Does corruption undermine energy access? Investigating foreign direct investment and energy poverty dynamics in Sub-Saharan Africa

This study investigates whether corruption dampens the impact of foreign direct investment on energy access in Sub-Saharan Africa. The study adopted panel data of 49 SSA nations from 2000 to 2023. Methodologically, the study employs Panel OLS, Generalized Linear Models, Fully Modified OLS, and the Dumitrescu-Hurlin causality approach to analyse three basic hypotheses: firstly, does corruption significantly moderates the impact of FDI on access to electricity and clean cooking fuels, secondly, does institutional effectiveness conditions FDI inflows into the energy sector, and thirdly, whether causal feedback exists among institutions, FDI, and energy access. Empirical findings from the study show that while FDI significantly increases electricity access, poor institutional environments limit its impact on access to clean fuels. The control of corruption significantly enhances the effect of FDI on energy outcomes, while government effectiveness attracts FDI. The interaction term between energy access and corruption provides evidence of bidirectional causality, supporting the co-evolution of institutions and infrastructure. The findings further suggest that while corruption may temporarily facilitate certain investment flows, sustained improvements in energy access require institutional effectiveness rather than reliance on informal or distortionary governance channels, thus recommending strengthening financial flows, institutional integrity, and governance reform to ensure sustainable energy access. The study provides policymakers and development partners with practical information on how to meet SDG 7 in the region.