The structural effect of energy policy and industrial output in Nigeria

For the purpose of making energy available for consumption and as bye product for productive activities, the government of Nigeria formulated a comprehensive energy policy. The integrated policy captures policies non-renewable energy in the form of Oil, Gas, Electricity and Coal. This study therefore, examined the structural effect of the energy policy on industrial output in Nigeria between 1980 and 2013. Dummy variable regression technique was used to analyze data on energy consumption (Oil, Gas, Electricity and Coal) and Industrial output in Nigeria. A dummy variable was introduced to capture the period before energy policy in 2003 and the period of energy policy from 2003 in Nigeria. The sample paired t test was used to analyze the significance of the energy policy on industrial output in Nigeria. The result revealed that energy policy has significant influence on industrial output in Nigeria. Strong evidence of structural instability on industrial sector output in Nigeria was observed. Further evidence showed that the structural instability was attributed to the energy consumption variable in the model.