Energy consumption and economic development in Sub-Sahara Africa

Sub-Saharan African countries' economic development is dependent on energy consumption. This paper assesses total energy demand, which is composed of traditional energy (wood fuel) and commercial energy (electricity and petroleum), in the Central, East, South, and West regions of Sub-Saharan Africa. Cross-sectional time series data for 20 countries in 25 years are analyzed, and the results of the study show that wood fuel accounts for 70% of energy consumption, followed by petroleum, with most industrial activities utilizing some form of wood fuel. Regression results suggest that energy demand is inversely related to the price of petroleum and industrial development, but positively related to GDP, population growth rate, and agricultural expansion, and that price elasticity is less than one. The model results also show that there are regional differences in energy demand. In addition, the interaction of population growth rates by regions generates mixed results, and there are regional differences in the use of commercial energy consumption, and GDP growth. The findings of this study suggest that countries must diversify their energy sources and introduce energy-efficient devices and equipment at all levels of the economy to improve GDP growth rate and GDP per capita. (C) 2010 Elsevier BM. All rights reserved.