New Evidence on the Impact of Energy Poverty on Industrial Performance in Africa

ABSTRACT Industrialisation is essential for Africa's long‐term development, offering a pathway to economic diversification, employment creation and resilience to external shocks. Given the continent's demographic and structural challenges, transitioning to higher value‐added, technologically advanced industries is a necessity. However, energy poverty remains a major obstacle to industrialisation in Africa. As energy is critical to all stages of industrial production, the lack of reliable, affordable and sustainable electricity constrains industrial growth. Against this backdrop, this study analyses the effects of energy poverty on industrial performance across 33 African countries over the period 1996–2020, using the System Generalized Method of Moments (SGMM) approach. Through a series of robustness checks, the results indicate that reducing energy poverty has a positive and statistically significant impact on industrial performance in Africa. These results re‐affirm the importance for African countries to improve the accessibility and availability of energy to support industrialisation and economic development.