UGWU ONYINYECHUKWU PAULA

This study investigates the impact of infrastructure investment, with a specific focus on the electrical sector, on industrial production in Nigeria from 1981 to 2021. Utilizing an Error Correction Model (ECM), the research examines both short-term and long-term dynamics between infrastructure development and macroeconomic outcomes. The findings reveal that increased investment in electricity infrastructure significantly boosts industrial production, underscoring the crucial role of enhancing electricity generation, transmission, and distribution. A positive relationship between electricity generated and industrial output further highlights the importance of expanding electricity generation capacity. Conversely, electricity consumption shows an unexpected negative, albeit statistically insignificant, relationship with industrial production, indicating the need for optimizing consumption patterns. The study also finds that higher interest rates positively influence industrial output, while the impact of consumer price index changes remains statistically insignificant. These results emphasize the necessity for policies that prioritize electricity infrastructure investment, promote energy efficiency, and support regulatory reforms to foster sustainable industrial growth in Nigeria.