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

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

No 1084, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

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.

Keywords: Electrification; household decision; electricity access; Tanzania; energy transition (search for similar items in EconPapers)
JEL-codes: D12 O13 O33 Q41 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-dev and nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:299233

DOI: 10.4419/96973259

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