An important gap within the literature concerning the determinants of energy poverty lies in the potential moderating role of domestic institutional policies and financial inclusion. The interconnections between financial inclusion, institutional quality, and energy poverty imply that these factors may wield significant influence over the relationship between government expenditure and energy poverty, ultimately affecting progress towards sustainable development. This research seeks to bridge this knowledge gap by examining the impact of government expenditure on energy poverty in the context of sub-Saharan Africa. Furthermore, it scrutinizes whether financial inclusion and institutional quality act as moderators within the nexus between government expenditure and energy poverty across the region. Leveraging panel data encompassing sub-Saharan African nations, we employ cross-sectional autoregressive distributed lag modeling and panel-corrected standard error estimation techniques. Empirical findings from both short-term and long-term models validate that augmented government expenditure and economic growth exert a detrimental effect on the accessibility of clean cooking fuels and technologies. These results furnish substantial evidence of the roles played by fiscal policy, financial inclusion, and institutional factors in alleviating energy poverty in sub-Saharan Africa. While renewable energy consumption, income inequality, institutional quality, financial inclusion, and carbon dioxide emissions all contribute to the exacerbation of energy poverty within sub-Saharan African nations. The cross-sectional autoregressive distributed lag modeling underscores the indispensable role of financial inclusion and institutional quality in shaping the relationship between government expenditure and the accessibility of clean cooking fuels and technology. However, the findings vary when energy poverty is modeled in conjunction with the proportion of the population with access to electricity. The panel-corrected standard error estimations reveal that each parameter follows a distinct influence trajectory, and the coefficient values are inconsistent. This study provides critical policy implications for policymakers striving to enhance energy accessibility for the population in the explored subregion.
Cite this article as: Ogede, J. S., Omitogun, O., Tiamiyu, H. O., Adegboyega, S. B., & Soyemi, C. O. (2023). Sustainability of moderating role of financial inclusion and institutional quality in the nexus between incidence of energy poverty and government expenditure: Evidence from sub-Saharan African countries. Journal of Business Administration and Social Studies, 8(1), 44-56.