An attempt at forecasting electricity demand in Zanzibar.

This study is an attempt to forecast the future demand of electricity in Zanzibar by considering the three user categories, that is, domestic, industrial and commercial sales by using the econometric approach. It was hypothesised that: electricity demand for domestic use is positively related with GDP per capita and population; electricity demand for industrial use is positively related with the gross output and the capital labour ratio; and electricity demand for commercial uses is positively related with population and the commercial output. Three models, each for a user category, were estimated separately. The first hypothesis was partially supported by the available data. It was found that the electricity demand for domestic use is positively related with Gross Domestic Product. The second hypothesis also was partially supported by the available data. It was concluded that the electricity demand for industrial use is positively related with the capital labour ratio. And finally the third hypothesis was fully supported by the available data. Finally, a simulation exercise was done based on the estimated models and assumptions made about the Zanzibar economy to give an indication of the future demand of electricity.