Impact of Nigerian gas production on electricity generation in Nigeria: An advanced econometric analysis (2009–2024)

Abstract

Nigeria remains one of Africa’s largest producers of natural gas, yet continues to experience chronic electricity shortages. This study expands on existing work by rigorously assessing the impact of natural gas production on electricity generation from (2009-2024) using advance econometric approaches. Secondary data from Nigerian national petroleum corporation (NNPC), Central bank of Nigeria (CBN), and the international energy agency (IEA) were analyzed using descriptive statistics, correlation analysis, ordinary least square (OLS), Augmented Dickey-fuller (ADF) unit root tests, Johansen cointegration tests, Durbin-Watson, Breusch-Pagan heteroskedasticity test, and model diagnosis. The results show an exceptionally strong positive correlation (r=0.937). Regression output indicates that gas production significantly predicts electricity generation (β = 0.754; p < 0.001), explaining 87.9% of its variation (R² = 0.879). ADF tests reveal that both variables are I(1), and the Johansen test confirms cointegration, indicating a long-run equilibrium relationship. Diagnostic shows absence of multicollinearity and acceptable model adequacy. The study concludes that increased gas production directly and significantly enhances electricity generation; however, infrastructural bottlenecks, gas flaring, low investment and pipeline vandalism continue to hinder optimal performance. Policy recommendations emphasize improved gas-to-gas production infrastructure, cost-reflective pricing, and diversification of generation resources.