علیت سه جانبه متغیره بین رشد اقتصادی، شهرنشینی و مصرف برق در آنگولا: هم انباشتگی و تحلیل علیت

This paper investigates the causal relationship between economic growth, urbanisation and electricity consumption in the case of Angola, while utilizing the data over the period of 1971–2009. We have applied Lee and Strazicich, 2003 and Lee and Strazicich, 2004 unit root tests to examine the stationarity properties of the series. Using the Gregory–Hansen structural break cointegration procedure as a complement, we employ the ARDL bounds test to investigate long run relationships. The VECM Granger causality test is subsequently used to examine the direction of causality between economic growth, urbanisation, and electricity consumption. Our results indicate the existence of long run relationships. We further observe evidence in favour of bidirectional causality between electricity consumption and economic growth. The feedback hypothesis is also found between urbanisation and economic growth. Urbanisation and electricity consumption Granger cause each other. We conclude that Angola is energy-dependent country. Consequently, the relevant authorities should boost electricity production as one of the means of achieving sustainable economic development in the long run.

Energy is increasingly becoming a major force in the pursuit of sustainable development. The attribute of neutrality ascribed to energy by the neoclassical model is becoming more contestable as consistent growing sources of modern energy could directly aid livelihoods, and indirectly via promotion of economic growth (IEA, 2006). As a principal source of energy, accessibility to electricity aids the process of meeting residential and domestic needs; positively contributes to capital and labour productivity; promotes export potentials of countries (Narayan and Smyth, 2009); creates employment (Narayan and Smyth, 2005) and decreases the poverty level; and ultimately improves socio-economic development (Poveda and Martínez, 2011). Countries’ level of development appears to be associated with intensity of electricity usage, as only 24.84% of the population in less-developed countries enjoy electricity, while about 81.41% of the population in middle-income countries had access to electricity in the year 2009. In the same year, electricity consumption in the European Union was eleven fold the total consumption in sub-Saharan Africa, in spite of the African countries having a larger population (World Bank, 2011). Recognising the importance of electricity in an economic development agenda, there has been an upsurge of empirical studies to verify the true connection between electricity consumption and economic activity in different countries and regions. Causality tests are recurrently employed in existing energy papers to determine the relationship between electricity consumption and economic growth. The causality running from electricity consumption towards economic growth infers that electricity influences economic growth and thus electricity expansionary policies are compatible with improvement of economic performance of the country. Causality flowing from economic growth to electricity consumption implies that economic growth is not dependent on electricity usage and therefore, conservation policies should be pursued. Feedback hypothesis between electricity consumption and economic growth means that the variables are interrelated; which supports expansionary policies. The neutral hypothesis between economic growth and electricity consumption suggests the limited role of electricity consumption for economic growth2. Empirical studies on causal relationships between electricity consumption and economic growth are wide-ranging, but with inconsistent results (see Aqeel and Butt, 2001, Yoo, 2005, Yoo, 2006, Chen et al., 2007, Ho and Siu, 2007, Hu and Lin, 2008, Jamil and Ahmad, 2010, Narayan and Smyth, 2005, Shahbaz et al., 2011, Shahbaz and Lean, 2012b and Shahbaz and Feridun, 2012). Further, few studies have considered electricity consumption and economic growth relationship in selected African economies (see Jumbe, 2004, Wolde-Rufael, 2006, Akinlo, 2009, Squalli, 2007, Odhiambo, 2009a, Odhiambo, 2009b, Odiahmbo, 2010, Solarin, 2011 and Solarin and Bello, 2011). However, we are not aware of any study that has investigated causal relationship between electricity consumption and economic growth in the case of Angola. In the present study, we investigate the direction of causality between economic growth and electricity consumption by incorporating urbanisation as a potential determinant of both electricity consumption and economic growth in the case of Angola. It is vital to explore the nexus between these variables for Angola, because as one of the fastest growing economies in the world; it is faced with electricity challenges in trying to fulfil its growing energy needs. For instance, the country was among the three fastest-growing economies in the World, upon attaining a 17% economic growth rate between 2003 and 2008 (AFDB, 2011), whereas Angola's power sector is among the least efficient in the World, and even in Africa (Pushak and Foster, 2011) as the access rate to electricity was around 26.2% in the year 2009 (World Bank, 2011). In order to avoid omitted variable bias associated with bivariate models (Lutkepohl, 1982), the urbanisation rate is included to transform the study into a trivariate investigation. In practice, urbanisation and electricity consumption may individually have a direct influence on economic growth. They may also serve as intermediate variables for each other, when impacting the economy. Economic growth may in turn also affect either electricity consumption or urbanisation (Abdel-Rahman et al., 2006, Davis and Henderson, 2003, Liu, 2009 and Shahbaz and Lean, 2012a). In the Angola case, inclusion of urbanisation as a control variable is plausible, as there are territorial dimensions to distribution of electricity in the country, with the effect of booming economic activities concentrated in the urban centres, which are responsible for most of the electricity consumed in the country. The present study augments the ARDL bounds test with the Gregory–Hansen structural break cointegration, when testing for long run relationship in the series. Further, we compute the long run coefficients with the application of ARDL, which is complemented with the fully modified ordinary least squares (FMOLS) procedure of Philips and Hansen (1990), and the dynamic ordinary least squares (DOLS) by Stock and Watson (1993), due to endogeniety concerns. The current paper provides for two structural breaks with the procedures of Lee and Strazicich (2003), an exercise that is reasonable, considering the fact that the beginning and the end of the civil war in Angola fall within the scope of the analysis. The remainder of the paper is patterned as follows. Section 2 deals with the literature review related to electricity consumption and economic growth. Section 3 provides a summary of electric power in Angola, and Section 4 illustrates the methodology employed in this study. Section 5 provides the empirical results, and the last section completes the paper.

This study investigates causality between economic growth and electricity consumption in Angola over the period 1971–2009. The model is augmented with urbanisation as a control variable. We applied the ARDL bounds testing approach to examine cointegration and the VECM Granger causality approach to detect direction of causal relationship between the variables. Three cointegrating vectors were established, suggesting the existence of long run relationship between the variables. Results illustrate bidirectional causality between electricity consumption and economic growth, in line with the findings of Odhiambo (2009a) for South Africa, a fellow African country. Feedback hypothesis is observed between urbanisation and economic growth, and between electricity consumption and urbanisation. Besides, long run coefficients of the three estimators (the ARDL, the FMOLS and the DOLS) generally indicate that Angola's electricity consumption positively contribute to economic growth. The coefficients were weakened, with less positive impact of electricity consumption on economic growth during the period of the civil war. These foregoing results support the energy expansionist view. As a result, authorities in Angola must not only continue to invest in the area of electricity generation, but also explore other sources of electricity in the country. Being an oil-abundant country, natural gas as a source of electricity should be stimulated, which will not only lessen electricity cost, but also reduce health hazard triggered by gas flaring in the country. In the area of transmission and distribution of electricity, promotion of private participation to complement the (inadequate) distribution capacity of ENE (National Electricity Company) and EDEL (Electricity Distribution Company of Luanda) is necessary to further liberalise the sector. Local initiatives and contributions should be encouraged in combination with foreign involvement. Similarly, fair competition among potential private distributors may turn out to be a catalyst for the growth of energy in the country. Outside the period of the civil war, rapid urbanisation is attributable to developing countries that can either positively influence an economy through technological creativity and economic progress, or negatively impact the economy via its effect on straining infrastructures (Alam et al., 2007). It is left for policy-makers and planners to shape urbanisation policies in such a way as to make it a positive force for economic development, especially when pursuing energy expansionist programmes. Relevant policies to encourage the contribution of urbanisation involve infrastructure investments, trade protection policies, and price controls (Henderson, 2003). Above all, effective regulation of the electricity market is needed in securing quality of service, adequacy of technical, commercial and managerial know-how of staff, fair tariffs to electricity users, reasonable remuneration for potential investors, and creation of an accommodating atmosphere. The authorities should borrow a leaf from modern national standards and international best practices in setting the blueprint for the electricity sector. For future research, the present study may be reinvestigated by incorporating capital and labour as trade openness and financial development as potential determinants of economic growth, following Shahbaz and Lean (2012a) and (Sadorsky., 2010 and Sadorsky., 2011). Financial development may affect the economy by offering cheaper loans to consumers and producers. Trade openness may also influence growth through an exports-enhancement effect, and importing energy-efficient technology to be used in the production of electricity to increase domestic output. An investigation of the sectoral electricity-growth nexus would not only provide rigorous empirical analysis, but would also help policy-makers in articulating a comprehensive energy policy to sustain economic growth over the long run.