Economic Growth and Energy Intensity in Sub-Saharan Africa

Abstract

Energy use is the primary source of greenhouse gas (GHG) emission from the industrial sector with carbon dioxide (CO2) accounting for more than 90 per cent of CO2 equivalent of GHG, globally and in most countries. The fact that the Sub-Saharan African countries only contribute 4% of global greenhouse gas emissions does not in any way diminish the dangers that climate change poses to the region. Reduction in energy intensity has been advocated as a means of mitigating climate change and energy insecurity. Using a panel data spanning 1990-2015, this study investigates the energy intensity and economic growth relationship, causality, and convergence patterns in Sub-Saharan Africa. The Generalised Methods of Moments model estimation shows a strong negative relationship between energy intensity and economic growth. The Granger-causality test revealed a unidirectional causality from economic growth to energy intensity. The study uses conditional beta and sigma convergence criterion to test for convergence in the region, and the results revealed that it is converging to a lower rate of energy intensity. The study, therefore, recommends that policies that will increase growth are implemented.