Addressing the Challenges of Sustainable Electrification in Africa through Comprehensive Impact Evaluations
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Date
2021-10-04
Authors
Muchapondwa, Edwin
Jeuland, Marc
Shimeles, Abebe
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
Access to electricity leads to overall economic growth through improved agricultural
and firm productivity, public service delivery, and enhanced household investment
in human capital, net income, and general quality of life. Yet more than 540 million
people in Africa still lack electricity today, and many more suffer from unreliable power
supply. The considerable untapped renewable energy potential, and the associated
rapid reductions in cost, make sustainable and decentralized electricity service a
promising option for the continent, for transforming these deficits into opportunities.
However, knowledge on how to finance and implement new models of electrification
remains limited, because the results from prior impact evaluations are inconclusive
and do not cover all relevant interventions or dimensions. Following a review of
policy and research issues, we propose that five essential principles should guide
future research efforts in this domain: (i) use of mixed/multi methods that adequately
cover the varied implications of electricity access, (ii) choice of econometric methods
that provide more credible estimates of impacts, (iii) use and combinations of more
informative treatment data, (iv) careful theorizing and consideration of the potential
for heterogeneous treatment effects, and (v) accounting for effects from treatments
of different magnitudes. We demonstrate the last three of these with an illustrative
application of the World Bank Multi-Tier Framework data for Kenya. New insights
emerge as research moves from a focus on average treatment effects to heterogeneous
and multi-valued treatment effects. Notably, the impacts of electrification may
depend on the extent to which households and other economic agents can make
complementary investments to benefit from an electricity connection. Thus,
electrification may need to be combined with complementary programmes, for
example, those that make appliances more accessible and affordable. A greater focus
on holistic impact evaluation approaches is needed to make economic research on
sustainable electrification more informative and policy-relevant.