Abstract:
Since 2008, the South African economy has experienced several power cuts (unplanned or as part of a load-shedding schedule), presumably because of the inability of the electricity supply to cover the demand. This paper examines the impact of such a demand-supply mismatch on the country’s economic growth within a production function framework. To do so, we use an Autoregressive Distributed Lag Model (ARDL) for the period 1985 to 2019. The paper finds that a positive mismatch (or surplus) of electricity (supply>demand) boosts economic growth in the long run. This finding provides evidence that supports the necessity of electricity supply expansion and the promotion of energy efficiency measures that both will create a mismatch (surplus) conducive to economic growth.
