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Industrialisation in Africa: The role of energy transition

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  • Ongo Nkoa, Bruno Emmanuel
  • Fonguen-Kong-Ngoh, Arnaud Barnabé

Abstract

As Africa increasingly turns to renewable and sustainable energy sources to meet its growing energy needs, this study investigates the economic implications of this shift by taking into account both the primary (fossil fuel-based) and secondary (renewable energy-based) energy transitions. Applying the instrumental variables method with fixed and random effects to a panel of 25 countries over the period from 2000 to 2021, we show that consumption of fossil and renewable energies has a positive effect on industrial sector's value added. However, this result is not identical for the countries of West Africa, where the use of renewable energy has a negative effect on industrialisation, or in Central Africa, where the effect is not significant. However, the overall positive effect of two forms of energy transition is robust to the use of technological, economic and institutional determinants, as well as to the use of Quantile Moment (QM) estimator. fossil fuels and renewable energies has virtuous effects on industrialisation. However, the effect of renewable energies is greater and makes it possible to achieve the dual objective of industrialisation and environmental preservation. We therefore recommend Establish an ambitious, multi-stakeholder international financing framework dedicated to energy transition and green industrialisation.

Suggested Citation

  • Ongo Nkoa, Bruno Emmanuel & Fonguen-Kong-Ngoh, Arnaud Barnabé, 2024. "Industrialisation in Africa: The role of energy transition," Energy Policy, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:enepol:v:193:y:2024:i:c:s030142152400291x
    DOI: 10.1016/j.enpol.2024.114271
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    More about this item

    Keywords

    Energy transition; Industrialisation; Instrumental variables; Quantile moments;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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