Effect of Financial Access and Efficiency on Renewable Energy Expenditure in Nigeria

This study examines the effect of financial access and efficiency on the expenditure on renewable energy in Nigeria. This study adopts ex-post facto research design because the data for the study is already stored in the data base of World Development Indicator (WDI) which cannot be altered by any researcher. The population of the study comprises of data from the Nigerian economic factor which includes financial development index relationship to financial access and efficiency as well as the expenditure on renewable energy which are biomass, hydro, wind and solar technologies. The sample period that is adopted is from 1988 to 2023 (35 years). The data collected was analysed using Autoregressive Distributed Lag Estimation Techniques for data analysis. The findings of this study reveals that there is a short run relationship between the dependent and the independent variables. However, the long run test result shows that the coefficients of the specifications estimated using ARDL approach and based on the results, financial access (0.9581) has a positive relationship with the dependent variable but is insignificant due to its p-value (0.5823) being greater than 5% respectively while financial efficiency (-4.5956) has a negative relationship with the dependent variable with an insignificant p-value (0.1999) because it is also greater that than 5%. In the light of the findings this study recommends that strengthen Financial Access through Targeted Policy Reforms. Although financial access has a positive relationship with renewable energy expenditure, its insignificance suggests that existing financial products may not adequately serve renewable energy investors and improve Financial Efficiency to Facilitate Renewable Energy Investments. Financial institutions should streamline their processes, reduce bureaucratic bottlenecks, and lower transaction costs related to renewable energy financing.