This chapter examines how fiscal policy influences energy consumption across Africa. Specifically, it discusess fiscal policy and energy consumption in Africa, its enhancing role, development partner support, and challenges governments face in using fiscal tools. We identified that while countries like the Democratic Republic of Congo lead in renewable energy use, others, such as Algeria, remain reliant on fossil fuels, and alternative sources and nuclear energy are still minimal. Fiscal policy tools including subsidies, public investment, and procurement boost energy consumption. Development partners also support these efforts through financial aid, policy dialogue, and technical assistance. However, several challenges hinder progress, including poorly targeted subsidies, limited fiscal space, insufficient investment capital, fragmented regional policies, low public trust, inadequate data systems, and weak institutional capacity. To overcome these obstacles, governments are encouraged to implement targeted tax incentives and investment allowances to promote private sector involvement in off-grid and mini-grid renewable energy initiatives, especially in underserved areas.

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Fiscal Policy and Energy Consumption in Africa

  • Khadijah Iddrisu,
  • Joshua Yindenaba Abor,
  • Simplice A. Asongu

摘要

This chapter examines how fiscal policy influences energy consumption across Africa. Specifically, it discusess fiscal policy and energy consumption in Africa, its enhancing role, development partner support, and challenges governments face in using fiscal tools. We identified that while countries like the Democratic Republic of Congo lead in renewable energy use, others, such as Algeria, remain reliant on fossil fuels, and alternative sources and nuclear energy are still minimal. Fiscal policy tools including subsidies, public investment, and procurement boost energy consumption. Development partners also support these efforts through financial aid, policy dialogue, and technical assistance. However, several challenges hinder progress, including poorly targeted subsidies, limited fiscal space, insufficient investment capital, fragmented regional policies, low public trust, inadequate data systems, and weak institutional capacity. To overcome these obstacles, governments are encouraged to implement targeted tax incentives and investment allowances to promote private sector involvement in off-grid and mini-grid renewable energy initiatives, especially in underserved areas.