Effects of urbanisation on energy consumption in Ghana.

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October, 2016
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According the findings of Garg and Halnes (2008), energy security plays a crucial role in the growth and sustainable development of every country. Meanwhile the fast increasing urbanization in urbanization projected by the United Nations Population Division (2007) is hypothesized to affect energy consumption significantly. As a result, this study used time series Vector Error Correction Model (VECM) to investigate the quantitative effect of urbanization on energy consumption in Ghana for the period 1990 to 2013. The integrating properties and the long run relationships among the study variables were investigated using the unit root test and ARDL bounds test approach to co-integration.From the results, it was found that, Ghana’s energy consumption correlates with urbanization, industrialization and GDP both in the short run and in the long run. Energy consumption was found to granger cause GDP while GDP had no causal effect on energy consumption. No causal relationship exists between urbanization and energy consumption. There exist however a feedback effect between urbanization and industrialization. Hence, it is recommended that, any government policy to increase Ghana’s GDP should target increasing energy consumption in both the short run and the long run.
A thesis submitted to the School of Graduate Studies, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirements for the award of master of science in energy and resource economics,