Factors that Drive Energy Use in Africa: Panel Data Evidence from Selected Sub‐Sahara African Countries

Sub‐Saharan African (SSA) countries need adequate energy to achieve socio‐economic growth and development. According to recent statistics, only 30 per cent of the entire population have access to power, making the region the highest in the world with people without access to electricity. This is in sharp contrast with the abundant energy resources available, which could be harnessed to provide the needed energy. The purpose of this study is to identify and analyse the determinants of aggregate energy demand in SSA. Reliable secondary macroeconomic and energy data were collected from publicly available and widely used databases. The study uses a panel cointegration technique to examine the determinants of energy demand in SSA, over the period from 1980 to 2014, for selected countries in the region. Our results reveal that income is the predominant factor behind the increase in energy demand in SSA, with the highest elasticity. Furthermore, energy demand in SSA conforms to a priori expectations of a negative price elasticity. The results are in line with the theory of demand. Significantly, we also find that urbanisation an important role for energy demand. Stringent energy conservation policy and other recommendations flow from the findings.