On the Determinants of Energy Poverty in Sub-Saharan Africa

The objective of this paper is to empirically analyze the problem of energy poverty in developing countries in general and in SSA countries in particular. In doing so, we identify major variables, and analyze their potential contribution in shaping the level of EP. We undertake this analysis within a South-South framework, which enables us to compare the determinants of EP particular in SSA and other developing regions. This paper sheds light on the determinants of electricity access in developing countries and pays particular attention to why sub-Saharan African countries have been comparatively unsuccessful in providing electricity to its population, despite reforms in the electricity sector. We find that some factors underlying electricity access in developing countries have a different impact in sub-Saharan Africa (SSA). Specifically, the marginal benefit from increased gross domestic savings, which commonly constitutes the bulk of capital used to finance energy projects, is less in SSA than in non-SSA developing countries, while a SSA country, with the same percentage of rural population, has, on average, a lower electrification rate than a non-SSA country. Our results support the importance of institutional quality and we suggest for policy makers to encourage an adequate portion of savings to be channelled towards the electricity sector. Furthermore, they highlight the importance of reforms with a strong focus on providing electricity access to the rural poor.