IMPACT OF ENERGY CONSUMPTION ON ECONOMIC GROWTH IN AFRICAN LOW-INCOME ECONOMIES

Abstract

This study investigates the impact of energy consumption on economic growth in fifteen (15) low-income African economies (Burkina Faso, Burundi, Chad, Democratic Republic of Congo, Gambia, Guinea, Guinea-Bissau, Madagascar, Mali, Niger, Rwanda, Sierra Leone, Tanzania, Togo, Uganda). Employing data spanning from 2003 to 2022, the study utilises the pooled mean group (PMG) estimator. The findings indicate a positive long-term impact of energy consumption on economic growth in these economies. Likewise, the causality results suggest that economic growth causes changes in energy consumption and vice versa. Consequently, the study concludes that the relationship between energy consumption and economic growth holds considerable significance in these economies. Based on these findings, it is recommended that policymakers in these economies should adopt strategies that promote energy efficiency and sustainable energy sources to foster economic development. Additionally, initiatives focusing on economic growth should consider their potential impact on energy consumption patterns. By adopting a holistic and integrated approach, policymakers can effectively address the intricate relationship between energy consumption and economic growth to enhance the overall well-being of these economies.