Energy Demand as a Moderator of the Energy Transition in Africa: A Two-Way Fixed Effects Panel Analysis for 27 Countries, 2000–2022

Analysing a balanced panel of 27 African economies over 2000–2022, I document a “renewable share paradox”: in 63% of countries, absolute renewable capacity grew while its share in total installed capacity declined from 54.9% to 46.3%. Using a two-way fixed effects estimator, I find a robust negative within-country relationship between log GDP per capita and the renewable capacity share (β ranging from –10.9 to –21.7 pp), supporting the demand-squeeze hypothesis. Targeted public investment in renewables can partially offset this effect.