Output, renewable energy consumption and trade in Africa

We use panel cointegration techniques to examine the relationship between renewable energy consumption, trade and output in a sample of 11 African countries covering the period 1980-2008. The results from panel error correction model reveal that there is evidence of bidirectional causality between output and exports and between output and imports in both the short-run and the long-run. However, in the short-run, there is no evidence of causality between output and renewable energy consumption and between trade (exports or imports) and renewable energy consumption. In the long-run, the FMOLS panel approach estimation shows that renewable energy consumption and trade (exports or imports) have a statistically significant and positive impact on output. Policies recommendations are that, in the long-run, international trade enables African countries to benefit from technology transfer and to build the human and physical capacities needed to produce more renewable energies, which in turn increases their output.