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What could explain low uptake of rural electricity programs in Africa? Empirical evidence from rural Tanzania

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  • Ruhinduka, Remidius D.
  • Bensch, Gunther
  • Selejio, Onesmo
  • Lokina, Razack Bakari

Abstract

Increasing electricity access remains a challenge, particularly in rural areas of sub-Saharan Africa. This study examines the case of Tanzania, where rural connection rates remain low even among households residing 'under the grid', and this despite substantial government subsidies for household connections. Using data from 1774 rural households living within reach of the electricity grid, we investigate correlates of the low grid electricity uptake. We find that proxies for wealth, including housing characteristics, are positively associated with connection status, while social network variables are less so. Capacity to pay thus appears to remain a major barrier, and in-house wiring costs emerge as a significant expense unaccounted for by the subsidy scheme, exceeding the cost of grid connection by a factor of eight. We also find that similar mechanisms govern choices between grid electricity and traditional or solar energy sources. Together, these findings inform the ongoing policy debate regarding on-grid versus off-grid energy solutions.

Suggested Citation

  • Ruhinduka, Remidius D. & Bensch, Gunther & Selejio, Onesmo & Lokina, Razack Bakari, 2024. "What could explain low uptake of rural electricity programs in Africa? Empirical evidence from rural Tanzania," Ruhr Economic Papers 1084, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:299233
    DOI: 10.4419/96973259
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    More about this item

    Keywords

    Electrification; household decision; electricity access; Tanzania; energy transition;
    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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