ENERGY ACCESS AND HOUSEHOLD INCOME IN SUBSAHARAN AFRICAN COUNTRIES

Keywords: energy access, per capita income, energy price, FDI and trade openness

Abstract

This study empirically examined the energy access and household income in Sub-Saharan African countries between 1990 and 2015. The study employed five variables: energy access, per capita income, energy price, FDI and trade openness, as well as panel unit root test using two criteria to test stationarity. Panel cointegration test was also conducted to test long-run cointegration between the variables employed. Panel granger causality test was employed to check the degree of causality between the dependent and explanatory variables and Auto Regressive Distributive Lag method of estimation was employed to check the long-run and short-run relationships between the variables. The results of the panel unit root test from the LLC and IPS methods show that the order of integrations is mixed with some of the variables being stationary at levels (household income, Foreign Direct Investment and Trade Openness) and first difference (Energy Access and Fuel Price) at the same time. The result of Pedroni cointegration test indicated the bivariate long-run cointegration equation between the variables employed except for EA and GDPPC. The panel granger causality test revealed that there is causality between these three variables (EA, GDPPC and FUELP) and the direction of causality only flows from these variables to energy access. The ARDL result revealed that all explanatory variables accounted for 60% variation of energy access in SSA. However, the study made the following policy implications: energy policy needs to be orientated in favor of expanding the supply of energy to reach an enhanced degree of sustainable economic growth and development, and governments in this region can subsidize energy products to increase its consumption and promote the welfare of their citizens.

Downloads

Download data is not yet available.

References

Afsharzade, N., Papzan, A., Ashjaee, M., Delangizan, S., Van Passel, S., & Azadi, H. (2016). Renewable energy development in rural areas of Iran. Renewable and Sustainable Energy Reviews, 65, 743-755.

Berkhout, F., Verbong, G., Wieczorek, A. J., Raven, R., Lebel, L., & Bai, X. (2010). Sustainability experiments in Asia: innovations shaping alternative development pathways? Environmental Science & Policy, 13(4), 261-271.

Brand-Correa, L. I., & Steinberger, J. K. (2017). A Framework for Decoupling Human Need Satisfaction From Energy Use. Ecological Economics, 141, 43-52.

Frelat, R., Lopez-Ridaura, S., Giller, K. E., Herrero, M., Douxchamps, S., Djurfeldt, A. A. & Rigolot, C. (2016). Drivers of household food availability in sub-Saharan Africa based on big data from small farms. Proceedings of the National Academy of Sciences, 113(2), 458-463.

Hallegatte, S., Fay, M., Bangalore, M., Kane, T., & Bonzanigo, L. (2015). Shock waves: managing the impacts of climate change on poverty. World Bank Publications.

Jayanthakumaran, K., Verma, R., & Liu, Y. (2012). CO 2 emissions, energy consumption, trade and income: a comparative analysis of China and India. Energy Policy, 42, 450-460.

Levin A, Lin CF, Chu CS, (2002). Unit root tests in panel data: asymptotic and finite sample properties. J Econometrics; 108(1):1e24.

McMichael, P. (2011). Development and Social Change: A Global Perspective: A Global Perspective. Sage Publications.

Munasinghe, M. (2013). Energy Analysis and Policy: Selected Works. ButterworthHeinemann. Oladokun,O.O and Adeagbo, M.O, (2011). Introduction to Macroeconomics. Tobistic Printing and Publishing Ventures. Agbonda, Kwara State.

Othieno, H., & Awange, J. (2016). Energy resources in Western and Central Africa. In Energy Resources in Africa (pp. 165-192). Springer International Publishing.

Ouedraogo, N. S. (2013). Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS). Energy Economics, 36, 637-647.

Oyedepo, S. O. (2014). Towards achieving energy for sustainable development in Nigeria. Renewable and Sustainable Energy Reviews, 34, 255-272.

Ozturk, I., & Acaravci, A. (2013). The long-run and causal analysis of energy, growth, openness and financial development on carbon emissions in Turkey. Energy Economics, 36, 262-267.

Ozturk, I., Aslan, A., & Kalyoncu, H. (2010). Energy consumption and economic growth relationship: Evidence from panel data for low and middle income countries. Energy Policy, 38(8), 4422-4428.

Pedroni P, (2004). Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory 20(3):597e625.

Peng, D., & Poudineh, R. (2017). Gas-to-Power Supply Chains in Developing Countries: Comparative Case Studies of Nigeria and Bangladesh.

Rao, N. D. (2012). Kerosene subsidies in India: When energy policy fails as social policy. Energy for Sustainable Development, 16(1), 35-43.

Raworth, K. (2012). A safe and just space for humanity: can we live within the doughnut. Oxfam Policy and Practice: Climate Change and Resilience, 8(1), 1-26.

Schwerhoff, G., & Sy, M. (2017). Financing renewable energy in Africa–Key challenge of the sustainable development goals. Renewable and Sustainable Energy Reviews, 75, 393-401.

Spreng, D. (2014). Transdisciplinary energy research–reflecting the context. Energy Research & Social Science, 1, 65-73.

Varey, R. J. (2012). The marketing future beyond the limits of growth. Journal of Macromarketing, 32(4), 424-433.

Watts, N., Adger, W. N., Agnolucci, P., Blackstock, J., Byass, P., Cai, W. & Cox, P. M. (2015). Health and climate change: policy responses to protect public health. The Lancet, 386(10006), 1861-1914.

Published
2019-06-30
How to Cite
Ojo Adejumo, M., & Bello Kazeem, A. (2019). ENERGY ACCESS AND HOUSEHOLD INCOME IN SUBSAHARAN AFRICAN COUNTRIES. Acta Economica, 17(30), 99-115. https://doi.org/10.7251/ACE1730099A
Section
Preliminary Communication

Most read articles by the same author(s)

Obs.: This plugin requires at least one statistics/report plugin to be enabled. If your statistics plugins provide more than one metric then please also select a main metric on the admin's site settings page and/or on the journal manager's settings pages.