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Energy Consumption in Ghana and the Story of Economic Growth, Industrialization, Trade Openness and Urbanization

Author

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  • Paul Adjei Kwakwa
  • Solomon Aboagye

Abstract

Energy has become increasingly very essential for the growth and development of every nation. However, in Ghana there is a shortfall of energy supply amidst growing demand. Using data from the World Bank Indicators, the study therefore investigates the impact of growth, industrialization, urbanization and trade openness on the energy consumption in Ghana. A Johansen cointegration test shows a long-run relationship exist among all the variables. In the short run, trade openness reduces energy consumption, while income and industrialization increases consumption. The coefficient of urbanization was found to be positive though was not significant. In the long-run trade openness and urbanization increased energy consumption while income reduces energy consumption. The error correction term shows an average or moderate speed of adjustment implying that after a shock from previous year; approximately 50% of the disequilibria from the previous year’s shock converge back to the long-run equilibrium in the current year. Conclusions and policy recommendations are provided.

Suggested Citation

  • Paul Adjei Kwakwa & Solomon Aboagye, 2014. "Energy Consumption in Ghana and the Story of Economic Growth, Industrialization, Trade Openness and Urbanization," Asian Bulletin of Energy Economics and Technology, Asian Online Journal Publishing Group, vol. 1(1), pages 1-6.
  • Handle: RePEc:aoj:abeeat:v:1:y:2014:i:1:p:1-6:id:713
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    Cited by:

    1. Kwakwa, Paul Adjei, 2015. "An investigation into the determinants of hydropower generation in Ghana," MPRA Paper 68033, University Library of Munich, Germany.
    2. Kwakwa, Paul Adjei & Alhassan, Hamdiyah & Adu, George, 2018. "Effect of natural resources extraction on energy consumption and carbon dioxide emission in Ghana," MPRA Paper 85401, University Library of Munich, Germany.

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