How Does Electricity Generation Affect Economic Growth? Empirical Evidence from 30 African Countries

The main objective of this study is to empirically investigate the impact of electricity generation on the economic growth of 30 African countries over the period 1990 to 2020 through Panel Autoregressive Distributed Lag-Pooled Mean Group (ARDL-PMG) data analysis. Using Pedroni's test for cointegration, we confirmed the presence of cointegration among the variables. The findings of the study reveal that electricity generation has a positive long-run impact on economic growth over the study period consideration. Furthermore, the study findings indicate that industrial output, foreign direct investment inflows, and inflation have a significant impact in the long run on economic growth in these nations. Moreover, the study applied Dumitrescu & Hurlin (2012) causality test and confirmed a one-way causality from economic growth to electricity generation. Based on the empirical evidence, decision-makers can formulate solid policies to impact the African electricity industry based on important economic policy implications