Energy Humanization, Institutional Environment And Sectoral Growth In Ghana

Abstract

The study constructs an energy humanization index for Ghana, estimates the impact of energy humanization dimensions on sectoral growth, and evaluates the moderating influence of institutional environment on the energy-growth relationship. The study employed the minimum-maximum normalization, exponential smoothing forecasting method, and the Dynamic Ordinary Least Square (DOLS) estimation technique for its analysis. Data was sourced from WDI, EIA, The global economy and Energy Commission of Ghana. The study reveals a positive trend in energy humanization, particularly in energy usage. However, concerning energy security, Sub dimensions such as energy acceptability, affordability, and technology application have exhibited a decreasing trend, which is anticipated to worsen in the future if significant interventions are not implemented. Conversely, energy availability has demonstrated a consistent increasing trend. Furthermore, the study highlights the positive contribution of energy humanization to growth across all sectors of the economy. Whilst energy security as a disaggregated component of energy humanization has no impact on sectoral growth, energy usage emerged as a significant factor affecting growth in Ghana. Finally, the study shows a positive moderating role of both political and economic institutions in the energy humanization and sectoral growth relationship in Ghana. The study recommends the use of carbon capture by IPPs and energy sector policies must deal with energy security and energy usage simultaneously as opposed to treating them separately. The Ministry of Finance must be circumspect in imposing more taxes on petroleum products and electricity tariffs although they are inelastic goods.