This paper investigates disaggregate energy supply and industrial output growth in Nigeria using time series data from 1981-2014. Nigeria persistent energy crisis has weakened the industrialisation process despite the country is endowed with various energy resources, gap between the demand and supply of energy still remained a critical challenge. Data were sourced from the Central Bank of Nigeria, Statistical Bulletin and the National Bureau of Statistics. The study employed Ordinary Least Square method, Granger Causality and Johansen Co-integration test to carry out the empirical analysis. The findings show that electricity generated and premium motor spirit have a positive impact on industrial output growth in Nigeria but with high cost of production. Government capital expenditure signed positive, while gas consumption and automated gas oil (diesel) have negative signs from the result. This result implies that the availability of Liquefied Natural Gas in Nigeria has not contributed significantly to the industrial performance while the negative sign of automated gas oil signifies increase in it price which had increase cost of production and consequently reduce the industrial output. The unidirectional causality of Granger Causality test runs from gas consumption, electricity generated to industrial output growth. In view of the findings, it has been observed that, irregular electricity supply has been a major bane to output growth in the manufacturing sector; therefore, it is recommended that the power sector by means of guided private sector initiative should be given more attention for the growth of the nation's economy. |