Electricity crisis and the effect of CO2 emissions on infrastructure-growth nexus in Sub Saharan Africa

Sub Saharan Africa (SSA) has the greatest proportion of its population without access to electricity, especially those in rural communities. Efficiency of the power sector is another obstacle, characterised by rise in the ratio of electricity transmission and distribution losses (RETDL) and high levels of electricity-related CO2 emissions. In view of these challenges, this study analyses the extent of electricity shortage, efficiency, key sources and opportunities for SSA in comparison with other regions. Two Stage Least Squares (2SLS) is used to examine the economic growth effects of electricity consumption (stock) and RETDL (quality), and how electricity-related CO2 emissions alter the growth contributions of both electricity consumption and RETDL. Our analysis indicate that SSA is mainly coal energy driven while the proportion of renewable energy is very low. Among the solid fuel sources, coal is the major cause of high levels of electricity-related CO2 emissions. The percentage of electricity from renewable sources (excluding hydro) is very low in SSA, second lowest from Middle East and North Africa (MENA). However, the region presents a great opportunity from its abundant renewable resources that can be exploited. Furthermore, electricity consumption has a positive impact on economic growth whereas the RETDL exerts a negative pressure on growth. Thus, deterioration in electricity quality reduces economic growth. High levels of electricity-related CO2 emissions lower the growth contributions of electricity consumption and exacerbate the negative growth impact of electricity quality. For the sake of sustainability and clean energy, SSA must invest substantially in renewable energy, which reduces its reliance on non-renewable energy in the long-term.