The relationship between electricity consumption and economic growth in Botswana

Abstract

Concerted effort to diversify Botswana economy, in recent years, has seen increased activity of major sectors, which includes higher reliance on electricity. The demand and consumption of electricity within the Botswana economy increased substantially from the 1980’s. However there have been shortfalls in the country’s electricity generation capacity causing increased reliance on imports from neighbouring countries especially South Africa. Given the importance of electricity in Botswana, this study examined the relationship between electricity and economic growth, employing bounds testing approach to co-integration. Results obtained confirmed the importance of electricity for Botswana’s economic growth. The result also passed a battery of diagnostic tests. This study recommends the need for energy policy reforms that will enable increased electricity production capacity.

Electricity Consumption in Botswana:the Role of Financial Development, Industrialisation and Urbanization

“…This implies that, ceteris paribus, a 1% increase in economic growth raises electricity demand by 0.4%. This finding is consistent with that of Komal and Abbas (2015), Altinay and Karagol(2005), Shahbaz and Lean (2012), Aqeel and Butt(2001) as well as Adebola (2011) and Amusa and Leshoro(2013) for the case of Botswana. In the same manner, the coefficient of financial development, ,is also positive and statistically significant at 10% level of significance and it implies that, holding other things constant, a 1% increase in domestic credit to the private sector (financial development) spurs electricity demand directly or indirectly by about 0.1%.…”

“…This resulted in a partial neglect of other potential energy sources such as diesel and solar for power generation. Moreover, climate change impacts such as chronic droughts resulting from semi-arid climate 9 Note that this was based on initial parameters and the 2001 population census. 10 The SAPP is a cooperation of the national electricity companies in Southern Africa under the auspices of the Southern African Development Community (SADC).…”

“…This is because apart from improving energy demand in the economy (see Karanfil, 2009;Shahbaz and Lean, 2012). However, the studies that examined energy(or electricity) demand in Botswana namely; Adebola(2011), Amusa and Leshoro(2013), Essah and Efetotse(2014), Efetotse et.al (2015),have not considered how urbanization, industrialization and financial development affect energy(or electricity) demand in Botswana.This calls for more scholarly attention in identifying the factors influencing energy (or more specifically electricity) demand in Botswana in order to guide Government of Botswana, policy makers and other stakeholders in energy sector in the design of effective energy policy to address increasing energy demand in Botswana. Therefore, this paper seeks to understand the key determinants behind the growth of electricity consumption in Botswana by taking into account the role of financial development, industrialisation and urbanization in Botswana's energy-growth nexus.…”

Relationship between Economic Growth and Electricity Consumption in India: A Re-Investigation

“…Some studies focus on the relationship between electricity consumption and economic growth for a single country. A few of those studies are Amusa and Leshoro (2013) for Botswana, Atif and Siddiqi (2010) for Pakistan, Khobai, Abel, and Le Roux (2016) for South Africa, Shahbaz, Sbia, Hamdi, and Ozturk (2014) for United Arab Emirates, Ogundipe and Apata (2013) and Chindo, Abdulrahim, Waziri, Huong, and Ahmad (2015) The study of Bruns, Gross, and Stern (2014) comprises a full sample of 72 individual empirical studies having 574 growth causes energy statistics and 564 energy causes growth statistics and a meta-analysis is conducted. The results reveal that when energy price is a controlled variable then there is a genuine effect from output to energy use, whereas it seems valid from energy to output when employment is controlled.…”

Energy Consumption and Economic Growth: A Trivariate Framework of South Africa

“…It entails that energy consumption and economic growth are interrelated. Studies that support feedback or bidirectional causality include Masih and Masih (1997) for Pakistan; Jumbe (2004) for Malawi; Belloumi (2009) for Tunisia; Zhang (2011) for Russia; Amusa and Leshoro (2013) for Botswana. Second, the conservation hypothesis refers to a state in which a unidirectional causality runs from economic growth to energy consumption.…”