Impacts of Rural Electrification Revisited: The African Context

The investment requirements to achieve the United Nations? universal electricity access goal by 2030 are estimated at 640 billion US Dollars. The assumption underlying this goal is that electrification contributes to poverty alleviation in many regards. In recent years, a body of literature has emerged that widely confirms this positive poverty impact assumption. Most of these studies, however, are based on data from Asia and Latin America. This paper challenges the transferability of impact findings in the literature to the African context. Using a unique data set that we collected in various African countries we suggest that impact expectations on income, education, and health should be discounted considerably for Africa. In many cases, the low levels of electricity consumption can also be served by low-cost solar alternatives. To ensure cost-effective usage of public investments into rural electrification, we call for careful cost-benefit comparisons of on-grid and off-grid solutions. JEL Classification: O33, P46, Q41.