The implication of economic growth, industrialization and urbanization on energy intensity in Sub-Saharan Africa

The aftermath of the 1970 oil price shock coupled with rapid urbanization, rising population growth, industrialization and increased environmental degradation in Sub-Saharan Africa (SSA) have necessitated a paradigm shift of emphasis from energy consumption to a thorough investigation into energy intensity. In spite of this, the evidence for SSA is sparse as both theoretical and empirical literature has not adequately interrogated the effects of urbanization, industrialization and economic growth on energy intensity. Using panel data from 1980 to 2015 covering 36 SSA countries, this study finds answers to this question under the standard Environmental Kuznet Curve (EKC) framework. The system Generalized Method of Moment (GMM) estimation revealed that, in the long run, both urbanization and industrialization tend to increase energy intensity in the 36 selected SSA countries while the contrary is established for FDI and trade openness. Inflation was also found to be associated with rises in energy intensity in SSA. Additionally, our finding confirms the existence of a valid EKC hypothesis for energy intensity; the existence of an inverted U-shaped relationship between economic growth and energy intensity in SSA. Finally, it is observed that the SADC zone of the region, in particular, is exhibiting rising energy intensity as compared to the ECOWAS sub-region. We discuss some policy options that could potentially improve energy efficiency in the sub-region.