Dynamics of Residential Electricity Consumption in Nigeria

The continuous residential electricity supply problems in Nigeria are attributable to the inability of energy planners to accurately forecast the effect of the various socio-economic and physical factors that influence residential electricity consumption across the country. The major problem with the existing forecasts of electricity consumption is often assumed to be associated with poor identification of these socio-economic and physical factors upon which they are based. The goal of this study is to empirically determine the various factors that affect the residential electricity consumption rate in Nigeria. The study covers an annual time series data from 1985 to 2016. Data for the study was collected through secondary sources. Multiple Linear Regression was used to test the research hypothesis. The result suggests that residential electricity consumption was significantly related to the eight of the nine socio-economic and physical factors of this consumption rate studied at 0.01 level (R2 = 0.92). These are per capita income, degree of urbanization, population density, Number of households per capita, Price of Kerosene, number of households with electricity, Temperature, and employment rate. These eight variables are significantly in determining the residential electricity consumption in Nigeria. Policies based on the outcome of this study will produce positive and sound policy actions.