Energy transition and economic growth in African OPEC countries

The study examined the relationship between energy transition and economic growth in six African Organization of the Petroleum Exporting Countries (OPEC) member states (Algeria, Nigeria, Equatorial Guinea, Rep of Congo, Liyba, and Gabon) from the period 1990 to 2024, employing a panel fixed and random effect techniques and panel PMG/ARDL techniques as robustness test. GDP per capita as the dependent variable and total fossil fuel consumption, total renewable energy consumption, and energy ratio as independent variables. Population growth rate was used as moderating variable. The panel regression results revealed that renewable energy and fossil fuel as drivers of GDP per capita within the period 1990–2024. While energy ratio revealed a negative and significant impact on economic growth. The static model tested the long-run elasticities of energy transition to economic growth; the PMG checked the error correction which gave an indication of the long-run adjustment of growth to energy transition’s short-run disruptions. Good speeds of adjustment was documented for such countries as Algeria (65%), Nigeria (42%), and Rep of Congo (85%) showing the robust adjustment of economic growth to energy transition; others like Equatorial Guinea (135%), Libya (129%) and Gabon (103%) reported bust cases. Based on the findings, this study contributes to ongoing energy debates by arguing for a re-evaluation of government policies pertaining to energy consumption in OPEC African countries. By implementing a hybrid energy strategy, policymakers in the OPEC Africa countries could facilitate a more seamless transition to renewable sources while still reaping the benefits of fossil fuels. This integrated approach has the potential to improve energy integration and foster sustainable economic growth across the OPEC countries in Africa.