- Title
- The relationship between economic growth and electricity consumption in South Africa
- Creator
- Mabinya, Buyiswa Yoliswa
- Subject
- Energy consumption -- Economic aspects -- South Africa
- Date Issued
- 2020
- Date
- 2020
- Type
- Thesis
- Type
- Masters
- Type
- MPhil
- Identifier
- http://hdl.handle.net/10948/48753
- Identifier
- vital:41068
- Description
- In recent years, the relationship between electricity consumption and economic growth has been examined extensively in numerous countries. While there is high consensus in the scientific sphere on the interdependence between electricity consumption and economic growth, recent literature suggests that there are still competing views on the causal relationship between the two variables. Energy has long been viewed as a vital driving force for economies. However, the crucial role that the energy sector has played during the industrial revolution allowed some authors to consider energy in the same way as the capital and labor factors in the production function. The energy factor is considered essential today in the process of development. Almost everyone agrees on the importance of its contribution to the process of growth and development by considering growth / energy model as an indicator of wealth and a vector to reduce social inequalities. Meanwhile, according to the different scenarios observed, energy consumption may or may not have impacts on economic growth or wealth creation. The problem of access to energy (electricity) in certain regions in Africa (and particularly in South Africa) remains one of the major challenges that require urgent attention over the coming decades. In addition, the lack of consensus among researchers has triggered a shift towards focusing on study methods and techniques used for investigations on the energy-growth nexus. Using R programming for data analysis, this study investigates the asymmetric relationship between energy consumption and economic growth in South Africa by incorporating the following intermediary variables: trade openness, capital and labour. Results suggest that a conservation hypothesis is the most prevailing theory on the causal link between GDP and Energy Consumption in South Africa. This opinion is acknowledged as the growth-led electricity consumption opinion. From an economic perspective, evidence from the research suggests that, without necessarily expanding energy accessibility, trade liberalisation and capital could generate clear gains to South Africa and efforts to promote and accelerate these initiatives should be encouraged. Given the often-competing resource limitation challenges faced by the South African government, as a result of prioritisation, trade liberalisation should be favoured and be given roughly in the range of 1.5 times more attention than capital. Therefore, South Africa may not necessarily need electricity for its economic growth. Although energy consumption has a major influence on economic growth, the latter could also possibly be achieved by increasing trade and/or capital, without any change in energy consumption. Energy conservation policies could be executed with little or no hostile effects on economic growth. As a policy intervention, the research study recommends sustained efforts to strengthen regional integration with the view to achieving trade liberalisation, increasing capital formation and creating greater synergy for economic growth.
- Format
- xii, 71 leaves
- Format
- Publisher
- Nelson Mandela Metropolitan University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela Metropolitan University
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