Renewable Energy, Financial Openness and Economic Growth in Africa: A Causality Test Approach

Abstract

The study examined relationship among renewable energy, financial openness and economic growth in Africa using annual data spanning from 1990 to2023. The study employed econometric tool of Panel Pairwise Granger Causality test to estimate the nexus among these variables. The results of this study revealed that there is a bi-directional relationship between REC and GDP growth rate. The result also exhibited a unidirectional relationship between CAPSTO & GDP growth rate while other variables like FDI, EMI, OILP, and HUMCAP have no causal relationship with GDP growth rate. In line with the findings of this study, governments of the selected African countries should embark on technological innovation that can ensure universal access to affordable, reliable, sustainable and modern energy. Besides, efforts should be geared by the policy makers of the selected African countries in putting in place policy measures that can encourage the development and also the boosting of clean energy such as solar energy, biomass fuel, wind energy, etc. in the selected African countries as a way to mitigate the health hazards coming from carbon dioxide emission.