Addressing Energy Poverty in Africa: The Role of Institutional Quality, Trade Openness, and Financial Development in Enhancing Access to Clean Fuels and Technologies

Energy poverty remains a significant issue in Africa. To address this, the African Union has adopted the African Common Position on Energy Access and Just Energy Transition, aiming to increase universal access to clean energy across the continent. However, studies in Africa that inform policy formulation toward this goal are limited. This study examines the role of institutional quality and financial sector development in improving access to clean fuels and technologies in Africa. Using data from 32 countries covering the period 2002–2021, the analysis was conducted using fully modified ordinary least squares (FMOLS) and quantile regression techniques. The findings indicate that financial development, trade openness, and institutional quality positively influence access to clean fuels and technologies, with trade openness and income also playing key roles. Financial development has a stronger impact at lower quantiles, whereas trade openness, income, and urbanization have a greater effect at higher quantiles. The influence of institutional quality is heterogeneous, but it enhances the effects of urbanization, financial development, and trade openness. Additionally, financial development strengthens the impact of trade openness. These results highlight the importance for policymakers to focus on strengthening institutions and promoting financial development to increase energy access.