Electricity Consumption And Manufacturing Output In Sub-Saharan Africa: A Regional Comparative Panel Analysis (1995-2024)

Abstract

This paper examines whether electricity consumption's effect on manufacturing output in Sub-Saharan Africa (SSA) is uniform across the region or conditioned by structural differences between its subregions. Using annual panel data (1995-2024) for fifteen SSA countries across East, West, Central, and Southern Africa, the study applies second-generation panel techniques Pesaran's crosssectional dependence test, the CSADF panel unit root test, Westerlund cointegration, and the CS-ARDL/PMG estimator separately to each sub-region. The results reveal marked heterogeneity: electricity consumption has a positive and significant effect on manufacturing output in East, West, and Southern Africa, both short- and long-run, but a negative and insignificant effect in Central Africa. Institutional quality (rule of law) significantly strengthens the relationship in West Africa but is negatively associated with manufacturing output in Central Africa. The findings show that the electricity-manufacturing nexus in SSA cannot be meaningfully understood or acted upon by policy at the regional level alone, since sub-regional infrastructural and institutional differences alter both the sign and significance of the relationship. The paper concludes with region-differentiated policy recommendations.