Effect of Electricity Access on Electricity Consumption in Ghana

Abstract

Purpose: The importance of electricity infrastructure has encouraged countries to improve its access and enhance its consumption. Ghana has made a lot of improvement in expanding electricity infrastructure to its people. Yet, the actual effect of increasing electricity access on electricity consumption in Ghana is unknown. The main thrust of this paper was to estimate the effect of electricity access on the consumption of electricity in Ghana from 1990 to 2020. Methodology: This study employed a Vector Error Correction model to estimate the effect of electricity access on electricity consumption using data from 1990 to 2020. Findings: Results show that a one percent increase in access rate of electricity increases its consumption by 10.46 kwh per capita and 61.02 kwh per capita in the short-run and in the long-run respectively. Factors such as national income, population and the country’s human development index (HDI) were also found to be significant determinants of electricity consumption in Ghana. Unique Contribution to Theory, Practice and Policy: It is also recommended that policies that encourage education among women must be enhanced to reduce their child bearing years, reduce population growth and reduce pressure on electricity infrastructure.