Green transition: digital inclusion and renewable energy in Africa’s sustainability journey
Andrews SalakpiPurpose
This study aims to investigate the relationship between digital financial inclusion, renewable energy consumption and environmental sustainability in Sub-Saharan Africa (SSA). It aims to examine how digital financial systems facilitate access to clean energy and enhance environmental outcomes. Specifically, the study evaluates the direct and indirect (mediating) role of renewable energy consumption in linking digital financial inclusion to environmental sustainability, addressing challenges of energy poverty, financial exclusion and environmental degradation in the region.
Design/methodology/approach
The study adopts a quantitative research design using cross-sectional data from 44 SSA countries for the year 2023. It is grounded in endogenous growth theory, which frames digital financial inclusion as a technology-driven enabler of sustainable development. The analysis uses Partial Least Squares Structural Equation Modelling (PLS-SEM) to examine both direct and mediating relationships among digital financial inclusion, renewable energy consumption and environmental sustainability.
Findings
The results reveal that digital financial inclusion is positively associated with renewable energy consumption and with improved environmental sustainability in SSA. Renewable energy consumption also has a strong positive effect on environmental sustainability. Further, it plays a significant mediating role in the relationship between digital financial inclusion and environmental sustainability. This indicates that digital finance enhances environmental outcomes both directly and indirectly by facilitating investment and access to clean energy technologies.
Research limitations/implications
These findings carry critical implications for policy: governments and regulators in SSA should embed digital financial inclusion strategies within national renewable energy and climate action frameworks, leveraging mobile money ecosystems, fintech-enabled pay-as-you-go models and digital microcredit platforms as integrated instruments for simultaneously advancing clean energy access and improving environmental sustainability, in direct support of Sustainable Development Goals (SDG) 7 (affordable and clean energy), SDG 13 (climate action) and SDG 1 (no poverty).
Originality/value
This study contributes to the literature by integrating digital financial inclusion into the energy–environment nexus within SSA. The findings offer valuable policy insights by highlighting how digital platforms, such as mobile money and fintech-enabled energy solutions, can accelerate the green transition and support sustainable development in developing economies.