Towards Achieving Clean Energy in West Africa: The Role of Financial Inclusion

Abstract

Despite notable progress in expanding financial services across West Africa, the nexus between financial inclusion and access to clean energy remains insufficiently examined at the sub-regional level. This study investigates the effect of financial inclusion on access to clean energy across eight West African countries over the period 2010–2023. Employing panel data methodology, including fixed effects, random effects, and Hausman test procedures, the study uses the Access to Clean Energy Index (ACEI) as the dependent variable, with outstanding loans, ATM usage, and bank branches per thousand people as financial inclusion proxies, and inflation as a macroeconomic control. The Hausman test confirms the appropriateness of the random effects model (χ² = 5.324, p = 0.256). Results reveal that outstanding loans (β = 0.00000560, p = 0.020) and ATM usage (β = 1.123, p < 0.001) exert positive and statistically significant effects on clean energy access, while bank branch density yields a negative but insignificant coefficient (β = −1.188, p = 0.068). These findings underscore the primacy of credit accessibility and digital financial infrastructure over physical banking presence in driving energy transitions. The study contributes novel sub-regional evidence to the financial inclusion–clean energy nexus literature and offers targeted policy recommendations for expanding green financing mechanisms and digital financial services to accelerate sustainable energy transitions in West Africa.