Examining the relationship between electricity consumption and economic growth in Uganda
Thesis (M.Phil)--Stellenbosch University, 2015.
ENGLISH ABSTRACT: This study examined the causal relationship between electricity consumption and economic growth in Uganda during the period 1960–2014. Inasmuch as there have been similar studies done on the African continent on this relationship, none has been done in Uganda. The objectives of the study were threefold: 1) to estimate the short--run and long--run relationship between electricity consumption and economic growth in Uganda; 2) to examine the direction of the causal relationship; and 3) to propose policies to guide future decision making of government. To achieve these objectives, the study adopted the Auto Regressive Distributed Lag bounds approach in analysing the level of relationship. In addition, the study used the pairwise Granger Causality testing procedures to determine the direction of causation between the study variables. Results from the study indicated that there is a valid long-run level relationship between electricity consumption and economic growth. In addition, the pairwise Granger causality tests indicated that the relationship is unidirectional, running from electricity consumption to economic growth. Overall, the study found that energy consumption spurs economic growth in Uganda. The government should fast-track and consolidate interventions in electricity generation with the view of sustaining the long-run electricity demand and consumption in Uganda. In the short run, investments to improve energy efficiency and reduce losses should make more electricity available for consumption.
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