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http://dx.doi.org/10.20522/APJBR.2021.5.2.19

Determinants of energy efficiency in Sub-Saharan Africa  

Acquah, Patience Mensah (Jiangsu university, School of Finance and Economics)
Sun, Huaping (Jiangsu university, School of Finance and Economics)
Alemzero, David Ajene (Jiangsu university, School of Finance and Economics)
Li, Liang (School of Business, Nanjing University of Information Science and Technology)
Publication Information
Asia Pacific Journal of Business Review / v.5, no.2, 2021 , pp. 19-44 More about this Journal
Abstract
Sub Saharan Africa (SSA) is receiving increased investments in the energy sector under the belt and road initiative (BRI) project since its inception in 2013. SSA has a worse energy efficiency ratio coupled with deficient electricity access, through analysis showed varied impacts on the SSA countries due to the BRI initiative. This study dilves into the influencing factors for Energy Efficiency (EE) in 38 SSA countries, applying the probit and logit approach for 2000-2018. The Multiple-regression model shows significant results of some variables such as foreign direct investment, gross domestic product, and port infrastructure quality being significant on EE under BRI initiative countries. However, the logit and probit models produce similar results and the marginal effect for the entire variable, except energy imports that do not likely impact EE. Furthermore, the interaction of quality of port infrastructure and foreign direct investment variables produces significant results, highlighting the increased investments SSA receives under the BRI initiative in the energy and transport sectors. The model Percent correctly predicted (PCP) value was about 84%, indicating it correctly classified the variables and about 16% not classified. The study recommends EE performance standards should be incorporated on energy projects in SSA to ensure that these projects are energy efficient and decouple SSA's energy demand from economic growth. The research proffers suggestions for policy regarding the BRI initiative in SSA and the implications on sustainable energy and building a community with a shared future.
Keywords
Energy Efficiency; Environmental Sustainability; Foreign Direct Investments; Sub Saharan Africa;
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