FEEM Research Seminar on “Energy Infrastructure in Sub-Saharan Africa: a Firm Level Analysis”
12:30 - 14:00
Installed generation capacity, average electricity access and per capita electricity consumption are the world lowest across the African continent, while the level of electricity disservice the highest. There is no doubt that this situation is playing an important role in dampening structural transformation in several African economies. The paper aim to assess the extent to which electricity disservice affects firm’s productivity in different African economies. To avoid problems of endogeneity, we construct an instrument for outages based on the varying share of electricity produced through hydro-power plants in different countries. Given the scarcity of public data about power generation in the continent, we directly estimate it through river modelling based on the Geospatial Stream Flow Model (GeoSFM) developed by the United States Geological Survey. We use firm level data for 31 countries from the World Bank Enterprise Surveys; information about installed capacity, power plants location and power networks comes from the Platts World Electric Power Plants and the Africa Infrastructure Country Diagnostic while the data for the hydrological model mostly come from the Early Warning Famine System.