Effect of household financial accessibility and remittances on clean energy use in Ghana

Abstract

This study explores the critical nexus between international remittances, financial inclusion, and household energy transition in Ghana. Recognizing that energy poverty remains a significant challenge across sub-Saharan Africa, the research investigates how remittance inflows influence household decisions regarding the adoption of cleaner energy sources, particularly in a context where traditional biomass remains predominant. Using nationally representative survey data and employing econometric techniques such as the multinomial logit model, the study reveals that remittances positively impact the likelihood of households transitioning from biomass to cleaner energy alternatives like LPG and electricity. Furthermore, the analysis underscores the mediating role of financial inclusion in amplifying the effects of remittances on energy choices, suggesting that access to formal financial services enhances households’ capacity to invest in modern energy technologies. Policy implications of the findings are substantial, advocating for the design of integrated strategies that promote remittance-fueled investments in clean energy through inclusive financial systems. By bridging the gaps between remittance flows, financial access, and sustainable energy consumption, this study contributes to ongoing discourse on achieving energy justice and environmental sustainability in Ghana and similar developing contexts.