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An assessment of energy poverty in sub-Saharan Africa: the role of financial inclusion and education

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Abstract

Energy is a crucial resource which can contribute towards the development and growth of a nation. Therefore, energy poverty can significantly undermine economic, environmental, and social progress of a country. Sub-Saharan Africa (SSA) is the most deprived electricity region across the world, and hence, the energy poverty situation is more severe here compared to other regions. This paper intends to examine the determinants of energy poverty in SSA region considering data from 2004 to 2019. The study specifically focuses on the role of financial inclusion and education in eradicating energy poverty of this region with trade openness, economic growth, and natural resources being used as control variables. The study employs advanced econometric techniques such as pooled OLS, fixed effect model and Driscoll–Kraay standard error methodology. The findings demonstrate that financial inclusion and education significantly reduce energy poverty as both variables increase access to electricity and access to clean cooking fuel and technologies. Trade openness and natural resources have been found to be increasing energy poverty in SSA, while economic growth tends to alleviate it. Based on the above findings, the study provides several policy directions for effective elimination of energy poverty by the means of financial inclusion and education improvement in SSA region.

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Data availability

The data that support the findings of this study are available in World Bank Indicators at https://data.worldbank.org/indicator.

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Funding

The research funding from the Ministry of Science and Higher Education of the Russian Federation (Ural Federal University Program of Development within the Priority-2030 Program) is gratefully acknowledged.

Author information

Authors and Affiliations

  1. School of Landscape Architecture, Nanjing Forestry University, Nanjing, 210037, China

    Hui Wang

  2. Riphah School of Business and Management, Riphah International University, Lahore, Pakistan

    Muhammad Wasif Zafar

  3. Graduate School of Economics and Management, Ural Federal University, Ekaterinburg, Russian Federation

    Shujaat Abbas

  4. Adnan Kassar School of Business, Lebanese American University, Beirut, Lebanon

    Shujaat Abbas & Mehmet Akif Destek

  5. Department of Economics, Gaziantep University, Gaziantep, Turkey

    Mehmet Akif Destek

Authors
  1. Hui Wang
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  2. Muhammad Wasif Zafar
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  3. Shujaat Abbas
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  4. Mehmet Akif Destek
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Corresponding author

Correspondence to Shujaat Abbas.

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Appendix 1

Appendix 1

Generalized method of moments

 

Model-1

Model-2

Model-3

Model-4

LF1

0.0008*** (2.9199)

   

LF2

 

0.0001*** (2.8940)

  

LF3

  

0.0026*** (4.0103)

 

LF4

   

0.00003*** (4.7981)

LE

0.5366*** (14.0908)

0.5577*** (14.1091)

0.5272*** (14.1500)

0.5578*** (14.8629)

LT

 − 0.1973*** (− 8.0931)

 − 0.2118*** (− 8.6395)

 − 0.2022*** (− 8.6842)

 − 0.2309*** (− 9.6246)

LY

0.3153*** (17.6151)

0.3153*** (17.4353)

0.3202*** (19.1827)

0.3264*** (19.3661)

LNR

 − 0.0240*** (− 4.0597)

 − 0.0216*** (− 3.7378)

 − 0.0218*** (− 3.8180)

 − 0.0218*** (− 3.8777)

C

0.3298*** (5.2972)

0.3177*** (5.0887)

0.3318*** (5.4255)

0.3151*** (5.2625)

R-squared

0.892

0.885

0.901

0.895

Root MSE

0.1232

0.1240

0.1215

0.1225

  1. ***, **, and * represent significance level at 1, 5, and 10%, respectively. T statistics values are given in parentheses

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Wang, H., Zafar, M.W., Abbas, S. et al. An assessment of energy poverty in sub-Saharan Africa: the role of financial inclusion and education. Econ Change Restruct 56, 4689–4711 (2023). https://doi.org/10.1007/s10644-023-09568-8

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