Output, renewable energy consumption and trade in Africa

We use panel cointegration techniques to examine the relationship between renewable energy consumption, trade and output in a sample of 11 African countries covering the period 1980–2008. The results from panel error correction model reveal that there is evidence of a bidirectional causality between output and exports and between output and imports in both the short and long-run. However, in the short-run, there is no evidence of causality between output and renewable energy consumption and between trade (exports or imports) and renewable energy consumption. Also, in the long-run, there is no causality running from output or trade to renewable energy. In the long-run, our estimations show that renewable energy consumption and trade have a statistically significant and positive impact on output. Our energy policy recommendations are that national authorities should design appropriate fiscal incentives to encourage the use of renewable energies, create more regional economic integration for renewable energy technologies, and encourage trade openness because of its positive impact on technology transfer and on output. - Highlights: • We examine the relationship between renewable energy consumption, trade and output in African countries. • There is a bidirectional causality between output and trade in both the short and long-run. • In the short-run, there is no causality between renewable energy consumption and trade or output. • In the long-run, renewable energy consumption and trade have a statistically significant positive impact on output. • African authorities should encourage trade openness because of its positive impact on technology transfer and on output