Energy, Population, and Development: Understanding Growth Determinants in Sub-Saharan Africa

Abstract

This study examines the determinants of economic growth within the energy–growth–environment nexus in Sub-Saharan Africa by integrating endogenous growth theory, human capital theory, and structural transformation perspectives. Using panel data for 40 Sub-Saharan African countries over the period 1990 to 2024, obtained from the World Bank and international energy databases, the analysis evaluates the roles of energy consumption, human development, labour dynamics, population growth, and foreign direct investment in shaping economic performance. A dynamic panel data approach is employed, incorporating descriptive statistics, panel unit root tests, and cross-sectional dependence diagnostics. The core estimation is conducted using the Sequential Two-Stage Generalized Method of Moments to address endogeneity, heterogeneity, and dynamic adjustments. The results reveal the presence of significant cross-sectional dependence and mixed integration properties among variables, justifying the use of advanced panel techniques. Empirical findings indicate that human development exerts a strong and statistically significant positive effect on economic growth, highlighting the critical role of education, health, and skills in enhancing productivity and innovation. Labour force participation contributes positively, while unemployment negatively affects growth, reflecting labour market inefficiencies. In contrast, energy consumption, population growth, and foreign direct investment exhibit statistically insignificant effects, suggesting that their contributions depend on structural conditions, efficiency, and absorptive capacity. Furthermore, the insignificance of lagged growth variables indicates weak persistence and volatility in economic performance across the region. The study demonstrates that economic growth in Sub-Saharan Africa is primarily driven by human capital development rather than energy expansion, emphasizing the importance of structural reforms and institutional strengthening for sustainable growth.