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Energy consumption, prices and economic growth in three SSA countries: A comparative study

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  • Odhiambo, Nicholas M.

Abstract

In this paper we examine the causal relationship between energy consumption and economic growth in three sub-Saharan African countries, namely South Africa, Kenya and Congo (DRC). We incorporate prices as an intermittent variable in a bivariate setting between energy consumption and economic growth--thereby creating a simple trivariate framework. Using the ARDL-bounds testing procedure, we find that the causality between energy consumption and economic growth varies significantly across the countries under study. The results show that for South Africa and Kenya there is a unidirectional causal flow from energy consumption to economic growth. However, for Congo (DRC) it is economic growth that drives energy consumption. These findings have important policy implications insofar as energy conservation policies are concerned. In the case of Congo (DRC), for example, the implementation of energy conservation policies may not significantly affect economic growth because the country's economy is not entirely energy dependent. However, for South Africa and Kenya there is a need for more energy supply augmentations in order to cope with the long-run energy demand. In the short-run, however, the two countries should explore more efficient and cost-effective sources of energy in order to address the energy dependency problem.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 38 (2010)
Issue (Month): 5 (May)
Pages: 2463-2469

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Handle: RePEc:eee:enepol:v:38:y:2010:i:5:p:2463-2469

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Keywords: Sub-Saharan Africa Energy consumption Economic growth;

References

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Citations

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Cited by:
  1. Menegaki, Angeliki N., 2014. "On energy consumption and GDP studies; A meta-analysis of the last two decades," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 31-36.
  2. Shahateet, Mohammed, 2014. "Modeling Economic Growth and Energy Consumption in Arab Countries: Cointegration and Causality Analysis," MPRA Paper 57304, University Library of Munich, Germany.
  3. Fuinhas, José Alberto & Marques, António Cardoso, 2013. "Rentierism, energy and economic growth: The case of Algeria and Egypt (1965–2010)," Energy Policy, Elsevier, vol. 62(C), pages 1165-1171.
  4. Bukhari M.S. Sillah & Hamad M.H. Al-Sheikh, 2012. "Income, Price, and Government Expenditure Elasticities of Oil in the Gulf Cooperation Council Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 333-341.
  5. Lin, Boqiang & Ouyang, Xiaoling, 2014. "Electricity demand and conservation potential in the Chinese nonmetallic mineral products industry," Energy Policy, Elsevier, vol. 68(C), pages 243-253.
  6. Suganthi, L. & Samuel, Anand A., 2012. "Energy models for demand forecasting—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1223-1240.
  7. Yousef Elyasi & Mohammad Rahimi, 2012. "The Causality between Government Revenue and Government Expenditure in Iran," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 5(1), pages 129-145, April.
  8. Eyup DOGAN, 2014. "Energy Consumption and Economic Growth: Evidence from Low-Income Countries in Sub-Saharan Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 154-162.
  9. Nicholas Odhiambo, 2014. "Energy Dependence in Developing Countries: Does the Level of Income Matter?," Atlantic Economic Journal, International Atlantic Economic Society, vol. 42(1), pages 65-77, March.
  10. Phiri, Andrew & Nyoni, Botha, 2014. "The electricity-growth nexus in South Africa: Evidence from asymmetric co-integration and co-feature analysis," MPRA Paper 56145, University Library of Munich, Germany.
  11. Jude C. Eggoh & Chrysost Bangaké & Christophe Rault, 2011. "Energy Consumption and Economic Growth Revisited in African Countries," CESifo Working Paper Series 3590, CESifo Group Munich.
  12. Kumar, Ronald Ravinesh & Kumar, Radika, 2013. "Effects of energy consumption on per worker output: A study of Kenya and South Africa," Energy Policy, Elsevier, vol. 62(C), pages 1187-1193.
  13. Fuinhas, José Alberto & Marques, António Cardoso, 2012. "Energy consumption and economic growth nexus in Portugal, Italy, Greece, Spain and Turkey: An ARDL bounds test approach (1965–2009)," Energy Economics, Elsevier, vol. 34(2), pages 511-517.
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