IMPROVING TRANSMISSION AND DISTRIBUTION INFRASTRUCTURE TO REDUCE ELECTRICITY LOSS AND BOOST GDP IN NIGERIA

Abstract

This study examines the impact of electricity loss on the economic growth of Nigeria from the
period 1981 to 2020. The study employs a Vector Autoregressive (VAR) model to estimate the effects of
electricity loss, electricity demand, and electricity supplied from hydropower on the Gross Domestic Product
(GDP) of the country. The results of the study reveal that electricity loss has a negative impact on the GDP,
while electricity demand has a positive impact on GDP, and electricity supplied from hydropower negatively
affects GDP. However, the study finds that there is no causal relationship between electricity loss, electricity
demand, and electricity supply, and GDP in Nigeria. The study recommends a deliberate policy to stimulate
investment in the transmission and distribution infrastructure to reduce electricity losses in the country. The
study highlights the different forms of electricity losses, which can be technical or non-technical, and
categorizes them into transmission and distribution losses. The study suggests that decreasing electricity losses
leads to an increase in GDP through an increase in distribution company revenue and an increase in the
quantity of electricity reaching the end-users.