Time Series Forecast of Nigeria’s Electricity Using Auto-Regressive Integrated Moving Average (Arima) Model

Abstract

Electricity generation and consumption in Nigeria play a pivotal role in driving economic growth and improving the quality of life for its citizens. Despite significant energy resources, the country faces challenges such as inconsistent power supply, inadequate infrastructure, and a growing demand for electricity due to population and economic expansion. Addressing these challenges requires sustainable energy strategies to bridge the gap between electricity generation and consumption while supporting the nation's development goals. This study aims to investigate time series data of Nigeria’s Electricity consumption variables. The data was collected from Our World in Data on electricity generation (in TWh) and GDP per capita having a coverage of 33 years (1990-2023). Autoregressive Integrated Moving Average (ARIMA) model was used to analyze the data. The result fitted ARIMA (1,1,1), (1,1,2), (1,0,2) and all the results revealed that at 5% level of significance, all the parameters of the model proved to be adequate. The result of the forecast also reveals that there is an increase in electricity consumption with a significant positive correlation between electricity generation and GDP per capita. Therefore, it is recommended that the government and private sector collaborate to develop strategies for sustainable electricity generation and distribution, with a focus on renewable energy sources, to ensure a stable and efficient energy supply that supports economic growth and development in Nigeria.