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The Impact of Electricity Price on Economic Growth in South Africa

Author

Listed:
  • Hlalefang Khobai

    (Department of Economics, Nelson Mandela Metropolitan University, South Africa,)

  • Gift Mugano

    (Department of Economics, Nelson Mandela Metropolitan University, South Africa)

  • Pierre Le Roux

    (Department of Economics, Nelson Mandela Metropolitan University, South Africa.)

Abstract

This study explores the relationship between electricity prices and economic growth in South Africa within a multivariate framework over the period 1985-2014. The autoregressive distributed lag (ARDL) bounds test is implemented to determine long run relationship among the variables. The findings of the ARDL model suggest that there is a long run relationship between electricity supply, economic growth, electricity prices, trade openness, employment and capital. Specifically, the empirical findings reveal that electricity prices negatively affect economic growth while electricity supply, trade openness, capital and employment have a positive impact on economic growth. These findings bring a fresh perspective for creating electricity policies that will enhance economic growth in South Africa.

Suggested Citation

  • Hlalefang Khobai & Gift Mugano & Pierre Le Roux, 2017. "The Impact of Electricity Price on Economic Growth in South Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 7(1), pages 108-116.
    • Handle: RePEc:eco:journ2:2017-01-12
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    References listed on IDEAS

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    Cited by:

    1. Lawrence U. Okoye & Alexander E. Omankhanlen & Johnson I. Okoh & Ngozi B. Adeleye & Felix N. Ezeji & Gideon K. Ezu & Benjamin I. Ehikioya, 2021. "Analyzing the Energy Consumption and Economic Growth Nexus in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 378-387.
    2. Hlalefang Khobai & Sanderson Abel & Pierre Le Roux, 2021. "A Review of the Nexus between Energy Consumption and Economic Growth in the BRICS Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 424-431.
    3. Bakari, Sayef, 2018. "The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 3(1), pages 35-51, March.
    4. Rubanda, Muhumuza Ezra & Senyonga, Livingstone & Ngoma, Mohammed & Adaramola, Muyiwa S., 2023. "Energy market integration: Harmonizing tariff recourse policies in East Africa," Utilities Policy, Elsevier, vol. 84(C).
    5. Sayef Bakari, 2017. "The Relationship between Export, Import, Domestic Investment and Economic Growth in Egypt: Empirical Analysis," EuroEconomica, Danubius University of Galati, issue 2(36), pages 34-43, November.
    6. Tomasz Rokicki & Piotr Bórawski & Barbara Gradziuk & Piotr Gradziuk & Aldona Mrówczyńska-Kamińska & Joanna Kozak & Danuta Jolanta Guzal-Dec & Kamil Wojtczuk, 2021. "Differentiation and Changes of Household Electricity Prices in EU Countries," Energies, MDPI, vol. 14(21), pages 1-21, October.
    7. Khobai, Hlalefang & Abel, Sanderson & Le Roux, Pierre, 2017. "A Review of the Nexus Between Energy consumption and Economic growth in the Brics countries," MPRA Paper 82462, University Library of Munich, Germany.
    8. Nyiko Worship Hlongwane & Mpho Lenoke & Olebogeng David Daw, 2023. "An Analysis of Electricity Generation, Supply, and Economic Growth in Selected SADC Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 482-493, November.
    9. Hlalefang Khobai, 2018. "Electricity Consumption and Economic Growth: A Panel Data Approach for Brazil, Russia, India, China and South Africa Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 283-289.
    10. Khobai, Hlalefang, 2017. "Electricity consumption and Economic growth: A panel data approach to Brics countries," MPRA Paper 82460, University Library of Munich, Germany.
    11. Razzaq, Asif & Sharif, Arshian & Yang, Xiaodong & Dogan, Eyup, 2024. "Influence mechanism of electricity price distortion on industrial green transformation: A spatial analysis of Chinese regions," Energy Economics, Elsevier, vol. 130(C).
    12. Lawrence U. Okoye & Alexander E. Omankhanlen & Johnson I. Okoh & Uchechukwu E. Okorie & Felix N. Ezeji & Benjamin I. Ehikioya & Gideon K. Ezu, 2021. "Effect of Energy Utilization and Financial Development on Economic Growth in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 392-401.
    13. Sinazo Guduza & Andrew Phiri, 2017. "Efficient market hypothesis: Evidence from the JSE equity and bond markets," Working Papers 1718, Department of Economics, Nelson Mandela University, revised Dec 2017.
    14. repec:eco:journ2:2017-04-29 is not listed on IDEAS
    15. Yuichi Ikeda, 2020. "Power grid with 100% renewable energy for small island developing states," Evolutionary and Institutional Economics Review, Springer, vol. 17(1), pages 183-195, January.

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    More about this item

    Keywords

    Economic Growth; Electricity Prices; South Africa;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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