Causality between energy poverty and economic growth in Africa: Evidences from time and frequency domain causality test

Abstract

Due to the growing concern regarding energy poverty and its relation to economic growth, the paper evaluates the causality between both fields in Sub-Saharan Africa. The paper reviews all aggregated income levels thus developing aggregated series, from 1973 to 2012, in annual frequency. The well-established and generally accepted time domain Granger causality analysis is adopted. In addition, a new frequency domain causality test is performed enabling the identification and distinguishing of the causal relationship, while considering each specific frequency. Significant results are withdrawn from the time domain causality test indicating bi-directional causal links between economic growth and energy consumption, especially with regard to fossil fuel energy consumption. The comparisons between the frequency domain causality results, of different variables indicate not only a highly unidirectional causality relationship between energy consumption and economic growth, but also a tendency of enhanced significance for the emerging cycle length.