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Electricity Revenue and Tariff Growth in Malawi

Author

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  • Themba G. Chirwa

    (Department of Monitoring, Evaluation and Economics, Millennium Challenge Account - Malawi, Lilongwe, Malawi)

Abstract

In 2011, the Millennium Challenge Corporation, a Washington Based Aid Agency, signed a Compact agreement with the Malawi Government to implement a number of interventions in the power subsector; one of which was power sector reforms. Given that one of the key interventions under the reforms relate to improving the creditworthiness of the existing utility company by advocating for improved financial position (revenue and tariff growth); understanding what drives or impedes power utility growth is important, both in the short- and long-run. The empirical results show that electricity tariffs, electricity generated, and power sector reforms drive revenue growth; while the system losses and inflation impedes revenue growth in the short-run. However, in the long-run, the results show that electricity tariffs and electricity generated drive revenue growth; while system losses and power sector reforms impede revenue growth in the long-run. In terms of tariff growth, the study results show that inflation, real exchange rate (RER) depreciation, electricity revenues, and system losses drive tariff growth; while electricity generated impedes tariff growth in the short-run. However, the long-run results reveal that RER depreciation, revenue growth, and system losses, drive electricity tariff growth; while electricity generated impedes the tariff growth

Suggested Citation

  • Themba G. Chirwa, 2016. "Electricity Revenue and Tariff Growth in Malawi," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 183-194.
    • Handle: RePEc:eco:journ2:2016-02-5
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    References listed on IDEAS

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    Cited by:

    1. Chirwa, Themba, 2016. "Interpreting sustainable development goals for 2030: implications for Malawi," MPRA Paper 84192, University Library of Munich, Germany.
    2. Hugo Brise o & Omar Rojas, 2020. "Factors Associated with Electricity Theft in Mexico," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 250-254.
    3. Hugo Brise o & Omar Rojas, 2020. "Factors Associated with Electricity Losses: A Panel Data Perspective," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 281-286.
    4. Hugo Brise o & Jessica Rubiano & Rodolfo Garc a & Omar Rojas, 2021. "Factors Associated with Electricity Losses in Colombia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 465-470.

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    More about this item

    Keywords

    Malawi; Determinants of Utility Growth; Autoregressive Distributed Lag Models; Power Sector Reforms;
    All these keywords.

    JEL classification:

    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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