Energy Consumption and Manufacturing Performance: Evidence from Panel Data for Low-Income Sub-Sahara African Countries.

Abstract

This paper examined the effect of energy consumption, capital and labour on manufacturing industry performance using panel data for the sample of seven low-income sub-Saharan Africa (SSA) countries during the period 1990-2012. The panel cointegration test provided evidence of cointegration among the variables for the seven low income-income SSA countries. The Fully Modified Ordinary Least Square (FMOLS) result indicated that energy consumption and capital formation are positively significant variables in explaining the performance of the manufacturing industry in the seven low-income SSA countries. Conversely, labour was insignificant in explaining manufacturing industry performance. For that, strong energy policy that will enhance efficient and sustainable energy supply should be put in place to enhance energy consumption in SSA countries.