Economic Growth Effects of Energy Infrastructure and Human Capital in a Resource-Rich Nation: Accounting for the Moderating Role of Oil Price Uncertainty

Despite being richly endowed with array of non-renewable and renewable energy resources, including oil, coal, gas, solar, wind, and water, Nigeria still faces severe energy crises and weak economic growth. This study explores the impact of energy infrastructure and human capital on economic growth, incorporating the moderating effect of oil price uncertainty. Using annual time series data from 1996 to 2022, the analysis employs Fully Modified Ordinary Least Squares (FMOLS) and Canonical Cointegration Regression (CCR) techniques. The findings from both models indicate that energy infrastructure and human capital have a positive and statistically significant influence on economic growth. Additionally, the FMOLS results reveal a negative and statistically significant coefficient for oil price uncertainty. However, the inclusion of the interaction term yields a positive and significant coefficient across the models, indicating that energy infrastructure investment can partially offset the negative impact of oil price volatility. These findings are confirmed by the results of dynamic Autoregressive Distributed Lag (ARDL). The study therefore recommends the diversification of the energy sector by increasing the share of renewable energy in the total energy mix and improving the quality of education and health, as well as upgrading the work force.