Authors : Inalegwu Akpo Edeh; Dr. Kunle Sofolabo; Aleruchi Boniface Orji

Volume/Issue : Volume 10 - 2025, Issue 2 - February

Google Scholar : https://tinyurl.com/ym84szrx

Scribd : https://tinyurl.com/kyf9v8bb

DOI : https://doi.org/10.5281/zenodo.14937071

Abstract : This study investigates the non-linear relationship between natural gas production and Nigeria’s economic growth, with industrial output and foreign direct investment (FDI) as moderating factors. Using the Autoregressive Distributed Lag (ARDL) model, the study analyzes time-series data from 2000 to 2022, with GDP as the dependent variable and natural gas production as the key explanatory variable. Industrial output and FDI are incorporated to assess their interactions with gas production and their impact on economic performance. Grounded in the resource-based theory, endogenous growth theory, and the Dutch Disease Hypothesis, the study reveals a long-run equilibrium among the variables. While gas production positively influences GDP, its impact weakens at higher levels without sufficient industrial integration and strategic FDI inflows. Short-run dynamics suggest industrial output and FDI enhance growth, but their interaction with gas production exhibits diminishing returns. Policy recommendations emphasize expanding gas-to- industry infrastructure, reforming regulatory frameworks to promote domestic utilization, and investing in energy transmission to improve industrial efficiency. Fostering research and development (R&D) in gas-based industries can drive innovation, mitigate diminishing returns, and enhance Nigeria’s industrial competitiveness for sustainable economic growth.

Keywords : Natural Gas Production, Economic Growth, Industrial Output, FDI, ARDL Model, Non-Linear Effects.

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