Examining the linkages between electricity consumption andeconomic growth in African economies

Abstract

As global energy consumption continues to increase, an increasing attention is also being drawn to theneed to embrace cleaner energy despite ensuring energy security and efficiency in production. This studyexamines the relationship between economic growth and electricity consumption in sub-Sahara Africaneconomies between 1971 and 2017. It employs the System Generalized Methods-of-Moments (SystemGMM) techniques so as to address the issues of endogeneity in the data generating process. We alsoexamine whether the impact of electricity consumption differs by the level of energy intensity, byemploying an advanced dynamic panel threshold regression model to ascertain the degree of thresholdlevel of energy intensity and the potential of threshold asymmetric of energy consumption on economicgrowth. Our results show significant positive relationship between electricity consumption and growth,including a threshold level of energy intensity which stood at 0.48%. This suggests that energy con-sumption beyond 0.48% will reduce growth, while consumption below this level will stimulate growth