ENERGY CONSUMPTION PATTERNS IN MOZAMBIQUE: BALANCING ECONOMIC GROWTH WITH ENVIRONMENTAL SUSTAINABILITY

This study investigates the dynamic relationship between energy consumption patterns and economic growth in Mozambique from 1990 to 2023, focusing on the interaction between carbon dioxide emissions (CO₂), GDP growth (GDP), fossil fuel energy consumption (FFEC), and renewable energy output (REO). The study employed the ARDL approach to examine both the long- and short-run relationships among the variables. The findings reveal that both carbon dioxide emissions and energy consumption from fossil fuels negatively affect GDP. The analysis showed long-run negative impacts of CO2 emissions from the electricity sector (-183%), renewable electricity output (-78%), and fossil fuel consumption (-134%) on GDP. In the short run, the error correction term indicated a speed of adjustment of 140% towards equilibrium. Granger causality tests confirmed that renewable electricity output influences economic growth, fossil fuel energy consumption contributes to CO2 emissions, and fossil fuel use impacts renewable energy output, suggesting heavy reliance on fossil fuels despite their negative effects on growth. The policy recommendations include the need for a targeted energy transition strategy that promotes investment in renewable energy infrastructure, particularly hydropower and solar, which are abundant in Mozambique. Strengthening regulatory frameworks, incentivising private sector participation, and integrating environmental concerns into national development plans are essential steps. Furthermore, the promotion of energy efficiency and regional cooperation in clean energy projects can improve sustainability. The study contributes to the limited empirical literature on the energy environment and country-specific economic insights over a comprehensive data range. It highlights the feasibility of decoupling economic growth from environmental harm through sustainable energy practices in a low-income, yet resource-rich context. Limitations include data quality and availability issues, particularly regarding disaggregated renewable energy statistics and non-CO₂ greenhouse gases. Additionally, the study does not account for institutional, political, or social variables that may influence the implementation of energy policy. Future research could explore sector-specific energy impacts, incorporate climate adaptation metrics, or apply scenario-based modelling to evaluate the long-term effects of various energy policies under climate uncertainty. A regional comparative analysis within Southern Africa could also yield valuable policy insights.