Information Communication Technology development and energy demand in African countries

Abstract

This paper investigates the relationship between ICT development and energy demand in 28 African countries for the period covering 2000 to 2014. ICT development is measured by the number of individuals using Internet and by the mobile cellular subscriptions. The study uses a dynamic energy demand model and adopts the System Generalized Method of Moments with a panel causality test. The results suggest that ICT development has a positive significant effect on energy demand, implying that the African countries under study have not yet achieved energy efficiency gains through ICT development. Unidirectional causal relationships from internet usage to energy demand and from energy demand to mobile cellular subscriptions are found. We found a bidirectional causality between mobile cellular subscriptions and electricity demand. Our results support that Africa needs to take advantage of the digital economic and that there is a potential leverage effect of energy on the development of mobile industry in Africa. Moreover, mobile technology can help in delivering electricity services and meet energy demand. The findings point out that internet usage reduces the demand of energy from other types of energy such as heat and transportation.