Electricity Access and Agricultural Productivity in Sub-Saharan Africa: Evidence from Panel Data

Abstract

The agriculture sector plays an important role in rural and economic development as well as the attainment of poverty reduction and the Sustainable Development Goals (SDGs) in sub-Sahara Africa (SSA). However, the productivity of the sector-measured as the share of agriculture value added in GDP-has witnessed gradual but consistent decline in recent years. Various studies have been conducted on the role of infrastructure in boosting agricultural productivity but most of the studies on electricity infrastructure have approached the subject from an impact evaluation and micro-level analysis. This study differs by examining the impact of electricity access on agricultural productivity from a cross-country and macro perspective. It investigates the factors influencing the trend of agricultural productivity in SSA countries, and specifically examines the impact of electricity access in boosting agricultural productivity. Using panel cointegration and random effect on a panel of 45 SSA countries (1980-2017), we investigate the impact of overall, urban and rural electricity access on agricultural productivity in SSA. The study finds that while overall and urban electricity access have positive and significant impacts on agricultural productivity, the effect of rural electrification is insignificant. This implies that promoting rural electrification might not be sufficient for enhancing agricultural productivity in SSA. Rather, policymakers should focus on electricity infrastructure intervention that supports the entire agricultural value chain.