The Nexus between Electricity Generation and Agricultural Development in Africa

Abstract

This study examines the dynamic connections between electricity generation and agricultural development, utilizing dynamic generalized method of moments (GMM) estimation techniques and annual time series data spanning from 2000 to 2020. The findings offer valuable insights into the impact of electricity generation on agricultural progress. Firstly, both electric power generation and energy generation capacity were negatively and significantly linked to agricultural development in Africa. This suggests that despite increases in electric power and energy generation, agricultural development may not improve due to inefficiencies in the energy infrastructure, including inadequate transmission and distribution networks, unreliable grid connectivity, energy losses, and distribution issues that prevent electricity from reaching rural areas where agriculture is predominantly concentrated. Second, further analysis reveals a significant and positive association between electricity consumption, access to electricity, and agricultural development in Africa. This indicates that expanding electricity access and increasing its consumption in agricultural activities can significantly enhance agricultural productivity and growth across the continent. These results emphasize the importance of improving infrastructure and optimizing capacity utilization to ensure that the growth in electricity generation capacity translates into tangible benefits for agricultural development in Africa. Thus, the study underscores the pivotal role of electricity generation, consumption, and access in promoting agricultural development, while highlighting the need to address infrastructure inefficiencies to achieve sustainable growth.