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Does financial development improve access to electricity in sub-Saharan Africa?

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  • Thierry Mamadou Asngar

    (University of N’Djamena)

Abstract

This study examines the effect of financial development on access to electricity in a sample of 45 countries in sub-Saharan Africa from 1997 to 2018. Domestic credit to the private sector and the financial development index are considered proxies for financial development in previous literature to explain access to electricity through financial development in sub-Saharan African countries. We test this relationship using pooled ordinary least squares, fixed effects, and system generalised method of moments (GMM). The results showed that economic credit accelerates access to electricity in Africa. This result remains robust when considering different population levels. Rural populations also benefit from access to financial services. Additionally, considering the different indicators of financial development, we note that the results remain unchanged. We recommend that African countries accelerate financial inclusion to allow the population to benefit from better access to electricity.

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  • Thierry Mamadou Asngar, 2022. "Does financial development improve access to electricity in sub-Saharan Africa?," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.
    • Handle: RePEc:spr:snbeco:v:2:y:2022:i:9:d:10.1007_s43546-022-00324-0
    DOI: 10.1007/s43546-022-00324-0
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    More about this item

    Keywords

    Financial development; Access to electricity; Sub-Saharan Africa; Population;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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