Abstract:

The monetary policy framework is one of the influencing factors of the economy. The monetary policy influences the energy sector like all other sectors of the economy. Thus, the impact of monetary policy on sustainable energy financing in Nigeria was investigated in this study. The study used annual time series data spanning 1985 to 2019. The Auto-regressive distribution lag model was applied to evaluate the variables in the short run. Additional diagnostic tests were performed to determine the model's fitness, including the Heteroskedasticity Test, Normality Test, and the Model Stability Test. The finding shows that domestic credit to the private sector has a favorable and significant impact on Gross Domestic Product on energy use. The dependent variable was negatively impacted by the broad money supply, which also was statistically significant. The other variables were positive, but they had no significant impact on Gross Domestic Product per unit of energy used. Thus, the study recommends that the apex bank improve its monetary policy measures to control the money supply required for potential energy sector investment. This will enhance and contribute to economic growth and development.