Electricity Production and Economic Growth: The South African Case

Electricity production is an important contributing factor to economic growth. Since 2009, South Africa has been affected by an unstable electricity supply. The primary objective of this study was to assess the relationship between electricity production and economic growth and other applicable macroeconomic variables. A quantitative research methodology was utilised, using quarterly time-series data from 1994 to 2019. An econometric model was selected, using GDP as the dependent variable with electricity production, exports of electricity, domestic consumption and domestic investment as independent variables. The main results indicated cointegration exists among the variables, with positive relationships, except for a negative relationship between exports of electricity and economic growth. The study proved the availability of a stable electricity supply is critical to economic growth. To achieve acceptable levels of electricity supply, a competitive and non- monopolistic market is required, with good governance and public management in all spheres of government.