The Role of Renewable Energy Investment in Sustainable Economic Development in Nigeria

This study assessed the impact of renewable energy investment on sustainable economic development in Nigeria. Sustainable economic development was measured by the growth rate of gross domestic product, while renewable energy was proxied by solar, wind, and biomass. Data on these variables for the period 1990 to 2023 were analysed using the Augmented Dickey-Fuller unit root test, Johansen Cointegration test and the Error Correction Model approach. The unit root test result reveal that all the variables became stationary at first difference. The Johansen Cointgration test also reveal the presence of long run relationship among the variables. Findings from the ECM estimates show that investment in solar energy has a considerable positive impact on the growth of Nigeria’s gross domestic product, while investment in wind energy has an insignificant positive impact on the growth of Nigeria’s gross domestic product. The study also disclosed that investment in biomass has a non-negligible positive influence on the growth of gross domestic product in Nigeria. Based on these findings, the study concludes that investment in renewable energy contributes positively to sustainable economic development in Nigeria, and recommends that the Nigerian government should prioritize solar energy investment by creating favourable policies that attract both local and international investors, and as well, encourage collaboration among stakeholders in the agricultural, environmental, and energy sectors to develop a structured biomass energy policy that focus on converting agricultural waste into energy, thereby promoting environmental sustainability while contributing to economic development.