Energy development and industrialization: evidence from Africa

Purpose The purpose of this study is to analyze the impact of energy development on industrialization in African economies from 1990 to 2017. It aims to assess how access to electricity, energy use and overall energy development contribute to industrial growth. By using panel data analysis and advanced econometric techniques such as fixed effects, two-stage least squares (2SLS) and system-GMM estimation, this study seeks to provide empirical evidence and insights into the complex dynamics between energy policies and industrialization outcomes. The findings are intended to inform policymakers and stakeholders on effective strategies to promote sustainable industrial development in the region. Design/methodology/approach This study uses a quantitative approach using panel data analysis spanning 1990–2017 from various sources. It uses fixed effects, 2SLS and system-GMM estimation methods to investigate the nuanced relationship between energy development and industrialization in African economies. This comprehensive methodology facilitates a robust examination of how different dimensions of energy development influence industrialization outcomes, aiming to fill gaps in existing literature and provide insights for policy formulation and implementation. Findings The findings reveal that energy development significantly enhances industrialization in African economies. Access to electricity and energy use both positively impact industrial growth, with access to electricity showing a stronger influence. This study underscores the critical role of energy infrastructure in fostering industrial expansion and economic development. Moreover, robust econometric methods confirm these relationships across various specifications, highlighting the importance of tailored energy policies to sustain industrialization efforts in Africa. These findings contribute empirical insights to the literature and provide actionable recommendations for policymakers aiming to enhance energy access and promote sustainable industrial development in the region. Originality/value This study contributes to the literature by offering new insights into the relationship between energy development and industrialization in African economies. By using advanced econometric techniques and focusing on nuanced dimensions of energy access and use, it addresses gaps in previous research. The findings underscore the significance of energy infrastructure for industrial growth, highlighting policy implications for sustainable development in Africa. This research adds value by providing empirical evidence that informs strategies to enhance energy efficiency, expand access to electricity and promote industrialization, thus contributing to broader discussions on economic development and energy policy in the region.