Power outages, hydropower and economic activity in Sub-Saharan Africa

[摘要] Many Sub-Saharan African economies experienced high growth rates over the last decade, a welcome change from the depression and stagnation which characterized them during the 1980s and 1990s. However, improved economic performances were mostly driven by an increase of both price and demand for the natural resources of which the continent is rich, so that these growth rates were not associated with a significant increase in industrial diversification. The poor quality of the power infrastructure of many African economies represents one of the major obstacles to their structural transformation. In this thesis we investigate the effects of an unstable power supply on the profitability of Sub-Saharan African firms. To avoid estimation issues related to the possible endogeneity of the relationship between power supply and productivity we develop an instrument based on the water available for hydropower production. Our results show that frequent power outages are indeed a very significant drag on firms’ performance, much more so for firms without access to back-up capacity than for the overall sample. The final part of the thesis also investigates the general relationship between hydropower production and economic activity in Sub-Saharan Africa through the use of night-light data.

[发布机构] University:University of Birmingham;Department:Birmingham Business School, Department of Economics

[关键词] D History General and Old World;DT Africa