An Econometric Analysis Of Energy Consumption And Economic Growth In Uganda

This study investigates energy consumption and economic growth, with evidence from Uganda (19822018). The study uses vector error correction model (VECM) Variance Decomposition Analysis (VDA) and cumulated Impulse Response (CIR). The results support a one directional causal relationship between non-renewable energy consumption and economic growth with a positive relationship in the long run, renewable energy consumption has a negative long run relationship with economic growth as shown in the VECM. This SVAR shows that these results are not significant. The conclusion therefore is that there should be efforts to increase clean energy in the renewable energy matrix nonrenewable energy consumption in regard to economic growth is mainly attributed to imported fossil fuels particularly diesel that is used in thermal generators to run electricity hence unable to support the growth process over the long run. This paper provides insights on how energy drives economic growth and sustainable development. It also captures the impact of investment into overall economic growth that is in line with the contemporary.