Why is Household Electricity Uptake Low in Sub-Saharan Africa?

Abstract

Access to electricity in Sub-Saharan Africa is the lowest in the world, although a larger proportion of the population lives under the grid. This demand-side challenge is likely to be exacerbated with the grid expansion as the areas currently o_-grid are disproportionately more rural and poorer. This paper uses the most recent individual and household level data to examine the determinants of, and barriers to, electricity uptake in Sub-Saharan Africa. It supplements the analysis with qualitative fieldwork in three countries. Regarding the areas under the electricity grid, the paper follows Wodon et al. (2009) to show that demand-side constraints to a large extent explain the low level of electricity access and then proceed to identify the factors that drive uptake both at an individual and community level. Findings suggest that while the level of income remains a primary and consistent driver of uptake, regularity and predictability of income is a key constraint. Additionally, housing quality, independently of the variation in their socio-economic status is a significant determinant of uptake. To extrapolate on the determinant of uptake in areas currently off-grid, shall the grid be extended to those areas, we use Heckman (1976) two stages estimation procedure and several control variables to address selection bias. The analysis reveals that targeting communities that already enjoy higher economic livelihood or communities in which the provision of electrification is likely to induce economic activities is key to achieving high take-up rates and contribute toward the financial viability of the utilities and the sector. Policies such as pre-paid meters, energy-efficient appliance, credit access will address some of the specific constraints. However, the desire for productive use emerging from the qualitative work suggests that electrification efforts may be more successful if bundled with facilities for household to acquire appliances for productive use which has the potential to increase uptake and enhance livelihoods simultaneously.