Decentralized renewable energy - an enabler for development in the agriculture sector in rural areas of Sub-Saharan Africa?

Abstract

The majority of the globally poor population, characterized by agricultural dependency as well as energy poverty, is located in Sub-Saharan Africa. Previous research states that energy benefits agriculture sectors. One reason why the agrarian society lacks access to electricity is because of the insufficient infrastructure in the remote areas. Therefore, this paper aims to investigate whether off-grid solar photovoltaics could possibly be a suitable way to make electricity available for a larger number of people in Sub-Saharan Africa, in order to increase agricultural production. Based on the theory by Solow and Swan (1956), we treat electricity as a new technological change in the production function, which underlies the regression models in the study. We use state-level panel data between the years 2000 and 2021 for all African countries and divide the sample into a subsample only containing Sub-Saharan countries. Our results could not estimate any statistically significant impact of installed capacity of off-grid solar photovoltaics on rural electrification as well as agriculture production. This contradicts the findings in previous literature. To capture the causal effect of off-grid electricity on agriculture outcome in rural areas, further research us