• Energy Research

This research investigates the relationships among renewable energy consumption, economic growth, and financial development in five sub-Saharan African nations utilizing panel data from 2000 to 2020. Econometric methods are used to ascertain the existence or absence of cross-sectional dependence and the short-run and long-run connections between the following factors: Pesaran cross-sectional dependence (CD) and cross-sectionally augmented IPS (CIPS) unit root tests, pooled mean group (PMG), and dynamic ordinary least squares (DOLS) estimations. The presence of cross-sectional dependence is found and represented with the CIPS unit root test. No significant short-run relationship is found between the variables of the study, yet a significant long-run relationship is present among them. A positive relationship exists between CO2 emissions and financial development, while financial development and renewable energy consumption are found to have negative relationships with CO2 emissions. The study also supports the scale effect of the environmental Kuznets curve hypothesis. Additionally, no causality is found among the variables, and impulse response and variance decomposition estimation are carried out to recommend future effects. Policy implications of findings are discussed, with accompanying suggestions.

In line with the global call for alternative sources of energy rather than conventional fossil-based sources, research in the area of renewable energy, energy efficiency, and sustainability seems to have intensified in Africa in the last five years. As a form of a contribution to the existing body of knowledge, this study seeks to parametrically estimate the effects of renewable energy consumption and environmental sustainability on economic growth in Africa. Using panel data, for thirty-seven African countries, and employing the system Generalized Method of Moments estimation technique which more efficiently solves the problems of endogeneity and omitted variable bias than least squares and causal estimation method, this study found that renewable energy adoption and development will lead to an increase in economic growth in Africa, both in the long run and short run as a one percent increase in renewable energy consumption will lead to 0.07% and 1.9% increases in economic growth in both the short-run and long-run, respectively The study also found that environmental sustainability through a reduction of emission may not be Africa’s priority towards achieving an all-inclusive development at present because the coefficient of CO2 emission in the study is not statistically significant. Therefore, African countries’ governments should intensify efforts towards developing the renewable energy sector, especially using policy instruments, while also harnessing the already mature nonrenewable industry for more rapid growth in the continent and the attainment of Agenda 2063.