Panel Regression on the impact of Energy Consumption and Trade Openness on EconomicGrowth in Some Selected Sub-Sahara African Countries

Abstract

Energy is necessary for a holistic economic system that includes the production, distribution, and consumption of products and services. This suggests that energy access and consumptionareeither directly or indirectly related to the growth of the majority of developing and growingeconomies. As a result, energy is essential to the production of goods and services that are either sold else where or consumed locally. Trade openness and energy output are thus two of the most important factors determining a nation's economic health. Thus, this  study aimed at examining the impact of energy consumption and trade openness on economic growth in selected Sub-Saharan African  (SSA) Countries using panel regression models. The data for the study were collectedfrom World Bank Data Base from 2010 -2022. The  data collected were analyzed usingPooledRegression, Fixed Effect (FE) and Random Effect (RE) regression models. The  Hausman specification test result revealed that the random effect model is more efficient for modelling the impact of energy consumption  and trade openness on economic growth in SSACountries(Housman specification test statistic = 5.31, p > 0.05). The study revealed further  that thereispresence of random effect (test statistic = 611. 18, p < 0.05) and there is cross sectional independence (test statistic =  39.455, p < 0.05) in the data. In addition, it was discovered that both energy consumption and trade openness have negative and  significant impact on economic growthof selected SSA Countries ( β1 = -1.7342, p < 0.05; β2 = 0.4097, p < 0.05) . Based on these findings, it  was recommended that policy makers in the selected Countries that should formulated policies that will provide an enabling environment  for effective and positive contributionof oil consumption and trade openness to economic growth in Nigeria