Liberalization of Utility Services in the Developing Countries: A Panacea to Economic Development? An Analysis on Malawi Power Sector

Byson Beracah Majanga

Abstract


Economic development is a compound outcome arising from a combination of many factors which may include among others, good governance; educational levels of the citizenry; effective political and administrative systems; availability of production resources; as well as availability of utilities such as reliable electricity and clean and potable water.

Holding all other factors constant, the paper discusses the impact of reliable accessibility of utilities on economic growth and whether it is necessary or not to privatise or liberalise the utility sector, especially the electricity sector to enhance power access in promoting economic growth in developing countries like Malawi. Most developing countries in Africa face a lot of challenges in power generation and supply and the paper is focusing on establishing whether these challenges are a significant cause for stunted growth in GDP per capita in these countries, and whether liberalisation could be a way out of persistent power shortages affecting the economy.

The study findings reveal that there is a direct relationship between electricity consumption and growth in GDP per capita and that most developing countries struggling to improve their economies share the same challenge of power supply for effective productivity. The study further finds that liberalization of the power sector can invigorate the country’s productivity and hence improve the GDP per capita.


Full Text:

PDF

References


Adebola, S. (2011). Electricity Consumption and Economic Growth: Trivariate investigation in Botswana with

Akinlo, A. (2009). Electricity Consumption and Economic Growth in Nigeria: Evidence from Cointegration and

Atkins, K., & Emehelu, I. (2014). Power Privatizations in Africa: Key Lessons. Project Finance. NewsWire.

Babbie, E., & Mouton, J. (2007). The Practice of social research. Oxford University Press, Southern Africa: Cape Town.

Bamenjo, N. (2002). Energy Sector Privatisation in Africa: What Perspectives for Rural Electrification. Presentation to the Second International Conference: Energy for Sustainable

Bayliss, K. (2003), Utility Privatisation in Sub-Saharan Africa: A Case Study of Water. Journal of Modern African Studies, 41(4), 507-531.

Bazilian, M., Nussbaumer, P., Rogner, H., Hammond, A., Foster, V., Pachauri, S., Williams, E., Howells, M., Niyongabo, P., Musaba, L., Gallachóir, B., Radka, M., & Kammen, D. (2012). Energy access scenarios to 2030 for the power sector in sub-Saharan Africa. Utilities Policy. Elsevier Publications.Capital Formation. International Journal of Energy Economics and Policy, Co-Feature Analysis. Journal of Policy Modeling, 31(5), 681-693

Dillman, D. A. (2000). Mail and International Surveys: The Tailored Design Method. New York: Wiley.

Eberhard, A. (2001). Competition and regulation in the electricity supply industry in South Africa. Trade and Industrial Policy Strategies (TIPS) 2001 Annual Forum

Eberhard, A., Foster, V., Garmendia, C., Ouedraogo, F., Camos, D., & Shkaratan, M., (2008). Underpowered: The State of the Power Sector in Sub-Saharan Africa. World Bank Report, Back ground paper .

Gamula, T., Hui, L., & Peng, W. (2013) An Overview of the Energy Sector in Malawi. Energy Power and Engineering http://dx.doi.org/10.4236/epe.2013.51002.

International Energy Agency, (2005). Lessons from Liberalised Electricity Markets. OECD/IEA.

Jebran, K. (2013). Causal Relationship between Electricity Consumption and GDP in Pakistan. Journal of Asian development studies, 2(4), ISSN 2304-375X.

Johansen, S., & Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Cointegration with Application to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52, 169-210.

Jumbe, C. (2004). Cointegration and Causality between Electricity Consumption and GDP: Empirical Evidence from Malawi. Energy Economics, 26, 61-68.

Kouakou, A. K. (2011). Economic Growth and Electricity Consumption in Cote d’Ivoire: Evidence from Time Series Analysis. Energy Policy, 39, 3638-3644.

Lea, N. & Hanmer, L., (2009). Constraints to Growth in Malawi, World Bank Policy Research Working Paper 5097

Ministry of Economic Planning and Development, (2012). Malawi Government Annual Economic Report (2012), 49-50. November 2014. http://www.chadbourne.com/Power-Privatizations-in-Africa- Key- Lessons_projectfinance/

Odhiambo, N. M. (2009). Energy Consumption and Economic Growth Nexus in Tanzania: An ARDL Bounds Testing Approach. Energy Policy, 37, 617-622.

Okoro, O., & Chikuni, E. (2007). Power sector reforms in Nigeria: Opportunities and challenges. Journal of Energy in Southern Africa, 18(3), 52-57.

Rafael, A., Vicente, S., Mahia, R., & Medina, E. (2014). Trade liberalization and poverty reduction in Africa: Computable general equilibrium models approach. Literature review. International Journal of Political Science and Development, 2(5), 90-96

Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students. Prentice Hall:Edinburgh, England.Societies, Bogota, Colombia, 25-27.

UN-Habitat. State of the World’s Cities: Trends in Sub-Saharan Africa Urbanization & Metropolitanization, SOWC/04/RB/4 www.unhabitat.org

United Nations. (2005). Water and Urbanisation. http://www.un.org/waterforlifedecade/water_cities.shtml.

Welman, C., Kruger, F., & Mitchell, B. (2005). Research methodology. Oxford University Press, Southern Africa: Cape Town.




DOI: https://doi.org/10.11114/aef.v2i3.853

Refbacks

  • There are currently no refbacks.


Paper Submission E-mail: aef@redfame.com

Applied Economics and Finance    ISSN 2332-7294 (Print)   ISSN 2332-7308 (Online)

Copyright © Redfame Publishing Inc.

To make sure that you can receive messages from us, please add the 'redfame.com' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.

-------------------------------------------------------------------------------------------------------------------------------------------------------------