Energy System Performance and Human Development in South Africa: An ARDL Approach (1980–2023)

This study investigates the relationship between energy indicators and human development in South Africa over the period 1980–2023, employing a quantitative research design. Using secondary annual time-series data, the study examines the effects of electricity generation, per capita energy consumption, Oil-related fiscal revenue share as a share of total government revenue, and total energy consumption on the Human Development Index. The Autoregressive Distributed Lag (ARDL) bounds testing approach is employed to assess long-run and short-run relationships, complemented by Error Correction Models (ECM) to capture dynamic adjustments. Unit root and stability tests, including CUSUM and CUSUMSQ, ensure the robustness of the estimations, while Granger causality tests explore predictive linkages among variables. The findings reveal a positive long-run relationship between electricity generation and total energy consumption with human development, highlighting the importance of reliable and broad-based energy utilisation for enhancing welfare outcomes. In contrast, per capita energy consumption and Oil-related fiscal revenue share exhibit negative long-run effects, suggesting inefficiencies in energy use and the fiscal risks associated with reliance on oil-related government revenue. Short-run dynamics indicate that temporary adjustments, such as infrastructure expansion and transitional fiscal spending, can produce immediate but contrasting effects on human development. Granger causality analysis identifies unidirectional predictive relationships from electricity generation and Oil-related fiscal revenue share to human development, while total energy consumption exhibits weak bidirectional causality. Diagnostic tests confirm the model’s reliability and parameter stability over the study period. The results imply that energy policies in South Africa should prioritise efficient and inclusive energy use, ensure effective allocation of energy-related fiscal resources, and complement energy system improvements with broader socio-economic interventions. This study contributes to the understanding of the energy–development nexus in emerging economies, offering evidence-based insights for policymakers seeking sustainable human development. Future research could extend the analysis to provincial or sectoral levels, consider emerging energy technologies, and explore alternative development proxies to capture more nuanced socio-economic dynamics.