1. No category

Energy Demand, Productivity Growth and Economic Growth in Oil
producing African countries
Ishmael Ackah , University of Portsmouth, Ishmael.ackah@myport.ac.uk Supervisor:Dr Renatas Kizys
Introduction
Energy is the convertible currency of
modern development. This is because energy
facilitates production, transportation and
communication .
 Despite these benefits, only 31% of the
population of Sub-Saharan African have access
to modern forms of energy.
Figure 1. A child studying with lantern
This study builds on the paper by Hunt Productivity is estimated in a Hicksian growth accounting
et al (2003) by estimating productivity
InA  InYt  InKt  InLt
separately from the stochastic trend. The
Following Hunt et al (2003), the structural time series
study seeks to:
model proceed as:
Estimate the effect of economic and
non-economic factors on renewable and
t
y t
p
t
A t
it
t
non-renewable energy demand.
e is energy demand, p is price, y is income, A is
Productivity, and is  the stochastic trend
 Examine the causal relation between
energy demand and economic growth
e   y   p   A    
Results
Energy Demand
Table 1. STSM output (short run)
Nigeria
Figure 2. energy demand
R
Source: Economist, November 18th, 2013
18
Productivity 0.003
17
Income
16
Price
for
investment
0.005
Ghana
NR
R
-3.242
----
3.04
0.095
NR
Algeria
R
South Africa
NR
R
NR
-4.136 1.341
0.866
---
0.587
0.582
0.682
1.308
0.964
3.004
in
energy
Changes in income have more effect on
energy demand than changes in price
There is a causal relation between
energy demand and growth
The study recommends that energy
policies should consider investment in
renewable energy and productivity.
In addition, energy price subsidies
should be removed since price changes do
not have much impact on energy demand.
References
*R is renewable energy * NR is non-renewable energy
*--- not significant
13
Hunt LC, Judge G. and Ninomiya Y. 2003a “Modelling
Underlying Energy Demand Trends.” in Energy in Competitive
Market: Essays in Honour of Colin Robinson pp. 140-174. Hunt
LC (Ed) Edward Elgar, UK
12
Table 2. STSM output (Long run)
11
Since energy investments require huge
capital outlay and long lead times, knowledge
of energy demand trend can assist with
investment and policy decision making.
Renewable and non-renewable energy
demand are responsive to changes in
productivity
-0.0001 -0.011 -0.0007 -0.014 -0.038 -0.002 -0.012 -0.003
15
14
 This calls
resources
Conclusion
Method
Research Aims
1975
1980
1985
1990
1995
Non-Renewable
Renewables
2000
2005
2010
Nigeria
R
NR
Ghana
R
NR
Algeria
R
NR
South Africa
R
NR
Renewable energy grew at 0.48% whilst Productivity 0.004 -0.915 --- -2.021 -0.034 8.407 --- 1.583
non-renewable grew at 0.54% per annum Income
0.005
2.314 0.509 2.831 1.583 6.621 2.351 1.607
from 1971 to 2010
Price
-0.0013 -0.031 -0.610 -0.007 -0.043 -0.019 -0.023 -0.005