) Nigeria poverty assessment 2022: A Better Future for all Nigerians. World bank press release no:2022/052/AFW, March 2022 Retrieved from htttps.//www.worldbank.org>news
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