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Modeling and forecasting demand for electricity in Zimbabwe using the Box-Jenkins ARIMA technique

NYONI, THABANI (2019): Modeling and forecasting demand for electricity in Zimbabwe using the Box-Jenkins ARIMA technique.

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Abstract

This study, which is the first of its kind in Zimbabwe, uses annual time series data on electricity demand in Zimbabwe from 1971 to 2014, to model and forecast the demand for electricity using the Box-Jenkins ARIMA framework. The study is guided by three objectives and these are: to analyze electricity consumption trends in Zimbabwe over the study period, to develop a reliable electricity demand forecasting model for Zimbabwe based on the Box-Jenkins ARIMA technique and last but not least, to project electricity demand in Zimbabwe over the next decade (2015 – 2025). Diagnostic tests indicate that X is an I (1) variable. Based on Theil’s U, the study presents the ARIMA (1, 1, 6) model, the diagnostic tests further show that this model is stable and hence suitable for forecasting electricity demand in Zimbabwe. The selected optimal model, the ARIMA (1, 1, 6) model proves beyond any reasonable doubt that in the next 10 years (2015 – 2025), demand for electricity in Zimbabwe will continue to fall. Amongst other policy recommendations, the study advocates for the liberalization of the electricity power sector in Zimbabwe in order to pave way for more efficient private investment whose potential is envisaged to adequately meet the existing demand for electricity.

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