Sustainability Burden or Boost? Examining the Effect of Public Debt on Renewable Energy Consumption in Sub-Saharan Africa

Favour Onuoha (), Stephen Dimnwobi (), Kingsley Okere () and Chukwunonso Ekesiobi
Additional contact information
Favour Onuoha: Evangel University Akaeze, Nigeria
Stephen Dimnwobi: Nnamdi Azikiwe University, Awka, Nigeria
Kingsley Okere: Gregory University, Uturu, Nigeria

No 23/031, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: Given that the development of renewable energy is regarded as a sustainable alternative to the realization of environmental quality, it is not surprising that the discussion of the sustainability of the world’s energy sources continues to expand. While renewable energy has a negligible impact on environmental degradation, developing regions like sub-Saharan Africa (SSA) is restricted by the capital-intensive investment requirements of the burgeoning renewable energy market. To explore the significance of available funding sources on renewable energy development in the region, this study investigates the influence of public debt on renewable energy consumption (REC) in a panel of 29 SSA countries, in full and sub-regional categorizations. A combination of the instrumental variable generalized method of moment (IV-GMM) approach and the two-stage least squares estimator was applied to achieve the goal of the study. Overall, our findings indicate that public debt, carbon emission, financial development, and economic growth exert a negative and significant linkage with renewable energy, while urbanization has a positive and significant influence. Aware of the study findings, appropriate policy prescriptions are proposed to improve the debt-financed funding for the development of the renewable energy sector in SSA.

Keywords: Public Debt; Renewable Energy; Financial Development; Economic Growth; Carbon Emission (search for similar items in EconPapers)
Pages: 31
Date: 2023-01
New Economics Papers: this item is included in nep-afr, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Forthcoming: Energy Sources, Part B: Economics, Planning, and Policy

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Working Paper: Sustainability Burden or Boost? Examining the Effect of Public Debt on Renewable Energy Consumption in Sub-Saharan Africa (2023)
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