Trade and Consumption of Energy Varieties: Empirical Analysis of Selected West Africa Economies

Abstract

This paper examined the relationship between consumption of energy varieties (total, electricity and road transport) and trade (export and import) in selected West African countries. Data spanning 1971 to 2010 was used to estimate vector error correction models (VECM) for 6 countries based on data availability. Empirical analysis showed that there is insignificant linkage between consumption of energy varieties and export of Benin. However, there is a one-way positive linkage running from energy varieties to import of the country. For Cote d'Ivoire, energy varieties have insignificant relationship with export and import. However, while inverse relationship runs from export to both electricity and road transport energy consumption positive (direct) association runs from import to total energy and transport energy consumption. With respect to Ghana, positive causality runs from electricity and road transport energy consumption to export. However, there is a significant positive feedback effect between import and electricity as well as road transport energy consumption. For Nigeria, there is a significant positive link running from both electricity and road transport energy consumption to export and import. Senegal's case suggests a bi-directional inverse linkage between export and total energy consumption. For Togo, both export and import are insignificantly linked with energy use. These mixed findings generate different policy implications across the selected West African countries, which are well articulated in the paper.