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Fiscal Policy and Energy Consumption in Africa

Author

Listed:
  • Khadijah Iddrisu

    (Accra, Ghana)

  • Joshua Yindenaba Abor

    (Legon, Ghana)

  • Simplice A. Asongu

    (Johannesburg, South Africa)

Abstract

This chapter examines how fiscal policy influences energy consumption across Africa. While countries like the DR. Congo lead in renewable energy use, others, such as Algeria, remain reliant on fossil fuels, and alternative sources and nuclear energy are still minimal. Fiscal policy tools including subsidies, public investment, and procurement boost energy consumption. Development partners also support these efforts through financial aid, policy dialogue, and technical assistance. However, several challenges hinder progress, including poorly targeted subsidies, limited fiscal space, insufficient investment capital, fragmented regional policies, low public trust, inadequate data systems, and weak institutional capacity. To overcome these obstacles, governments are encouraged to implement targeted tax incentives and investment allowances to promote private sector involvement in off-grid and mini-grid renewable energy initiatives, especially in underserved areas.

Suggested Citation

  • Khadijah Iddrisu & Joshua Yindenaba Abor & Simplice A. Asongu, 2026. "Fiscal Policy and Energy Consumption in Africa," Working Papers 26/030, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:26/030
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    File URL: http://publications.excas.org/RePEc/exs/exs-wpaper/30.Ch.-8-fiscal-policy-and-energy-consumption-in-Africa.pdf
    File Function: Revised version, 2026
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