Case Study Analysis of Energy Consumption in Africa

What does a case study on energy consumption in Africa reveal about economic growth? This research uncovers surprising causal relationships across 15 countries, highlighting how electricity emerges as a pivotal factor, reshaping our understanding of energy’s role in driving economic development.

V. RESULTS

V-i Unit root test ADF

Table 1: ADF unit root test

Table 1: ADF unit root test

Parameter/Criteria

Description/Value

Test results

	Variables	Level		1st Difference
		Constant	Constant and trend	Constant	Constant and trend
Nigeria
	lgdp	1.0000	1.0000	1.0000	0.0000**
	ltenercons	0.2386	0.5043	0.0000**	0.0001**
Egypt
	lgdp	0.9999	0.4913	0.4288	0.0283**
	ltenercons	0.9974	0.1267	0.0000**	0.0007**
South Africa
	lgdp	0.9975	0.9518	0.0015**	0.0021**
	ltenercons	0.7662	0.1623	0.0000**	0.0000**
Algeria
	lgdp	0.9995	0.9999	0.0001**	0.0017**
	ltenercons	0.9997	0.9732	0.0001**	0.0039**
Morocco
	lgdp	0.9991	0.7971	0.0037**	0.0115**
	ltenercons	0.9215	0.1097	0.0004**	0.0000**

Additional data

	Variables	Level		1st Difference
		Constant	Constant and trend	Constant	Constant and trend
Sudan
	lgdp	0.9972	0.9808	0.0059**	0.0104**
	ltenercons	0.9965	0.9144	0.0098**	0.0016**
Kenya
	lgdp	1.0000	0.9999	0.0325**	0.1208**
	ltenercons	0.9971	0.7968	0.0001**	0.0001**
Ethiopia
	lgdp	0.9919	1.0000	0.0067**	0.7107
	ltenercons	1.0000	0.9994	0.0012**	0.0004**
Tunisia
	lgdp	0.9980	0.5982	0.0027**	0.0075**
	ltenercons	0.6863	0.0040**	0.0001**	0.0005**
DR Congo
	lgdp	0.8161	0.8537	0.0000**	0.0000**
	ltenercons	0.2360	0.5375	0.1153	0.0011**

Supplementary results

	Variables	Level		1st Difference
		Constant	Constant and trend	Constant	Constant and trend
Ghana
	lgdp	1.0000	1.0000	0.9915	0.0032**
	ltenercons	1.0000	1.0000	0.9915	0.0032**
Libya
	lgdp	0.7746	0.0932	0.0046**	0.0239**
	ltenercons	0.4266**	0.0077**	0.0029**	0.0003**
Ivory Coast
	lgdp	0.9999	0.9588	0.0059**	0.0058**
	ltenercons	0.6598	0.1198**	0.0004**	0.0027**
Cameroon
	lgdp	0.9920	0.9691	0.0003**	0.0006**
	ltenercons	0.6468	0.2315	0.0000**	0.0000**
Angola
	lgdp	1.0000	0.9998	0.0148**	0.0034**
	ltenercons	1.0000	0.9997	0.3610	0.0019**

Notes: ** Rejection of the null hypothesis of non-stationary at 5% level of significant.

V-ii Result: Causality test between total energy consumption and GDP

Table2: Total energy consumption unidirectional causality toward GDP

Table 2: Total energy consumption unidirectional causality toward GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Results	Obs	F-statistic	Prob.
1	Nigeria	GDP— TENERCONS	31	0.22246	0.8021
		TENERCONS—> GDP		7.18061	0.0033**
2	Egypt	TENERCONS—>GDP	31	2.69048	0.0867**
		GDP—-TENERCONS		0.43477	0.652
3	South Africa	GDP—-TENERCONS	31	0.24076	0.7878
		TENERCONS—> GDP		3.98291	0.031**
7	Sudan	TENERCONS—>GDP	31	3.23401	0.0557**
		GDP—TENERCONS		0.46634	0.6324
9	Ethiopia	GDP—TENERCONS	31	0.56883	0.5731
		TENERCONS—> GDP		3.44793	0.047**
10	Tunisia	TENERCONS—->GDP	31	6.6617	0.0046**
		GDP—- TENERCONS		0.52541	0.5975
11	DR Congo	GDP—TENERCONS	31	0.62089	0.5452
		TENERCONS—->GDP		0.86872	0.4313**
13	Libya	GDP— TENERCONS	31	0.56662	0.5743
		TENERCONS—>GDP		6.8588	0.0041**

Table 3: GDP unidirectional causality towards total energy consumption

Table 3: GDP unidirectional causality towards total energy consumption

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Results	Obs	F-statistic	Prob.
4	Algeria	TENERCONS—-GDP	31	0.34106	0.7142
4	Algeria	GDP—-> TENERCONS	31	16.1035	3.00E-05**

Table 4: Total energy consumption and GDP feedback causality

Table 4: Total energy consumption and GDP feedback causality

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Results	Obs	F-statistic	Prob.
6	Angola	GDP—>TENERCONS	31	3.62829	0.0408**
6	Angola	TENERCONS—>GDP	31	5.13421	0.0132**
5	Morocco	TENERCONS—->GDP	31	1.0558	0.3624**
5	Morocco	GDP—>TENERCONS	31	0.86906	0.4312**
12	Ghana	GDP—->TENERCONS	31	1.91398	0.1677**
12	Ghana	TENERCONS—-> GDP	31	4.13318	0.0276**
8	Kenya	GDP—>TENERCONS	31	1.48164	0.2458**
8	Kenya	TENERCONS—>GDP	31	6.31209	0.0058**
15	Cameroon	GDP—->TENERCONS	31	3.0855	0.0627**
15	Cameroon	TENERCONS—>GDP	31	8.63303	0.0013**

But in Angola, Morocco, Ghana, Kenya and Cameroon the results are showing a feedback causality between both variables.

That is a bidirectional causality between total energy consumption and GDP (Table4).

Total energy consumption and GDP first test shows that in Nigeria, Egypt, South Africa, Sudan, Ethiopia, Tunisia, Ghana, Libya, Cameroon, total energy consumption has a unidirectional causality towards GDP(Table2).

Hence in Algeria, GDP predicts the value of the total energy consumption (table3). That result goes with the one of (Wolde-Rufael 2005).

V-iii Causality test between Total oil Consumption and GDP

Table 5: Oil consumption unidirectional causality toward GDP

Table 5: Oil consumption unidirectional causality toward GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.

13	Libya	GDP—OIL	31	0.54964	0.5837
13	Libya	OIL—>GDP	31	9.2932	0.0009**
1	Nigeria	OIL—>GDP	31	0.81555	0.4534**
1	Nigeria	GDP—OIL	31	0.05717	0.9446
8	Kenya	GDP— OIL	31	0.30164	0.7422
8	Kenya	OIL—>GDP	31	2.46109	0.105**

Table 6: GDP unidirectional causality towards total oil consumption

Table 6: GDP unidirectional causality towards total oil consumption

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
14	Ivory Coast	GDP—>OIL	31	1.03455	0.3696**
14	Ivory Coast	OIL—- GDP	31	0.04282	0.9582
5	Morocco	OIL—-GDP	31	0.33674	0.7172
5	Morocco	GDP—->OIL	31	9.42077	0.0008**

Table 8: Feedback causality between total oil consumption and GDP

Table 8: Feedback causality between total oil consumption and GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
3	South Africa	OIL—>GDP	31	5.03578	0.0142**
3	South Africa	GDP—>OIL		3.70546	0.0384**
6	Angola	GDP—>OIL		6.78133	0.0043**
6	Angola	OIL—>GDP		3.91886	0.0325**
15	Cameroon	OIL—>GDP		6.46978	0.0052**
15	Cameroon	GDP—>OIL		10.6733	0.0004**
7	Sudan	GDP—> OIL		2.00163	0.1554**
7	Sudan	OIL—> GDP		6.94292	0.0038**
9	Ethiopia	GDP—>OIL		2.14806	0.137**
9	Ethiopia	OIL—> GDP		4.84056	0.0163**
4	Algeria	OIL—>GDP		1.661	0.2095**
4	Algeria	GDP—->OIL		8.38261	0.0016**
10	Tunisia	OIL—->GDP		2.59353	0.094**
10	Tunisia	GDP—>OIL		1.18854	0.3207**
11	DR Congo	OIL—>GDP		3.1694	0.0586**
11	DR Congo	GDP—> OIL		1.63203	0.2149**
12	Ghana	GDP—-> OIL		2.5763	0.0953**
12	Ghana	OIL—->GDP		2.73859	0.0833**
2	Egypt	OIL—> GDP		1.68396	0.2053**
2	Egypt	GDP—>OIL		2.22892	0.1278**

Total oil consumption and Goss domestic product causality tests show that in Libya, Nigeria and Kenya the total oil consumption granger causes the GDP (table 5).

Meanwhile in Algeria, Morocco, the GDP granger causes total oil consumption (table6).

And in South Africa, Angola Sudan, Ethiopia, Algeria, Tunisia, DR Congo, Ghana, Egypt and Cameroon GDP causes total oil consumption and vice-versa (table 7).

V-iv Causality test between total electricity consumption and GDP

Table 9: electricity consumption unidirectional causes GDP

Table 9: electricity consumption unidirectional causes GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
10	Tunisia	ELECONS—>GDP	31	7.07005	0.0035**
10	Tunisia	GDP—ELECONS	31	0.65601	0.5273

Table 10: Bidirectional causes between electricity consumption and GDP

Table 10: Bidirectional causes between electricity consumption and GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
1	Nigeria	ELECONS—>GDP	31	1.77754	0.189
		GDP—> ELECONS		1.09519	0.3494

3	South Africa	ELECONS—>GDP	31	3.1539	0.0594**
		GDP—>ELECONS		1.16397	0.328**

7	Sudan	ELECONS—>GDP	31	1.26181	0.2999**
		GDP—> ELECONS		3.23799	0.0555**

9	Ethiopia	GDP—> ELECONS	31	7.64681	0.0024**
		ELECONS—->GDP		23.3317	2.00E-06**

12	Ghana	GDP—>ELECONS	31	2.84403	0.0764**
		ELECONS—->GDP		0.74114	0.4864**

13	Libya	ELECONS—->GDP	31	0.87394	0.4292**
		GDP—- ELECONS		1.36171	0.2739**

14	Ivory Coast	ELECONS—>GDP	31	1.38088	0.2692**
		GDP—->ELECONS		1.91627	0.1674**

15	Cameroon	GDP—-> ELECONS	31	1.03927	0.3679**
		ELECONS—> GDP		3.04296	0.0649**
2	Egypt	ELECONS—>GDP	31	4.28583	0.0246**
		GDP—->ELECONS		1.42828	0.2579**
5	Morocco	GDP—> ELECONS	31	1.0758	0.3557**
		ELECONS—>GDP		4.3437	0.0236**
6	Angola	GDP—-ELECONS	31	1.24073	0.3057**
		ELECONS—->GDP		7.59891	0.0025**
8	Kenya	GDP—-> ELECONS	31	1.50451	0.2408**
		ELECONS—> GDP		4.91944	0.0154**
11	DR Congo	GDP—->ELECONS	31	0.7715	0.4726**
		ELECONS—> GDP		6.65661	0.0046**

Total electricity consumption and GDP tests show a feedback causality for all countries(table10), except in Tunisia where we have a unidirectional causality of electricity consumption towards GDP.

V-v Causality test between total natural gas consumption and GDP

Table 11: Natural gas Consumption Unidirectional causality towards GDP

Table 11: Natural gas Consumption Unidirectional causality towards GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
6	Angola	GDP—NGASCONS	31	0.35744	0.7028
6	Angola	NGASCONS—>GDP	31	7.049	0.0036**
11	DR Congo	GDP—- NGASCONS	31	0.07068	0.9319
11	DR Congo	NGASCONS—-> GDP	31	5.37686	0.0111**

Table 12: GDP unidirectional causality towards natural gas consumption

Table 12: GDP unidirectional causality towards natural gas consumption

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
4	Algeria	GDP—>NGASCONS	31	15.1422	4.00E-05**
4	Algeria	NGASCONS—-GDP	31	0.16421	0.8494
5	Morocco	GDP—>NGASCONS	31	2.35961	0.1144**
5	Morocco	NGASCONS—-GDP	31	0.51196	0.6052

Table 13: Feedback causality between natural gas consumption and GDP

Table 13: Feedback causality between natural gas consumption and GDP

Parameter/Criteria

Description/Value

Causality results

Rank	Country	Result	Obs	F-statistic	Prob.
1	Nigeria	NGASCONS—> GDP	31	20.3551	5.00E-06**
		GDP—> NGASCONS		9.80185	0.0007**
3	South Africa	NGASCONS—- GDP	31	1.67704	0.2065**
		GDP—>NGASCONS		3.091	0.0625**
13	Libya	NGASCONS—> GDP	31	0.83186	0.4465**
		GDP—>NGASCONS		2.65239	0.0895**
14	Ivory Coast	GDP—-> NGASCONS	31	1.1873	0.321**
		NGASCONS—-> GDP		1.26285	0.2996**
2	Egypt	NGASCONS—> GDP	31	3.6864	0.039**
		GDP—- NGASCONS		1.8882	0.1715**
12	Ghana	GDP—>NGASCONS	31	5.54513	0.0099**
		NGASCONS—-> GDP		0.94455	0.4018**
15	Cameroon	GDP—>NGASCONS	31	5.64942	0.0092**
		NGASCONS—->GDP		1.34522	0.278**
10	Tunisia	NGASCONS—>GDP	31	6.95548	0.0038**
		GDP—>NGASCONS		1.04008	0.3677**

For the natural gas consumption and GDP test, we can see that in Angola and DR Congo, the natural gas consumption predicts the value of the GDP (table11).

Meanwhile in Algeria, Morocco the GDP granger causes the natural gas consumption (table 12).

Nevertheless rest of countries we observe a feedback causality between both variable(table13).

VI- CONCLUSION AND POLICY IMPLICATION

This research aimed to find the causality between energy consumption and GDP. Part one of our study focused on introduction to our research question.

The next part is the literature review related to our topic. The third part is the theoretical framework focused on the endogenous theory that we will link to our research question.

After we present our case study which are the fifth richest countries of Africa. We have selected GDP, Total energy consumption, total oil consumption, total electricity consumption and total natural gas consumption as variables.

And all those variables cover the period of 1980-2012. The next part is the result where we can see that energy consumption and GDP have a complementary effect.

Thus from a policy perspective, the results mean that adopting an apparently simple solution of reducing energy use is not going to help with development because it is visible that many countries rely on energy.

What is necessary is to alter the relationship between energy use and growth. In this regard, one solution consists in focusing on energy efficiency.

Meaning that to produce the same output or to consume the same energy services provided by energy-using products in a more efficient way.

This will require capital investment, nevertheless, that capital is less environmentally harmful than energy consumption.

Furthermore, it is necessary to test causality of other energy types as coal which might have a great impact in some countries.

Table des matières

Frequently Asked Questions

How does energy consumption influence economic growth in African countries?

The study reveals varying causal patterns across countries, with unidirectional causality from energy to GDP in some nations and bidirectional or neutral relationships in others.

Which type of energy has the strongest impact on economic growth in Africa?

The findings suggest that electricity has the strongest impact on economic growth among the energy types analyzed.

What is the time frame of the energy consumption and economic growth study in Africa?

The research investigates the causal relationship between energy consumption and economic growth in 15 African countries from 1980 to 2012.

What methodology was used to analyze energy consumption and GDP in the study?

The study uses Granger causality tests to examine the relationship between total energy consumption and GDP.

How Does Energy Consumption Influence Economic Growth? A Case Study Analysis of 15 African Countries (1980-2012)

Frequently Asked Questions

How does energy consumption influence economic growth in African countries?

Which type of energy has the strongest impact on economic growth in Africa?

What is the time frame of the energy consumption and economic growth study in Africa?

What methodology was used to analyze energy consumption and GDP in the study?

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