Thank you for sharing your work. This story is very interesting, but I think it needs some work. I hope I understood it correctly: he is the ghost haunting the city, but he is unaware of this, and because he is the ghost, he is unable to leave the city. I hope that's right.
That said, I think the story needs some more character development. As it stands, I don't have much empathy for the MC, despite his "condition". This is especially true for me in the third and fourth paragraphs. The "friend" is completely ambiguous and has no personality whatsoever. If I understood your story correctly, maybe he doesn't realize that his friend is probably long gone, but I would like to have more feeling to one of the characters, either the MC or the potential victim. Why was their friendship so special? What was the friend's name, even? Why is it devastating that the friend is gone? I think this would help to make the idea that the old man/demon must die more compelling, and help pull me as the reader more into the story.
If I am completely off-base with what your story is about, then of course, completely disregard my suggestions, and my apologies for my misinterpretations.