Date of Award

2025

Document Type

Open Access Master's Thesis

Degree Name

Master of Science in Applied Natural Resource Economics (MS)

Administrative Home Department

College of Business

Advisor 1

Gary Campbell

Advisor 2

Emanuel Xavier Oliviera

Committee Member 1

Chelsea Schelly

Abstract

This study investigates the impact of renewable energy consumption (REC) on African economy, and particularly the moderating effect of institutional quality. Since the world remains concerned with sustainability and its heavy reliance on fossil fuels, it is relevant to determine the economic impacts of REC. Using Driscoll-Kraay Fixed Effects Standard Estimate (DKSE) on a panel data of 49 African countries from 1974 to 2023, the findings indicate that there is a statistically significant low negative correlation between REC and economic growth, suggesting that higher dependence on renewable energy tends to be associated with slower economic performance in Africa based on the data. This does not mean Africans must reduce REC to improve their economy but to encourage them increase energy infrastructure. The moderating effect of institutional quality determinants which include control of corruption, regulatory quality, and rule of law is nevertheless important. Nations with better institutions tend to have higher economic returns on investment in renewable energy, while the nations with weaker institutions have inefficiencies and bottlenecks towards effective implementation. The study emphasizes policy intervention not just to render the use of renewable energy convenient, but also to enhance institutions of governance to gain economic benefits to the extent possible. The findings have long- term policy implications for policymakers, investors, and development agencies that are keen on maintaining sustainable economic development in Africa.

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