Energy investments and sustainable development in Africa
| Published date | 01 August 2010 |
| Pages | 243-252 |
| Date | 01 August 2010 |
| DOI | https://doi.org/10.1108/20425945201000015 |
| Author | John Adams |
| Subject Matter | Public policy & environmental management |
World Journal of Science, Technology & Sustainable Development, Vol. 7, No. 3, 2010
243
Copyright © 2010 WASD
Abstract: There is no lack of energy sources in Africa – especially fossil fuels –
however many countries in Sub-Saharan Africa continue to be plagued by energy
shortages. This can seriously impede productivity particularly in SME’s and add
to energy costs through the need for investment in own generating capacity. In
addition the transmission systems are often expensive due to ‘down time’ and this
also raises production costs. It also raises costs for households that are effectively
forced to generate their own power. This chapter examines three dimensions of the
energy ‘gap’ in the context of a number of countries. First, will investment in energy
capacity lead to sustainable GDP growth? Second, would investment in renewable
or ‘green’ energy capacity make a significant difference? And third, is energy output
really such an essential prerequisite for sustainable economic growth?
Keywords: Africa; energy; investment; GDP; economic growth.
John Adams*
Edinburgh Napier University, UK
ENERGY INVESTMENTS AND
SUSTAINABLE DEVELOPMENT IN AFRICA
INTRODUCTION
This chapter examines three dimensions of
the energy ‘gap’ in the context of a number
of countries. First, will investment in energy
capacity lead to sustainable GDP growth?
Second, would investment in renewable or
‘green’ energy capacity make a significant
difference? And third, is energy output re-
ally such an essential prerequisite for sus-
tainable economic growth?
For many years the relationship between
energy outputs and economic growth and
energy consumption and economic growth
have been examined from a number of
perspectives (see for example Hannesson
(2009); Wold-Rufael (2005); Lee (2005)
Squalli (2007); Yui and Choi (1985). A
review of these studies and others raises a
fundamental problem – the evidence sup-
porting a positive relationship between
energy production or consumption and eco-
nomic growth (and vice versa) is so contra-
dictory that today we remain largely unsure
of the true relationship that exists between
them, if indeed a relationship exists at all.
Even where a ‘relationship’ is supported
by the econometric models it is usually
weak, has very low explanatory and predic-
tive power and fails to demonstrate any clear
direction of causality. In other words, it can
only be concluded that we still do not un-
derstand to any significant extent the role
of energy in promoting economic growth.
Therefore calls to cut energy production
and consumption in the interests of the en-
vironment may be very well intentioned but
also could have a very negative effect on the
* School of Accounting and Economics, Edinburgh Napier University, Room: 3/40, Craiglockhart Campus,
Edinburgh, EH14 1DJ, UK, j.adams@napier.ac.uk
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