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Decoupling energy consumption from economic growth in Africa: the role of sectoral energy efficiency and economic structural change

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  • Yang Liu

    (World Bank)

  • Weiwei Huang

    (Zhejiang Normal University)

  • Taoyuan Wei

    (CICERO Center for International Climate Research)

  • Brantley Liddle

    (National University of Singapore)

Abstract

This study examines how sectoral energy efficiency and structural economic transformation contribute to reducing energy consumption using decomposition and panel regression methods based on data from 22 African countries between 1990 and 2017. The results reveal that improvements in sectoral energy efficiency and changes in economic structure led to reductions in energy demand by 22% and 18%, respectively, offsetting a projected 20% increase in final energy consumption across the agriculture, industry, and services sectors. Regression analysis further confirms that economic growth is a major driver of total energy consumption and its components—activity scale, efficiency, and structural composition. Additionally, imports were associated with reduced domestic energy use, while exports were linked to increased energy intensity. Other influential factors include urbanization, energy prices, electricity access, renewable energy uptake, and foreign direct investment, with their impacts varying by geography, income group, and oil production status.

Suggested Citation

  • Yang Liu & Weiwei Huang & Taoyuan Wei & Brantley Liddle, 2025. "Decoupling energy consumption from economic growth in Africa: the role of sectoral energy efficiency and economic structural change," Economic Change and Restructuring, Springer, vol. 58(4), pages 1-34, August.
    • Handle: RePEc:kap:ecopln:v:58:y:2025:i:4:d:10.1007_s10644-025-09908-w
    DOI: 10.1007/s10644-025-09908-w
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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