SOCIO-ECONOMIC IMPACTS OF ENERGY EFFICIENCY, PRICING DYNAMICS, AND ENERGY ACCESS ON HOUSEHOLD POVERTY ALLEVIATION IN NIGERIA.

Abstract

This study investigates the socio-economic impacts of energy efficiency, pricing dynamics, and energy access on household poverty alleviation in Nigeria. The research adopts an ex post facto research design, using secondary data from 1986 to 2022 sourced from the Central Bank of Nigeria and the National Bureau of Statistics. The study employs the Autoregressive Distributed Lag (ARDL) model to analyze both short-run dynamics and long-run equilibrium relationships among the variables. The findings reveal that improvements in energy efficiency have a significant negative effect on poverty, confirming the Energy-Led Growth Hypothesis, which suggests that higher energy efficiency reduces household energy costs and enhances welfare. In contrast, rising energy prices exacerbate poverty, supporting the Welfare Economics Theory, which highlights the negative impact of inflation and high living costs on the poor. Additionally, education and urbanization are found to play significant roles in poverty reduction, while government expenditure and household consumption expenditure show limited short-term impacts. The study concludes that a multifaceted approach to poverty alleviation, integrating energy efficiency improvements with policies that enhance education, employment, and infrastructure development, is essential for sustainable poverty reduction in Nigeria. Therefore, the study recommends enhancing energy efficiency, implementing targeted energy subsidies, promoting education, investing in urban infrastructure, and strengthening government spending on poverty reduction programs.