A focus on Ghana's sustainable development: Examining the interplay of income inequality and energy poverty

Abstract

This study investigates how income inequality influences energy poverty alleviation in Ghana as it seeks to achieve a sustainable economy. Employing the Granger causality test on a dataset from 1990 to 2021, the results show that both Gini post-tax and post-transfer (Income inequality-$ll1$) and Gini pre-tax and pre-transfer (Income inequality-$ll2$) Granger-cause access to electricity and rural area access to electricity. Urban area access to electricity Granger-causes Gini post-tax and post-transfer. Similarly, an FMOLS test was carried out to introduce some controlling variables and results showed that GDP, trade liberation, urbanization, population growth, and financial development increase income inequality and access to clean fuels and technology, as well as access to urban energy, have a substantial impact on economic disparity. In addition, GDP, financial development, energy intensity, industrialization, trade liberalization, urbanization, population rise, and FDI all have varying implications on energy poverty. These results imply the need to include energy poverty reduction measures within income inequality reduction policies to enhance not just access to today's cutting-edge energy but also affordability to the minimal income receivers. Other reforms and levies on electricity consumption options in renewable energy support can contribute to addressing income inequality and energy poverty issues in Ghana.

Keywords: Energy poverty; Ghana; Income inequality; Sustainable economy.