The Effect of Energy Consumption on Economic Growth in Cameroon

Abstract

This study was carried out to determine the Effect of Energy Consumption on Economic Growth in Cameroon from the period of 1980 to 2014. The energy sources used to test for this relationship were Petroleum and electricity. The study made used of secondary time-series data. Using the Generalised Method of Moments technique, the results obtained shows that Gross Domestic Product (GDP), population growth rate and petroleum prices, have a positive relationship with petroleum consumption. Also, there was an established positive relationship between Gross Domestic Product (GDP), population growth rate, electricity prices and electricity consumption. Again, the study found a positive and significant relationship between petroleum consumption, electricity consumption, Gross domestic investment (GDI) and population growth rate and economic growth. Furthermore, the empirical result revealed that the rate of inflation and economic growth are positively related. Based on the findings of this study, it is recommended that the government should expand current sources and exploit the other sources of energy such as solar energy, wind energy, thermal energy so as to increase the production and consumption of energy which increases economic growth.