Infrastructure as a Moderator of Electricity Supply on Manufacturing Value Added in Nigeria
Abstract
The performance of the Nigerian Manufacturing Value Added has been below its expected potential. This is commonly linked with the problem of insufficient electricity supplies in the country. At the same time, how far the condition of infrastructure affects this relationship requires further research in empirical studies. This paper analyses the moderation role of infrastructure on the link between the electricity supply and manufacturing sector performance (MVA) in Nigeria between 1990 and 2022. The data for time series were collected from World Bank Development Indicators produced by the World Bank, Central Bank of Nigeria Statistical Bulletin, and National Bureau of Statistics. The ARDL bounds testing approach is used in the paper, which is supplemented with the interaction effect of electricity and infrastructure. The results showed that electricity had a statistically significant positive influence on MVA, but its impact was highly conditioned by the quality of the prevailing infrastructure in terms of its development. In particular, the development of transport infrastructure, telecommunications, and logistic infrastructure greatly increased the effect of the impact of electricity on MVA. It has been established that there is infrastructure-dependent benefit from investment in electricity in the Nigerian manufacturing industry. This is especially significant for the development of Industrialisation under the National Development Plan of Nigeria 2021-2025.