Energy consumption and real GDP: Panel co-integration and causality tests for sub-Saharan African countries

 

 

Babajide Fowowe

University of Ibadan

 

 

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ABSTRACT

This paper investigates the causal relationship between energy consumption and real GDP in 14 Sub-Saharan African countries over the period 1971-2004. The results of panel co-integration tests showed that energy consumption and real GDP do not have a stable long-run equilibrium relationship. We find that for all members of the panel, there is homogenous causality from energy consumption to real GDP and vice versa. This bi-directional causality supports the feedback hypothesis.

Keywords: energy consumption, Sub-Sahara Africa, panel co-integration, real GDP

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Received 28 November 2010
Revised 2 July 2011