Sectoral Energy Consumption in South Africa and Its Implication for Economic Growth
South Africa is in its post-industrial era moving from
the primary and secondary sector to the tertiary sector. The study
investigated the impact of the disaggregated energy consumption
(coal, oil, and electricity) on the primary, secondary and tertiary
sectors of the economy between 1980 and 2012 in South Africa.
Using vector error correction model, it was established that South
Africa is an energy dependent economy, and that energy (especially
electricity and oil) is a limiting factor of growth. This implies that
implementation of energy conservation policies may hamper
economic growth. Output growth is significantly outpacing energy
supply, which has necessitated load shedding. To meet up the excess
energy demand, there is a need to increase the generating capacity
which will necessitate increased investment in the electricity sector as
well as strategic steps to increase oil production. There is also need to
explore more renewable energy sources, in order to meet the growing
energy demand without compromising growth and environmental
sustainability. Policy makers should also pursue energy efficiency
policies especially at sectoral level of the economy.
Causality, economic growth, energy consumption,
hypothesis, sectoral output.