Abstract:
This study investigates the socioeconomic factors and governance indicators driving electricity theft in Rwanda, through empirical analysis. We used secondary quarterly data from 2002Q1up 2019Q4, retrieved from different sources of data. The Ordinary Least Squares (OLS) method have been used to analyze the influence of socioeconomic factors and governance indicators have on the electricity theft and an Autoregressive Moving Average (ARIMA) model have been used to forecast the electricity theft, to reflect the trend in consumer behaviour, as long as electricity theft is concerned. Our study found that, among the socioeconomic variables, the unemployment and electricity access was found to be significant.
On the other hand, among the governance indicators, the control of corruption and the rule of law was found to be significant as well. The study suggest that the unemployment positively influence the theft decisions of customers. On the other side, the control of corruption was found to be contributing to the reduction of electricity theft.
The forecast for 10 years to come, using ARIMA model, shows that the electricity theft will
keep increasing, unless measures are taken to tackle these acts. The intense and surprise
inspections would contribute to the reduction of electricity theft. In addition, the increase in
electricity access should go hand in hand with educating customers on risks associated with tempering with power infrastructure as well as investment in new technologies to fast track the electricity theft practices. Limited data and collinearity issue have been our limitations in our study and proposal for further studies have been highlighted.
