Gas Flaring, Energy Consumption and Economic Growth in Nigeria: Evidence from VECM Granger Causality Analysis

Abstract

This study examined the causal link among gas flaring, energy consumption and economic 
growth in Nigeria. Annual time-series data covering 1984–2024 were sourced from the World 
Bank Development Indicators, the Central Bank of Nigeria, EIA International Energy 
Statistics, and the OPEC Annual Statistical Bulletin. The study employed the Vector Error 
Correction Model-based Granger causality/block exogeneity Wald test after confirming that 
the variables were integrated of order one and cointegrated. The findings revealed that 
macroeconomic, energy and oil-sector variables jointly Granger-cause gas flaring in the 
short run. Specifically, the value of crude oil production positively and significantly 
influences gas flaring, while crude oil production quantity negatively affects economic 
growth. The results suggest that gas flaring is not merely an environmental problem but also 
an energy-waste and economic-efficiency issue. The study recommends stronger regulation 
of gas flaring, investment in gas-utilisation infrastructure, and the expansion of gas-to-power 
projects in Nigeria.