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Sustainability Burden or Boost? Examining the Effect of Public Debt on Renewable Energy Consumption in Sub-Saharan Africa

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Listed:
  • Favour C. Onuoha

    (Evangel University Akaeze, Nigeria)

  • Stephen K. Dimnwobi

    (Nnamdi Azikiwe University, Awka, Nigeria)

  • Kingsley I. Okere

    (Gregory University, Uturu, Nigeria)

  • Chukwunonso Ekesiobi

    (Igbariam, Nigeria)

Abstract

Given that the development of renewable energy is regarded as a sustainable alternative to the realization of environmental quality, it is not surprising that the discussion of the sustainability of the world’s energy sources continues to expand. While renewable energy has a negligible impact on environmental degradation, developing regions like sub-Saharan Africa (SSA) is restricted by the capital-intensive investment requirements of the burgeoning renewable energy market. To explore the significance of available funding sources on renewable energy development in the region, this study investigates the influence of public debt on renewable energy consumption (REC) in a panel of 29 SSA countries, in full and sub-regional categorizations. A combination of the instrumental variable generalized method of moment (IV-GMM) approach and the two-stage least squares estimator was applied to achieve the goal of the study. Overall, our findings indicate that public debt, carbon emission, financial development, and economic growth exert a negative and significant linkage with renewable energy, while urbanization has a positive and significant influence. Aware of the study findings, appropriate policy prescriptions are proposed to improve the debt-financed funding for the development of the renewable energy sector in SSA.

Suggested Citation

  • Favour C. Onuoha & Stephen K. Dimnwobi & Kingsley I. Okere & Chukwunonso Ekesiobi, 2023. "Sustainability Burden or Boost? Examining the Effect of Public Debt on Renewable Energy Consumption in Sub-Saharan Africa," Working Papers 23/031, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:23/031
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    References listed on IDEAS

    as
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    Cited by:

    1. Okere, Kingsley Ikechukwu & Dimnwobi, Stephen Kelechi & Ekesiobi, Chukwunonso & Onuoha, Favour Chidinma, 2023. "Turning the tide on energy poverty in sub-Saharan Africa: Does public debt matter?," Energy, Elsevier, vol. 282(C).
    2. Haider Mahmood & Ateeq ur Rehman Irshad & Muhammad Tanveer, 2024. "Do innovation and renewable energy transition play their role in environmental sustainability in Western Europe?," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-9, December.

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    Keywords

    Public Debt; Renewable Energy; Financial Development; Economic Growth; Carbon Emission;
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