Energy Consumption In Africa Research Articles

Striding towards a greener future: Unlocking the potential of natural resources and employment dynamics in green energy transition in sub‐Saharan Africa

AbstractThe adoption and utilization of renewable energy offer potential benefits such as enhanced energy efficiency, cost savings, and ecological advantages. However, a key research question addressed in this analysis is whether natural resource rent and employment dynamics influence renewable energy consumption in Africa. Previous research has predominantly focused on the aggregate employment rate, overlooking the nuances of labor diversity across sectors and employment types. Hence, this study evaluates the importance of natural resource rent and employment in driving the transition to green energy in sub‐Saharan Africa from 1991 to 2022. It employs the innovative method of moments quantile regression (MMQR) model for this purpose. The findings reveal a positive connection between natural resource rent and the adoption of green energy. When considering employment types, the study observes that self‐employment and wages/salaried workers undermine clean energy utilization. Moreover, the study highlights that employment across key economic sectors also plays a role. While employment in the agriculture and service sectors fosters green energy utilization, employment in the industrial sector impedes renewable energy consumption. To advance the development of green energy in Africa, this study underscores a range of policy options.

Unveiling the Nexus: Climate change, green innovation, and the pendulum of energy consumption and carbon emissions

This study delves into the complex interplay of climate change, natural disasters, energy consumption, and carbon emissions across 111 countries from 1990 to 2019. A structural shift in 2004 signifies altered global dynamics in CO2 emissions, closely linked to the escalation of meteorological and hydrological disasters driven by climate change. Globally, we illuminate the significant impact of climate-induced natural disasters, especially storms and extreme temperatures, on energy consumption and carbon emissions, albeit with variations. Regionally, we establish a notable positive association between extreme temperature-related disasters and both energy consumption and carbon emissions in Europe. Examining the aftermath of catastrophic events reveals an intensified influence of these disasters on carbon emissions and energy consumption in Africa, Latin America, and Europe. Developed economies experience significant impacts on carbon emissions and energy consumption from storms and extreme temperatures, while flood severity predominantly affects carbon emissions in developing countries. Additionally, we explore the potential of green patents in mitigating energy consumption and emissions triggered by disasters. While not conclusively proven, the statistically significant impact of green patents on energy conservation holds profound policy implications for advancing climate understanding, transforming energy landscapes, and addressing future sustainability concerns.

Can China's trade and investment facilitate renewable energy consumption in Africa?

Although several studies have investigated the impact of international trade and foreign direct investment (FDI) on energy consumption in Africa, extensive analyses from a renewable energy perspective are scarce. Moreover, the influence of Chinese FDI and trade on renewable energy consumption is quite inexistent. To fill the gap in the energy economics literature, this study empirically investigates the impact of China's trade and FDI on renewable energy consumption in 40 African countries over the period 2003 to 2016. The panel corrected standard errors estimation method is adopted. Additionally, panel causality tests are used to show the long-run relationship among the variables. The results revealed that both imports and outward direct investment from China had been positively associated with renewable energy consumption. However, exports to China were negatively related to renewable energy consumption. The results further reveal that economic growth and financial market developments are found to be ideal for promoting renewable energy consumption. The panel causality results show that there are significant bidirectional causalities between renewable energy consumption and economic growth. The results suggest that trade and investment policies should be integrated with renewable energy policy in order to achieve sustainable development. Besides, it is also important to adopt sound macroeconomic policies which promote economic growth and financial market development.

Energy consumption, institutional quality, and private capital inflows in Africa

ABSTRACT This paper investigates how institutional quality conditions energy consumption to influence private capital inflows in Africa using data from 1990 to 2019. The paper employed a modified dynamic system GMM. Our results show that energy consumption has a direct influence on private capital inflows, particularly FDI to Africa. Institutional qualities do not directly influence the effect of energy consumption on FDI but do influence the effect on portfolio investment. However, independently, institutional quality positively motivates FDI inflows into Africa. On the contrary, the reverse analysis showed that private capital inflows do not influence energy consumption in Africa.

Does political conflict tilt finance-renewable energy dynamics in Africa? Accounting for the multi-dimensional approach to financial development and threshold effect of political conflict

In order to shed empirical light on the impact of the multi-dimensional decomposition of financial development indicators on renewable energy usage, this study investigates the threshold effect of political conflict on finance-energy dynamics in Africa. The research output relies on a panel of 46 African nations from 2010 to 2020, using IV-GMM estimators that are robust to cross-sectional dependence and allow for heterogeneous slope coefficients. The results of direct, indirect, and threshold equations show that i.) Financial development indicators spur renewable energy consumption, while political conflict drags it. ii.) There is a threshold at which financial development could spur renewable energy in some regions of Africa, and the tendency of financial development to maintain such capacity is conditioned on the accessibility of financial facilities and political conflict/stability within a specific range of threshold values. iii.) the threshold level assessment shows that 11 countries in the panel, including Botswana, Mauritius, Cape Verde, Namibia, Seychelles, Zambia, Sao Tome and Principe, Gabon, Ghana and Benin Rep., are above the threshold level of political conflict in Africa. From a policy angle, driving up renewable energy consumption in Africa requires the government to provide enabling safety net environment for the diversification of finance options targeting innovative shifts away from traditional energy sources to the expansion of alternative renewable energy ventures.

Determinants of Renewable Energy Consumption in Africa: Evidence from System GMM

The adoption of renewable energy remains Sub-Saharan Africa’s best option to achieve sustainable growth and mitigate climate change. The essence of this study is to examine the factors that determine the adoption of renewable energy adoption in Africa by employing the System Generalized Methods-Of-Moment (GMM) to analyze data sourced from 1990 to 2019 on some selected African economies. The study examined the tripartite role of the economic, environmental, and socio-political factors on renewable energy adoption in Africa and noted that a positive relationship exists between economic and renewable energy adoption, supporting the validity of the feedback hypothesis. Hence, a policy that supports simultaneous growth of the economy and renewable energy could be adopted. The results further show that environmental factors such as carbon emission and ecological footprint negatively impact renewable energy (RE) adoption in Sub-Saharan African economies. The impact of socio-political factors is, at best mixed; for instance, the result of urbanization is positive and significant, suggesting that urbanization helps in the quick adoption of renewable energy in the studied economies, while the results of corruption show otherwise. To account for single-country dynamics, the study employed the full PMG and noted that the pollution haven hypothesis holds for a number of African economies. The results offer some policy implications.

Corruption: Is it a bane to renewable energy consumption in Africa?

Increasingly, a significant part of the literature on corruption establishes a negative relationship between corruption and economic variables. However, empirical research showing the influence of corruption on renewable energy consumption is useful because of the global interest in achieving a low-carbon and clean environment. In this light, we model a relationship between corruption and renewable energy consumption (% of total final energy consumption) in Africa. Using a panel dataset for 32 African countries covering the period 1996–2019, we first show that perception about corruption is relatively high in Africa. In line with corruption theory, both Generalized Method of Moments and Instrumental Variable estimation techniques are used to establish that corruption is inimical to the share of renewable energy consumption in total final energy consumption in Africa. To investigate the robustness of the results, we disaggregate the sample into high and low environmental performance countries as well as upper and lower-middle-income countries and still find consistent results. Our results call for strategic policies and institutional structures that seek to prevent corruption from further permeating the continent's administrative structures.

Financial Development, Economic Freedom, and Renewable Energy Consumption in Africa

Financial Development, Economic Freedom, and Renewable Energy Consumption in Africa

Renewable energy consumption in Africa: Evidence from a bias corrected dynamic panel

Our study investigates the determinants of renewable energy consumption in Sub-Sahara Africa. We explore the driving factors of renewable energy consumption in the context of carbon intensity for 32 Sub-Saharan African countries from 1990 to 2015. Using carbon emission intensity to identify group-specific heterogeneity, we recognize carbon-efficient and least carbon-efficient countries in the region. By relying on the corrected least squares dummy variable estimator (LSDVC), we provide evidence on the driving factors of renewable energy consumption in Sub-Saharan Africa. Consequently, the findings point to varying degrees of impact on renewable energy consumption in the region. For instance, we observe advancement in technology, quality of governance, economic progress, biomass consumption, and climatic conditions influence renewable energy consumption. With a common occurrence across all groups, the implications indicate environmental, socio-economic, and climatic factors playing an important role in renewable energy consumption. The study further shows that urbanization and economic globalization depress efforts towards renewable energy consumption. Apart from these common factors, other controlling variables including; GDP per capita, environmental awareness, and biomass affect each group differently. We conclude that, policy implications can be drawn from common factors towards harmonization of clean energy markets and developing a policy mix that combines environmental, economic, and social factors in attaining the Sustainable Development Goals.

Renewable energy consumption in Africa: the role of economic well-being and economic freedom

This study investigates the role of economic well-being and economic freedom as drivers of renewable energy consumption using the share of renewables in total energy consumption in Africa. To achieve this, the study employs a panel data of 32 African countries over the period 1996-2017. To deal with identification challenges associated with panel time-series data, we use the Dynamic Ordinary Least Squares econometric technique. As part of our findings, first, we have evidence that increasing economic well-being in Africa increases the share of renewables in total energy consumption to a point after which it turns negative (inverted U shape). Second, the disaggregated measures of economic freedom show that both property rights and tax burden decrease the share of renewables in total energy consumption. On the contrary, an increase in trade freedom and business freedom measures increases the share of renewables in total energy consumption. Toward the goal of promoting access to affordable, reliable, sustainable, and modern energy for all by 2030, governments in Africa should actively encourage trade freedom and business freedom to enhance the share of renewable energy consumption. Similarly, reducing the tax burden will promote the share of renewable energy consumption. Likewise, we call for further investigation into our evidence of a negative relationship between property rights and the share of renewables in total energy consumption.

Renewable Energy Consumption in Africa: Evidence From a Bias Corrected Dynamic Panel

Our study investigates the determinants of renewable energy consumption in Sub-Sahara Africa. We explore the driving factors of renewable energy consumption in the context of carbon intensity for 32 Sub-Saharan African countries from 1990 to 2015. Using carbon emission intensity to identify group-specific heterogeneity, we recognize carbon-efficient and least carbon-efficient countries in the region. By relying on the corrected least squares dummy variable estimator (LSDVC), we provide evidence on the driving factors of renewable energy consumption in Sub-Saharan Africa. Consequently, the findings point to varying degrees of impact on renewable energy consumption in the region. For instance, we observe advancement in technology, quality of governance, economic progress, biomass consumption, and climatic conditions influence renewable energy consumption. With a common occurrence across all groups, the implications indicate environmental, socio-economic, and climatic factors playing an important role in renewable energy consumption. The study further shows that urbanization and economic globalization depress efforts towards renewable energy consumption. Apart from these common factors, other controlling variables including; GDP per capita, environmental awareness, and biomass affect each group differently. We conclude that, policy implications can be drawn from common factors towards harmonization of clean energy markets and developing a policy mix that combines environmental, economic, and social factors in attaining the Sustainable Development Goals.

Effect of financial sector development on energy consumption in Africa: Is it threshold specific?

ABSTRACTThe relationship between financial development and energy consumption has not received much attention in theoretical and empirical literature. The scanty literature on the subject appears to exclude Africa while exacerbating the gap is probably no attempt to examine whether or not there exist nonlinearity in the relationship. This study reexamined the threshold effects of financial sector development on energy consumption in Africa by positing that whether finance promotes or inhibits energy consumption depends on a certain threshold of finance. Relying on an annual panel data for 45 countries in Africa covering 1973–2017, the study investigated the threshold effects of finance on energy consumption by employing Hansen sample splitting and threshold estimation technique. The results revealed evidence of threshold effect of finance on energy consumption for the continent suggesting that the impact of finance on energy consumption is threshold specific given the various indicators of finance. The main finding is that financial development generally promotes energy consumption in Africa but the impact is higher when they are below the threshold while the effect diminishes and eventually turn to inhibit energy consumption when they are above the threshold. Trade openness and inflation, however, inhibit energy consumption. This study provides member countries with well-informed level of their exposure to energy consumption. While increase in financial sector development motivated by other higher factors such as economic growth, inflation, and trade openness can be linked to higher energy consumption, higher finance driven by well-functioning regulatory institutions may potentially reduce energy consumption.

Determinants of renewable energy consumption in Africa.

Although the role that renewable energy consumption plays on economic growth and emissions has been widely studied, there are relatively few papers focusing on the determinants of renewable energy consumption, and only one study focuses on the factors related to the share of renewables in the energy consumption in Africa. This paper contributes to the literature by filling the gap in knowledge by exploring the nexus between the share of renewables in energy consumption and social and economic variables, for a panel consisting of 21 African countries for the period between 1990 and 2013, extending the set of variables and the time span used by a previous study. Estimating a random-effects generalized least squares regression, we find that countries with a higher Human Development Index and a higher gross domestic product per capita have a lower share of renewable energy in the national grid. On the other hand, an increase in foreign direct investment has been found to be related to higher renewable energy integration. The level of democracy, measured by the Freedom House political rights and civil liberties ratings, does not directly affect the integration level of renewable energy sources. The negative relationship between gross domestic product per capita and the share of renewables contradicts previous findings for developed countries. This contradiction and policy implications are discussed in the light of the review of the energy mix of the selected countries.

A panel data analysis of renewable energy consumption in Africa

The increasing global demand for energy security and sustainable development necessitated the need for a paradigm shift from fossil fuel energy sources to renewable energy sources in Africa. There is a dearth of information on the current pattern of renewable energy consumption as well as its key drivers in Africa. This study was therefore designed to investigate the determinants of renewable energy consumption in Africa, with a view to understanding the current pattern and its potential determinants.The study employed the panel data analysis involving five most populous and biggest economy in each of the five regions of Africa namely; Nigeria (West), Egypt (North), Ethiopia (East), DR Congo (Central) and South Africa (Southern) and using annual data from 1990 to 2015. Empirical analysis involved the estimation of both fixed effects and random effects models, while the Hausman test was employed for selecting the appropriate panel model and was found to be significant at p ≤ 0.05.Hausman test statistic value of 52.74 which was used to decide between fixed effects model and random effects model was found to be significant at 5%. The F-Statistic test value of 94.15 from the estimated fixed effect model was significant at 5%.

Income, environmental considerations, and sustainable energy consumption in Africa

ABSTRACTEvidence on income as a crucial driver of renewable energy consumption in Africa is mixed. But hydropower accounts for over 90% of renewable energy in sub-Sahara Africa alone. Yet, empirical evidence suggests that hydropower may not be as environmentally sustainable as believed and, as a legacy source of energy in Africa, may not accurately reflect attitudes on renewable energy motivated by environmental concerns. This paper examines the role played by economic performance in the rising sustainable energy consumption in Africa, focusing on the renewable energy sources that are compatible with sustainable development. The difference generalized method of moments, fully modified ordinary least squares, and dynamic ordinary least squares are employed to estimate the statistical significance of income, environmental sustainability proxy, and prices as important drivers of sustainable energy consumption in a panel of 10 African countries for the period 2000–2011—a time frame characterized by a rapid rise in renewables as a priority in environmental policy. With timing and measurement considerations on sources of renewables, results indicate that in contrast to recent literature, the rise in sustainable energy consumption in Africa is strongly driven by rising domestic incomes. In line with literature, however, there is a generally positive, albeit statistically insignificant relationship between sustainable energy consumption and levels of carbon emissions. Oil prices in real terms also correlate with sustainable energy consumption. Available data also show that countries with low energy security also coincidentally tend to have high small hydropower capacity, providing potential for sustainably reducing energy insecurity.

Bioenergy production and food security in Africa

Food and energy insecurities are the two greatest problems in Africa. Per capita energy consumption in Africa is less than 10% of that of United States of America while 18 out of 23 countries where starvation and malnutrition are most severe in the world are in Africa. Although various African governments have been making efforts to boast agricultural productivity, crop yields remain very low. Most governments do not even have accurate statistics on the number, location and types of crops produced by smallholder farmers that produce more than 80% of foods in Africa. This makes it very difficult to plan and implement any government support to the farmers. Sub-Saharan African countries have very high potential for production of different forms of bioenergy because the climatic conditions favour production of many energy crops. The big question has always been whether to produce bioenergy from food crops, especially in Africa with high acute food shortages. Large scale production of bioenergy may lead to competition with food crops for land, labour and other agricultural inputs. However, data from various sources indicate that Africa has abundant and underutilized arable land which can be effectively used for mass production of energy crops. Furthermore, shortage of labour cannot be a problem given the present very high rate of unemployment in most African countries. The benefits of bioenergy production in Africa outweigh the possible adverse effects on food security. Bioenergy production will create demand for, and stabilize the prices for crops, thereby increasing the earning of the farmers. This will in turn, facilitate industrialization in other sectors of economy through provision of affordable, renewable and clean energy. In order to minimize possible negative effects of bioenergy production on food security, land allocation for energy crop production can be regulated. Energy security cannot be separated from food security and the two should be seen as complimentary rather than as competitors.

Electricity consumption and economic growth: a time series experience for 17 African countries

While the availability of electricity by itself is not a panacea for the economic and social problems facing Africa, the supply of electricity is nevertheless believed to be a necessary requirement for Africa's economic and social development. This paper tests the long-run and causal relationship between electricity consumption per capita and real gross domestic product (GDP) per capita for 17 African countries for the period 1971–2001 using a newly developed cointegration test proposed by Pesaran et al. (2001) and using a modified version of the Granger causality test due to Toda and Yamamoto (1995). The advantage of using these two approaches is that they both avoid the pre-testing bias associated with conventional unit root and cointegration tests. The empirical evidence shows that there was a long-run relationship between electricity consumption per capita and real GDP per capita for only 9 countries and Granger causality for only 12 countries. For 6 countries there was a positive uni-directional causality running from real GDP per capita to electricity consumption per capita; an opposite causality for 3 countries and bi-directional causality for the remaining 3 countries. The result should, however, be interpreted with care as electricity consumption accounts for less than 4% of total energy consumption in Africa and only grid-supplied electricity is taken into account.