Electricity consumption and economic growth in Lesotho

The paper analyses the causal relationship between electricity consumption and economic growth in Lesotho for the period 1972-2011 by using autoregressive distributed lag bounds testing approach of cointegration. The results indicate that there is a stable long-term relationship between electricity consumption and economic growth, with the direction of causality running from economic growth to electricity consumption. These findings support the conservation hypothesis and imply that economic growth in Lesotho spurs electricity consumption, but not the other way round. Therefore, various energy conservation measures aimed at reducing electricity consumption and waste in Lesotho may not have a negative impact on economic growth.