Electrification, regulation and electricity access backlogs: regional development and border discontinuities across African power pools

Abstract

Faced with decaying networks, poor revenue collections, and substantial sunk costs and operating losses, over the last two decades, many developing countries have embarked on electricity sector reforms. This analysis examines factors driving the lack of household access to electricity in sub-Saharan Africa, including poor basic infrastructure, inadequate incentives in public service policies, geophysical barriers, and constraints in institutional environment. Based on cross-region panel datasets from Demographic and Health Surveys of 31 African countries between 2003 and 2018, a general-to-specific model selection procedure is applied to parametric regressions, with special attention to border discontinuities between power trading agreements and related border region effects. The chosen specifications are replicated in beta-function generalised linear models and kernel regressions, which specifically account for upper and lower bounds in the dependent variable. The econometric results turn out to be fairly robust to different estimation methods and data panels and suggest that sector restructuring and regional power integration initiatives have contributed to reducing the percentage shares of households without electricity access. However, remoteness from agglomeration economies of major urban centres and lack of substantive improvements in the grid and off-grid networks between neighbouring power trading pools have left many regions lagging behind, particularly in Central Africa. Programmes of poverty alleviation, including electricity services, should be more carefully targeted by strengthening local infrastructure development, access to modern energy, and cross-border integration within and between African regional power pools.