Government activities and fossil fuel consumption in Ghana

The purpose of the study is to investigate the relationship between government activities (proxied by government expenditures) and fossil fuel for the period 1971-2011 for Ghana, using annual time series data obtained from World Bank database. The empirical estimates was done by employing the Autoregressive distributed lag model (ARDL), after the Augmented Dickey Fuller (ADF) and Kwiatkowski-Philips-Schmidt-Shin (KPSS) tests have been used to analyse the unit root properties of the variables. The unit root test results indicate the variables are unit root in levels and not in first difference. The cointegration test result shows stable cointegration link between the variables. However, the long run estimate indicates insignificant positive effect of government activities on fossil fuel consumption, whereas, the short run estimate results of the study shows there is stable short run link between government activities and fossil fuel consumption. The policy implication of the findings is that government activities is not a policy tool in the management of fossil fuel consumption.