Fiscal Policy, Oil Price, Foreign Direct Investment, and Renewable Energy—A Path to Sustainable Development in South Africa

Mamon Adam Maarof (), Dildar Haydar Ahmed and Ahmed Samour ()
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Mamon Adam Maarof: Economics Department, Faculty of Economics and Administrative Sciences, Near East University, North Cyprus, Nicosia 99138, Turkey
Dildar Haydar Ahmed: Economics Department, Faculty of Economics and Administrative Sciences, Near East University, North Cyprus, Nicosia 99138, Turkey
Ahmed Samour: Accounting Department, Dhofar University, Salalah 211, Oman

Sustainability, 2023, vol. 15, issue 12, 1-16

Abstract: Since South Africa is in pursuit of accomplishing the 2030 Sustainable Development Goals, it has become pertinent to accelerate the desired energy transition. Against this background, this work aims to evaluate the effects of oil prices, fiscal policy, and foreign direct investment on renewable energy consumption in South Africa from 1979 to 2019. Using the novel Augmented Autoregressive Distributed Lag approach, this study finds that economic growth and taxation revenues positively promote renewable energy in South Africa. In contrast, the findings show that an increase in oil prices has a negative impact on renewable energy in both short and long periods. Likewise, the research shows that foreign direct investment was not found to enhance renewable energy. The findings from fully modified-OLS, dynamic ordinary least squares, and canonical cointegrating regression models corroborate the findings of the Autoregressive Distributed Lag method. For the Granger causality inference, the findings demonstrate that there is a one-way causal connection detected from economic growth to the consumption of renewable energy. Based on these outcomes, a policy framework has been offered to help South Africa to attain the sustainable development goals.

Keywords: ARDL; South Africa; renewable energy; sustainable development; oil price (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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