Renewable Energy, Financial Development and Real Per Capita GDP Growth in African Countries1

Abstract

This study examines the interrelation among renewable energy production, financial development and economic growth in 32 selected African countries for the period of 1996 to 2018. These countries are categorized on the basis of oil rich and non-oil rich as well as income levels. The study employs Pooled Mean Group, Augmented Mean Group and Dynamic OLS and key findings are established. The study reveals a positive and significant renewable energy-economic growth relationship in all the different groups. Financial development is found to improve economic performance in all categories except in non-oil rich African countries. This study thus recommends the restructuring of the energy pricing system, provision of long-term finance, adoption of risk mitigation instruments, improved institutional framework for private participation in renewable energy infrastructural development for growth sustainability in Africa.