What Could Explain Low Uptake of Rural Electricity Programs in Africa? Empirical Evidence from Rural Tanzania

Remidius Denis Ruhinduka (), Gunther Bensch, Onesmo Selejio and Razack Lokina

No 20-30, EfD Discussion Paper from Environment for Development, University of Gothenburg

Abstract: Despite the great strides by the government of Tanzania in bolstering access to electricity in rural areas under its Rural Energy Agency (REA), rural connection rates have remained low. A substantial fraction of households residing “under the grid” remains unconnected despite the considerable state subsidy of this program. This study investigates the reasons for low uptake of seemingly highly subsidized, productive and modern energy. Using both bivariate and multivariate logit, we find that the distance between the household and the nearest electric pole matters. Households living farther away incur connection costs (associated with purchasing additional poles) beyond the subsidized price. Consistent with other energy literature, we find that both housing characteristics (e.g. size of dwelling, wall and roofing materials) and socio-economic characteristics (e.g. income, remittances and social network status) correlate with the decision to accept an electricity connection.

Keywords: electrification; household decision; Tanzania; multinomial logit analysis (search for similar items in EconPapers)
JEL-codes: D12 O13 O33 Q41 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2020-09-01
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunefd:2020_030

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