Institutional roles in moderating energy-led growth in African Regional Economic Communities

Abstract

This study examines how institutional factors shaped the link between energy consumption and economic growth across eight African Regional Economic Communities: Arab Maghreb Union (AMU), Community of Sahel-Saharan States (CEN-SAD), Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Economic Community of Central African States (ECCAS), Economic Community of West African States (ECOWAS), Intergovernmental Authority on Development (IGAD) and Southern African Development Community (SAD) from 1996 to 2022. Employing panel methods (Mean Group and Pooled Mean Group) guided by the Hausman test, we find that energy’s impact on growth varies by bloc and institutional context. For example, moderation by absence of violence/terrorism hinders growth in AMU, while rule of law undermines it in ECCAS and SADC. Voice and accountability boost growth in ECOWAS and SADC but inhibit it in ECCAS and IGAD. Regulatory quality, control of corruption, and government effectiveness yield mixed outcomes across regions. A composite institutional index positively moderates energy-driven growth in AMU, COMESA, ECCAS, and SADC. These results highlight that inclusive sustainability hinges on tailored institutional reforms to improve energy efficiency and foster equitable, sustainable economic development across Africa.