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What Could Explain Low Uptake of Rural Electricity Programs in Africa? Empirical Evidence from Rural Tanzania

Author

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  • Ruhinduka, Remidius Denis
  • Bensch, Gunther
  • Selejio, Onesmo
  • Lokina, Razack

Abstract

Despite the great strides by the government of Tanzania in bolstering access to electricity in rural areas under its Rural Energy Agency (REA), rural connection rates have remained low. A substantial fraction of households residing “under the grid” remains unconnected despite the considerable state subsidy of this program. This study investigates the reasons for low uptake of seemingly highly subsidized, productive and modern energy. Using both bivariate and multivariate logit, we find that the distance between the household and the nearest electric pole matters. Households living farther away incur connection costs (associated with purchasing additional poles) beyond the subsidized price. Consistent with other energy literature, we find that both housing characteristics (e.g. size of dwelling, wall and roofing materials) and socio-economic characteristics (e.g. income, remittances and social network status) correlate with the decision to accept an electricity connection.

Suggested Citation

  • Ruhinduka, Remidius Denis & Bensch, Gunther & Selejio, Onesmo & Lokina, Razack, 2020. "What Could Explain Low Uptake of Rural Electricity Programs in Africa? Empirical Evidence from Rural Tanzania," EfD Discussion Paper 20-30, Environment for Development, University of Gothenburg.
    • Handle: RePEc:hhs:gunefd:2020_030
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    More about this item

    Keywords

    electrification; household decision; Tanzania; multinomial logit analysis;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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