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Are growth effects of foreign capital significant for increasing access to electricity in Africa?

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  • Mbiankeu Nguea, Stéphane
  • KAGUENDO, Ulrich Vianney Elisée

Abstract

Despite the advancements towards Sustainable Development Goal 7, access to electricity in Africa is still lagging far behind the goal. In this study, we employ a panel data covering 36 African countries from 2000 to 2017 to investigate the effects of FDI, remittances and foreign aid on access to electricity. We use a dynamic empirical model based on system GMM to control for unobserved heterogeneity and potential endogeneity of the explanatory variables. The results show that FDI and remittances matter for increasing access to electricity. Also, foreign aid reduces access to electricity. We also find that remittances reduce urban-rural disparities in access to electricity, while FDI and foreign aid increase disparities. Finally, these results remain globally robust when we perform sub-regional analyses.

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  • Mbiankeu Nguea, Stéphane & KAGUENDO, Ulrich Vianney Elisée, 2022. "Are growth effects of foreign capital significant for increasing access to electricity in Africa?," MPRA Paper 111604, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111604
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    2. Stéphane Mbiankeu Nguea & Armand Gilbert Noula & Issidor Noumba, 2024. "Financial Globalization and Democracy: Implications for Economic Growth in African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3355-3379, March.
    3. Armand Totouom & Joseph P. Ngameni & Rosine F. Poumeni, 2024. "Does foreign direct investment promote access to basic services? The case of drinking water in Africa," African Development Review, African Development Bank, vol. 36(2), pages 350-361, June.
    4. Tékam Oumbé, Honoré & Djeunankan, Ronald & Kos A Mougnol, Alice, 2024. "Analysing the effect of foreign aid on industrialization: Evidence from Africa," International Economics, Elsevier, vol. 178(C).
    5. Ekene ThankGod Emeka & Simplice A. Asongu & Yolande E. Ngoungou, 2024. "Gender economic inclusion, governance institutions and economic complexity in Africa," Working Papers of the African Governance and Development Institute. 24/012, African Governance and Development Institute..
    6. Ongo Nkoa, Bruno Emmanuel & Tadadjeu, Sosson & Njangang, Henri, 2023. "Rich in the dark: Natural resources and energy poverty in Sub-Saharan Africa," Resources Policy, Elsevier, vol. 80(C).
    7. Noumba, Issidor & Nguea, Stéphane Mbiankeu, 2023. "Assessing the role of globalization for universal electricity access," International Economics, Elsevier, vol. 174(C), pages 180-195.
    8. Aluko, Olufemi Adewale & Opoku, Eric Evans Osei & Ibrahim, Muazu & Kufuor, Nana Kwabena, 2023. "Put on the light! Foreign direct investment, governance and access to electricity," Energy Economics, Elsevier, vol. 119(C).
    9. Djeunankan, Ronald & Njangang, Henri & Tadadjeu, Sosson & Kamguia, Brice, 2023. "Remittances and energy poverty: Fresh evidence from developing countries," Utilities Policy, Elsevier, vol. 81(C).
    10. Moteng, Ghislain & Raghutla, Chandrashekar & Njangang, Henri & Nembot, Luc Ndeffo, 2023. "International sanctions and energy poverty in target developing countries," Energy Policy, Elsevier, vol. 179(C).
    11. Mbiankeu Nguea, Stéphane, 2024. "Uncovering the linkage between sustainable development goals for access to electricity and access to safely managed drinking water and sanitation services," Social Science & Medicine, Elsevier, vol. 345(C).
    12. Obed I. Ojonta & Jonathan E. Ogbuabor, 2024. "Effects of tourism and institutional quality on infrastructural development in Africa: new evidence from the system GMM technique," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 59(2), pages 101-117, April.
    13. Brice Kamguia & Ronald Djeunankan & Sosson Tadadjeu & Henri Njangang, 2024. "Does macroeconomic instability hamper access to electricity? Evidence from developing countries," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(2), pages 387-414, April.
    14. Mbiankeu Nguea, Stéphane & Hervé Kaffo Fotio,, 2024. "Synthesizing the role of biomass energy consumption and human development in achieving environmental sustainability," Energy, Elsevier, vol. 293(C).
    15. Stéphane Mbiankeu Nguea & Hervé Kaffo Fotio & Louise Angèle Baida, 2022. "Investigating the effects of globalization on economic sophistication in selected African countries," African Development Review, African Development Bank, vol. 34(3), pages 324-338, September.

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    More about this item

    Keywords

    FDI; Remittances; Foreign aid; Access to electricity; System GMM; Africa;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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