Towards achieving inclusive energy in SSA: The role of financial inclusion and governance quality

Energy poverty is a serious impediment to achieving Sustainable Development Goal 7 (SDG-7), thereby compelling policymakers and the scientific community to make collaborative commitments to address energy issues worldwide. While there is growing debate on the prevalent determinants of energy poverty, the empirical scrutiny of the contributing role of financial inclusion and governance quality remains elusive in existing literature. Therefore, this study investigates the impact of financial inclusion and governance quality on energy poverty in 29 sub-Saharan Africa (SSA) spanning 2004–2022. The empirical analysis was accomplished using the Augmented Mean Group (AMG) and Common Correlated Effects Mean Group (CCEMG) techniques with the Driscoll-Kraay standard error (DKSE) approach as a robustness check. The empirical outcomes indicate that a well-developed financial system that fosters easy and quick access to credit, especially among marginalized households, leads to the affordability of modern energy resources, thereby ameliorating energy poverty in the region. Additionally, the findings demonstrate the undeniable role of good governance in fostering a sound and inclusive financial system that enables households to access energy resources, ultimately reducing energy poverty in the region. Based on these outcomes, this study proposes important policy insights for the design and implementation of inclusive financial and energy policies.