Renewable Energy and Economic Growth: The Role of Foreign Direct Investment in Sub-Saharan Africa

One of the concerns of governments in developing countries is to ensure energy independence by all means in order to boost economic growth. Particular attention is paid to renewable energies. This paper analyzes the contribution of foreign direct investment (FDI) to growth through the consumption of renewable energy. We use therefore a GMM estimation in system on panel data from 30 Sub-Saharan African countries over the period 1997 to 2021. The results show that the existence of the positive double causality between energy consumption and economic growth, are mixed for our sample. The results show also that, in presence of the foreign direct investments, the consumption of renewable energy positively affects the economic growth in sub-Saharan African countries. This effect prevails for all countries despite the heterogeneous levels of renewable energy consumption and the different transitions in the adoption of the consumption of these energies. Public policies should focus on the promotion of renewable energies consumption and investments in that way for a significant increase in the national product.