The Impact of Economic Indicators on Renewable Energy Consumption in Southern Africa: Evidence from Residual Augmented Least Squares Cointegration and Method of Moments Quantile Regression Models

Renewable energy has emerged as a transformative and essential alternative in the global energy sector. Many countries are striving to achieve the Sustainable Development Goals (SDGs) established by the United Nations for 2030, particularly the goal of ensuring that all individuals have access to clean and affordable energy. This paper re-examines the impact of economic growth (EG), trade openness (TO), exchange rates (ER), foreign direct investment (FDI), green finance (GF), and oil prices (OL) on renewable energy consumption (REC) across 14 Southern African countries: South Africa, Botswana, Lesotho, Namibia, Tanzania, Madagascar, Mauritius, Kenya, the Comoros, Zambia, Eswatini, Rwanda, Angola, and Mozambique, during the period of 2000 to 2022. This study employed cointegration and unit root tests, as well as the RALS-EG and MMQR models, to estimate the long-run relationships among the variables. The results reveal that renewable energy consumption is positively and directly related to economic growth, trade openness, exchange rates, green finance, and foreign direct investment across all quantiles (q05–q95), with no evidence of asymmetric effects. These findings suggest that economic growth, green finance, and foreign direct investment are crucial for fostering renewable energy innovation in Southern African countries. Policymakers are encouraged to prioritize strategies that enhance these factors as a foundation for achieving sustainable energy solutions.