Natural Gas Consumption in Africa: The Connection Between Gas, Electricity, Residential, Industrial Consumptions and Economic Growth
OCHEME Frederick Thomas
Emerald Energy Institute, University of Port Harcourt, PMB 5323, Port Harcourt, Rivers State, Nigeria.
OSOKOGWU, Uche
Department of Petroleum Engineering, University of Port Harcourt, PMB 5323, Port Harcourt, Rivers State, Nigeria.
JOSEPH, Andy *
Emerald Energy Institute, University of Port Harcourt, PMB 5323, Port Harcourt, Rivers State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This research examines the connection between Residential and Industrial Natural Gas Consumption, Electricity Consumption from Gas, and economic development in Nigeria, Egypt, Algeria, and Equatorial Guinea. Secondary data sources obtained from the Nigerian Bureau of Statistics, BP statistical bulletin, Index Mundi, and World Data Atlas were utilized for this study. The analysis employs a range of econometric techniques such as descriptive statistics, unit root tests, cointegration tests, and ARDL-ECM to examine the impact of these factors on Africa's economic growth. The findings indicate that overall natural gas consumption has a minimal and statistically insignificant impact on GDP. Similarly, electricity consumption shows a positive but insignificant correlation with GDP in the region. Conversely, industrial gas consumption demonstrates a negative and significant relationship with GDP, while residential gas consumption exhibits a strong positive correlation with GDP. The study concludes that gas consumption in industrial and residential sectors significantly affects economic growth in the selected African countries. However, total natural gas consumption and gas used for electricity generation do not significantly influence economic growth in these nations. To maximize the potential of natural gas, this study recommends that the leadership of Nigeria, Egypt, Algeria, and Equatorial Guinea should implement automation for the production, distribution, and consumption of natural gas. This will ensure accurate accountability and proper management of the revenue generated from its sales. To promote electricity generation, distribution, and transmission, they should contemplate subsidizing these costs for their citizens. This will incentivize the production of goods and services, thereby revitalizing economic growth. For increased residential consumption, they should continue to supply more natural gas for residential purposes given that it significantly promotes their economic growth. For natural gas consumed for industrial purposes, the governments of the selected African countries should consider reducing the amount of gas supplied to them since it substantially retards economic growth.
Keywords: Natural gas, electricity, residential, consumption and economic growth