Remittance inflows and electricity access in sub-Saharan Africa: insights from a process-tracing approach

Access to clean, affordable and modern energy is essential for strong public service delivery, vibrant economic activity and the uptake of new technologies (Wang et al., 2024; Mitić et al., 2023). In response, Sustainable Development Goal (SDG) 7 aims to guarantee universal access to sustainable energy by 2030. Energy access is also closely linked to broader development priorities, including poverty reduction, inclusive growth, climate action and equitable education (Valickova and Elms, 2021). The International Energy Agency (IEA) defines energy access as the availability of clean cooking facilities and sufficient, reliable and affordable electricity to support a basic standard of living (Ferdous, 2021). Despite progress, energy poverty remains a major challenge in sub-Saharan Africa (SSA) (Blimpo et al., 2020). The COVID-19 pandemic worsened this situation, with millions lacking access to electricity and projections suggesting persistent deficits by 2030 (Valickova and Elms, 2021). Although access in SSA increased from 33% in 2010 to about 46%, many households remain unconnected despite proximity to the grid due to high connection costs, unreliable supply, limited information and administrative barriers (Sievert and Steinbuks, 2020). Evidence further indicates widening disparities relative to earlier periods (de Abajo Llamero, 2023).

The literature identifies two main categories of constraints: supply-side and demand-side factors. Supply-side challenges, traditionally managed by governments, include high infrastructure costs and regulatory complexities. However, affordability concerns cut across both dimensions (Valickova and Elms, 2021). Demand-side constraints such as low and unstable incomes, high tariffs, regressive connection charges, poor housing conditions and informal payments are particularly binding in SSA (Blimpo et al., 2020; Valickova and Elms, 2021). Moreover, income inequality and widespread informal employment exacerbate disparities in households' ability to pay for electricity (Sievert and Steinbuks, 2020; Sarkodie and Adams, 2020). Empirical evidence shows that demand-side barriers account for a larger share (35%–78%) of access constraints compared to supply-side factors (22%–65%) (Agradi, 2023). However, existing studies have largely emphasized supply-side solutions, with limited focus on demand-side interventions (Agyarko et al., 2020). This has restricted exploration of alternative financing mechanisms, such as remittances, that could alleviate affordability constraints. Given governments' fiscal limitations, privately sourced financial flows, particularly remittance, are increasingly important as complementary pathways to improve electricity access in SSA (Blimpo et al., 2020).

Two out of every ten individuals in SSA participate in sending or receiving remittances (Ajefu and Ogebe, 2021). These financial flows vary depending on migrants' income levels, proximity to recipients, access to remittance service providers and transaction costs, with funds typically transferred by family members, friends and business associates. Over the past 3 decades, remittances have grown significantly, exceeding official development assistance (ODA) by more than threefold and emerging as the largest source of external financial inflows to SSA (Sahoo and Sethi, 2020). On average, remittances account for about 3%–5% of the region's GDP (Agradi, 2023). Recent data show that remittance inflows to Africa increased sharply from US$8.8 billion in 1990 to US$85 billion in 2019, with US$48 billion directed to SSA, a region still marked by severe energy poverty (Sarkodie and Adams, 2020). Importantly, over 50% of global remittances are channelled to rural areas, which also experience the largest deficits in electricity access (Blimpo et al., 2020). Projections further suggest that remittance flows to rural regions could reach $1 trillion by 2025 (Agradi, 2023). In addition, remittances are relatively stable, diversified and resilient to shocks, including the 2008 global financial crisis and the COVID-19 pandemic (Onuonga, 2020). For instance, despite initial projections of a 23.1% decline, remittances to North Africa and SSA (excluding Nigeria) increased by 2.3% in 2020 (Agradi, 2023). This resilience enhances households' ability to smooth income and finance electricity access, including renewable energy technologies and ongoing energy consumption costs.

Our understanding is that a number of studies, such as (Ojapinwa and Lawani, 2022; Nguea et al., 2022), have looked into the relationship between remittances and energy in SSA. Contrary to prior studies, the relationship between remittances and electricity access in SSA is underexplored, despite data showing a persistent urban-rural electrification divide and infrastructure deficits that make remittance flows especially relevant (Djeunankan et al., 2023; Sarkodie and Adams, 2020). Remittances could help finance off-grid solar or mini-grids, rooftop systems and energy-related appliances, options vital for regions where grid extension is costly or slow (Agradi, 2023; Barkat et al., 2023). Neglecting this nexus risks missing a privately-financed pathway toward SDG 7, potentially undermining policies that fail to capitalise on remittance inflows for sustainable electrification. By focusing on SSA's fragmented policy landscapes and socioeconomic heterogeneity, this study addresses that gap: it pinpoints where remittances matter most, elucidates urban-rural disaggregation over a long timeframe and offers guidance for equitable and scalable clean energy access. In light of this, this study offers an exploratory analysis of the relationship between remittances and electricity access (urban and rural populations) in SSA and policy implications from the flow of remittances towards electricity access between 1990 and 2022. In light of the above, the research questions that inform this study are:

1. What mechanisms underpin the relationship between remittance inflows and urban–rural electricity access in SSA, and how are these mechanisms reflected in temporal trends over the period 1990–2022?

2. What are the policy implications of the relationship between access to electricity and remittances in SSA?

This study makes three novel contributions to the literature. First, this study stems from its focus on SSA's unique structural and contextual realities characterized by weak energy infrastructure, fragmented policy environments and high dependence on remittances as an alternative financing source. By situating the analysis within this context, the study provides a more grounded understanding of how external financial flows interact with constrained energy systems. Second, unlike other regions, SSA's socio-economic disparities and limited grid expansion create a distinct setting where remittances play a transformative role in enabling household-level access to electricity. Lastly, the study contributes methodologically by applying a process-tracing approach to uncover the underlying mechanisms linking remittances to electricity access. By integrating trend analysis with mechanism-based interpretation, it identifies how income, investment and liquidity channels operate and interact over time. This provides a more nuanced, context-specific explanation of how remittances influence electricity access pathways in SSA, moving beyond conventional correlational approaches and offering deeper insights into sustainable energy financing dynamics.

The remaining part of the article is structured as follows: Section 2 presents empirical studies on remittances and electricity access. Section 3 covers the methodology used. Section 4 presents the research trends on remittance inflow and electricity access in SSA. Section 5 concludes the study, followed by policy implications from remittances and electricity in SSA from 1990 to 2022 and ends with areas for further studies.

A growing number of studies (see Table 1) on the impact of remittances on energy access, particularly in Africa and other developing regions, have been characterised by occasionally contradictory outcomes underpinned by differences in regional scope, measurement techniques, econometric methodologies and time periods. First, compared to larger international samples, evidence from studies on Africa typically demonstrates stronger and more direct benefits of remittances on access to power. As shown in Figure 1, for instance, Nguea et al. (2022) discovered that while foreign aid hurts access and foreign direct investment improves it, remittances considerably enhance access to electricity and reduce urban–rural inequities in 36 African nations. Similarly, using data from 40 SSA nations, Gamette et al. (2025a, b) find that remittances have a favourable impact on access to electricity, with greater effects in urban than rural areas. A further study by Gamette et al. (2025a, b) supports these conclusions by demonstrating that political stability and institutional quality increase the impact of remittances, whereas regulatory quality results in negative interaction effects. Global research, on the other hand, typically yields outcomes that are weaker or more inconsistent. Murshed (2023) concludes that remittances have no direct impact on energy availability after studying 61 developing countries across six regions. Remittances lessen rural energy poverty rather than directly expanding access to electricity, according to Acheampong et al. (2025), which covers 135 developing nations. Given that African nations frequently have more binding infrastructural constraints and higher marginal returns to external financial inflows, which may enhance the observed benefits of remittances, these discrepancies imply that regional heterogeneity plays a crucial role.

The different results can also be explained by variations in the dependent variable's measurement. Whether a study measures electricity availability, energy use or energy poverty varies greatly and these decisions have a big impact on the results. For instance, Agradi (2023) finds that remittances raise energy consumption by 0.5%–0.8% in a sample of 51 African nations using electricity consumption as the outcome variable. This implies that rather than expanding access, remittances can be directed toward higher usage. Chen et al. (2023), on the other hand, discovered that remittances lower energy use by 0.067% using more comprehensive energy consumption measurements, suggesting potential efficiency gains or substitution effects in home energy use. In the meantime, studies like Barkat et al. (2023) and Djeunankan et al. (2023), which concentrate on energy poverty rather than consumption or access, typically indicate that remittances lessen energy poverty in developing nations. Similar benefits in lowering poverty, especially in rural regions, are reported by Acheampong et al. (2025). These variations show that depending on whether the focus is on access, consumption patterns or the prevalence of poverty, remittances may have varying effects on different aspects of energy wellbeing. Therefore, one of the main causes of contradictory empirical conclusions is diversity in the proxies employed for energy outputs.

The variance in outcomes is also a function of differences in econometric approaches. Remittances often have positive and statistically significant benefits on access to electricity, according to studies using the System Generalised Method of Moments (System-GMM), such as Gamette et al. (2025a, b) and Nguea et al. (2022). These methods improve causal interpretation by accounting for endogeneity and dynamic persistence. However, research employing different techniques frequently yields conflicting or weaker findings. For instance, Bano et al. (2025), using dynamic ARDL simulations for Pakistan between 1990 and 2020, discovered that remittances decrease access to power, indicating context-specific inefficiencies in the distribution of remittances. Similarly, Onuonga (2020) shows no direct causal relationship between remittances and power access using Granger causality and ARDL bounds testing for Kenya, demonstrating that GDP drives both. More sophisticated estimators that take cross-sectional dependence into account, including Cup-FM/Cup-BC techniques (Chen et al., 2023) and DCCE-PMG IV (Agradi, 2023), frequently yield more cautious estimates that occasionally weaken or reverse previously noted effects. Results using OLS-based and FMOLS techniques (Ojapinwa and Lawani, 2022; Djeunankan et al., 2023) are also inconsistent, especially when macroeconomic or institutional issues are taken into account. These methodological variations imply that how endogeneity, heterogeneity and cross-sectional dependency are handled greatly influences empirical results.

Divergent results can also be explained by time intervals and structural discontinuities in energy and migratory processes. Compared to studies that use more recent data, those that cover previous periods frequently find stronger or simpler effects of remittances. For instance, Sahoo and Sethi's (2022) analysis of India from 1975 to 2017 reveals that remittances eventually increase power demand. However, more recent research, such as Chen et al. (2023) (1990–2019) and Barkat et al. (2023), reports more subtle or diminished effects, reflecting shifts in household behaviour, technological spread and energy consumption patterns from 2000 to 2019. Long-term global studies like Murshed (2023) and Acheampong et al. (2025) may also conceal structural fractures related to policy reforms, migration changes and energy transitions. These temporal dynamics imply that the influence of remittances fluctuates over time in tandem with more general macroeconomic and energy system shifts rather than remaining constant.

In light of mixed empirical findings, this study makes both methodological and empirical contributions by examining the relationship between remittances and electricity access across 40 SSA countries from 1990 to 2022 using a process-tracing approach. This choice responds to limitations in existing literature, where econometric techniques such as System-GMM, ARDL and DCCE models, while effective in estimating average effects, often fail to uncover the underlying mechanisms linking remittances to electricity access. These approaches typically treat the relationship as a reduced-form association without systematically tracing the transmission channels. To address this gap, the study employs process tracing to identify and reconstruct causal pathways through which remittances influence electricity access. These include increased energy affordability, household income smoothing, investments in grid connections and adoption of off-grid solutions. Importantly, the approach allows for urban–rural disaggregation over time, capturing spatial and temporal heterogeneity shaped by institutional quality, infrastructure and financial inclusion in SSA.

This study employs process tracing, a qualitative approach that reconstructs plausible causal pathways through which outcomes emerge within specific contexts (Collier, 2011). Following the interpretive within-case strategy used by Asongu and Usman (2020), the analysis examines how remittance inflows shape household electricity access in SSA. Rather than relying on conventional econometric causality tests, the study uses a structured interpretation of empirical evidence to assess whether observed patterns align with theoretically derived mechanisms. Three key pathways are identified (see Figure 1). First, the income channel posits that remittances increase disposable income, enhancing the affordability of electricity connections and usage. Second, the investment channel suggests that remittances enable households to finance grid connections, off-grid technologies and appliances. Third, the liquidity-smoothing channel argues that remittances reduce income volatility, allowing sustained payment for energy services. These mechanisms are evaluated using causal process observations (CPOs), including temporal sequencing, rural–urban disparities, cross-country electrification differences, affordability trends and consistency with expected behavioural responses. Using World Development Indicators and IMF Balance of Payments data, the study establishes temporal ordering (Beach, 2017), then applies pattern matching to assess mechanism validity (George and Bennett, 2005). Data from 1990 to 2022 are analysed in STATA and triangulated to enhance transparency (Campbell, 1957). While not establishing definitive causality, the approach provides a coherent, mechanism-based interpretation of the remittance–electricity access nexus in SSA. The period 1990–2022 is chosen for this study because it captures critical transitions in SSA's political economy, characterised by structural adjustment reforms, financial liberalization and the rise of formal remittance channels (Sahoo and Sethi, 2020; Ajide and Alimi, 2019). This era also marks intensified electrification efforts through initiatives such as the Sustainable Energy for All (SE4All) program and national renewable energy policies adopted post-2000 (Valickova and Elms, 2021; Blimpo et al., 2020). Examining this timeframe further enables a comprehensive understanding of how evolving financial systems, migration patterns and energy sector reforms collectively shaped the remittances–electricity access relationship across SSA economies.

The energy ladder theory advanced by Treiber et al. (2015) provides the conceptual foundation for operationalising the process tracing approach in this study. The theory posits that as household income rises through remittance inflows, families transition from traditional fuels toward modern and efficient energy sources. Process tracing enables the study to empirically assess how this theoretical “climb” manifests across SSA countries between 1990 and 2022. Based on the archival data, the analysis tracks specific processes such as increases in remittance inflows, changes in electricity access rates and shifts in rural–urban energy disparities. By sequencing these events temporally and showing them as a conceptual framework in Figure 1, the study identifies causal pathways linking remittances to household electricity adoption, thereby illustrating upward movement along the energy ladder. Consistent with some empirical applications of the theory (Ferdous, 2021; Treiber et al., 2015), this approach allows for the identification of enabling conditions such as income effects, infrastructure expansion and affordability that drive transitions from low-tier to high-tier energy sources. Through this framework, the process tracing methodology integrates theory and evidence to explain how remittances influence energy modernisation trajectories across SSA.

Remittance inflows to SSA have increased gradually from about US$1.4 billion in 1980 to US$21.3 billion in 2008, or roughly 2.2% of the region's GDP (Okinda, 2020). Their growing role in increasing household discretionary income and bolstering financial resilience is highlighted by this steady growth (Mohammed, 2022; Bredtmann et al., 2019). Remittances are less erratic than official development aid (ODA) and foreign direct investment (FDI) and they frequently show countercyclical characteristics, rising during times of economic hardship at home (Ajide and Alimi, 2019; Constantinescu and Schiff, 2014). Altruistic motivations play a major role in this relative stability, since migrants continue to provide for households despite instability in the world economy (Mohammed, 2022). From a process-tracing standpoint, these inflows provide a crucial entry point into the processes that families utilise to move up the energy ladder rather than just being financial aggregates. In particular, the income channel implies that increasing remittance inflows raise household disposable income, which improves the affordability of energy usage and connections. This is especially important in SSA, where access is frequently limited by upfront connection fees and ongoing charges. In addition, the investment channel emphasises how people can fund energy-related assets through remittances, such as off-grid technology like solar systems, grid connections and electrical appliances. The transition from conventional biomass to contemporary electricity sources depends on these investments. Furthermore, the liquidity and consumption smoothing channel highlights how remittances lower income volatility, enabling households to pay for energy services consistently and prevent disconnections.

From 1990 to 2022, remittance inflows showed cyclical but typically increasing tendencies influenced by local and international economic circumstances (see Figure 2). As seen in Figure 2, remittance inflows were comparatively modest in the early 1990s, rose dramatically in the mid-2000s, peaked in 2005 at 2.5% of GDP and then briefly decreased during the 2007–2008 global financial crisis. In the view of Constantinescu and Schiff (2014), subsequent recovery and stabilisation patterns are a reflection of larger macroeconomic dynamics, migratory trends and policy contexts. These temporal patterns can be understood as mechanism-consistent evidence that develops in discrete phases over time within a process-tracing paradigm. Low and unreliable remittance inflows reduced the income channel in the 1990s, which limited advances in access to electricity, especially in rural areas with insufficient infrastructure (Ajide and Alimi, 2019). Rising remittances boosted household purchasing power, opened the income channel and spurred early investment in urban electrification through grid connections and energy-related assets during the 2000s, which was a structural shift (Bredtmann et al., 2019). Remittances' countercyclical and comparatively constant nature strengthened the liquidity and consumption smoothing channel after the 2007–2008 crisis, allowing households to continue using electricity consistently despite macroeconomic shocks (Constantinescu and Schiff, 2014). Although structural infrastructure limitations continued to impede access convergence, falling costs of off-grid and renewable technologies improved the investment channel starting in 2010, especially in rural regions (Treiber et al., 2015). It is important to note that these phased dynamics show that remittances do not follow a single static conduit, but rather work through changing processes throughout time. The energy ladder hypothesis, which holds that increasing household income promotes a progressive shift from traditional to modern energy sources, is consistent with this shift from income-driven impacts to investment and liquidity-driven outcomes. Infrastructure development and energy affordability conditions are crucial enabling variables influencing these shifts in SSA, according to supporting data from relevant research (Ferdous, 2021; Treiber et al., 2015).

Comparatively, SSA has consistently seen an increase in remittance inflows, especially in the last ten years, as reported by Asongu and Odhiambo (2021) and Efobi et al. (2019). Although remittances have also increased in Latin America and the Caribbean, East Asia and the Pacific and Europe and Central Asia, SSA's trajectory reflects unique structural dynamics fuelled by advancements in transfer technologies, global labour demand and migratory patterns. Remittance inflows to SSA increased significantly after 1990 and exceeded 1.5% of GDP by the early 2000s, as seen in Figure 3, underscoring their increasing macroeconomic significance. Mohammed (2022) goes on to say that in developing economies, including SSA, remittances have frequently surpassed official development aid (ODA) and foreign direct investment (FDI) as the main source of external funding. Increased migration of talented professionals from SSA and better economic possibilities in developed nations are intimately associated with this trend. This is corroborated by Bredtmann et al. (2019), who demonstrate that highly educated migrants remit more frequently and in greater amounts since they make more money and have fewer liquidity limitations overseas.

The global remittance landscape shows a generally increasing trend between 1990 and 2022, despite considerable regional variances in both quantity and volatility (see Figure 3). While countries like South Asia saw more consistent growth, remittance inflows in SSA rose from 0.7% of GDP in 1990 to as high as 2.5% in 2005 before settling at roughly 2.6% by 2022. Despite cyclical changes, especially during the global financial crisis, SSA remittances have shown significant stability in comparison to other private capital outflows. These trends offer an empirical foundation for evaluating remittances outside of macroeconomic aggregates and are influenced by shifts in currency regimes, migration regulations and global labour demand (Constantinescu and Schiff, 2014). From the standpoint of process tracing, these macrotrends function via a sequential causal pathway that connects access to energy and remittances. First, as remittance inflows rise, household disposable income rises, making power connections and consumption more affordable (income channel). Second, households invest a portion of this revenue in off-grid technology such as solar home systems, appliances and grid connections (investment channel) (Brown et al., 2020). Third, remittances enable long-term power payments by lowering income volatility (liquidity channel). These processes are dynamic and change over time, with liquidity effects becoming more significant during times of economic crisis and income effects predominating during remittance surges (Constantinescu and Schiff, 2014). These mechanisms support the energy ladder concept, which holds that incremental energy upgrading is made possible by increasing revenue. Additionally, empirical data indicates that energy affordability and infrastructure development are important enabling variables influencing these transformations throughout SSA (Ferdous, 2021; Treiber et al., 2015).

In SSA, the relationship between remittances and electricity accessibility illustrates a complex dynamic that connects infrastructural development, household welfare and more general economic reform. Remittance inflows are becoming more widely acknowledged as a reliable source of household funding that can affect access to energy through recognisable methods. Das and McFarlane (2020) reiterate that remittances offer a steady source of income to cover ongoing expenses, such as electricity bills. Expanding on this, Akçay and Demirtaş (2015) differentiate between direct and indirect channels, which may be further understood as mechanism-based routes that link remittances to access to power within a process-tracing framework. The income channel improves the affordability of power connections, monthly bills and basic energy use by directly impacting household disposable income through remittances. This is especially important in SSA, where access is restricted by hefty upfront connection charges and tariff restrictions. The ability of households to direct remittance income toward energy-related assets, such as appliances, grid connections and off-grid renewable technologies like solar home systems, is captured by the investment channel (Brown et al., 2020). The switch from conventional fuels to contemporary electrical sources is made easier by these expenditures. In addition to this, the liquidity and consumption smoothing channel illustrates how remittances lessen income volatility, allowing households to pay for energy services consistently over time and prevent disconnections. In addition to these direct routes, remittance-driven local economic activity also has an indirect impact by promoting the growth of small businesses and community-level infrastructure investments, such as energy systems (Ojapinwa and Lawani, 2022)

These routes are supported by mechanism-consistent empirical trends from 1996 to 2021. While remittance inflows surged from 0.6% of GDP to over 2.7% by 2018–2019, before slightly declining to 2.5% in 2020 due to the COVID-19 shock, electricity accessibility in SSA increased from 28.4% in 1996 to 50.6% in 2021(see Figure 4) (Mohammed, 2022). Higher disposable income improves affordability; therefore, the co-movement of these variables, especially the continuous increase in electrification and rising remittances, is consistent with the income channel. The buildup of energy-related assets is shown in the progressive increases in access over time, which also points to investment responses. Furthermore, the liquidity and smoothing mechanism is consistent with the robustness of power availability despite brief dips in remittances. When combined, these trends show that remittances complement SSA's efforts to achieve universal access to electricity by acting as both a household stabiliser and an energy transition catalyst.

Despite significant remittance inflows, there are still notable differences in electricity access between urban and rural areas in SSA. This is due to both uneven spatial infrastructure endowments and time-varying transmission of remittance impacts. Remittances improve the affordability of electrical services by increasing household financial capacity through the income channel (Das and McFarlane, 2020); however, the degree of this benefit is highly dependent on time and place. The urban-rural power gap has changed over time in reaction to shifting infrastructure and remittance dynamics. Both urban and rural areas saw modest increases in power access during the 1990s, when remittance inflows were comparatively low; however, rural areas continued to be more constrained because of inadequate infrastructure. Rising remittances in the 2000s helped urban families more than rural ones because of the grid infrastructure's ability to convert income gains into access to electricity more quickly (Brown et al., 2020). In contrast, rural areas suffered from high connection prices and poor network coverage. Although structural limitations continued to impede convergence, the spread of off-grid and decentralised energy solutions boosted rural responsiveness to the investment channel starting in 2010. This pattern shows that remittance effects shape unequal electrification results throughout SSA by being both income-driven, regionally diverse and temporally developing.

This gap is supported by mechanism-consistent empirical trends. Electricity access was 61.6% in urban areas and 11.9% in rural areas in 2000, when remittances made up 1.3% of GDP (see Figure 5). The rural-urban divide persisted between 47% and 53% even while remittances increased to 2.5% in 2005 and peaked at 2.7% in 2018. This stems from the fact that rural areas lack complementary infrastructure and urban households are better positioned to convert remittances into energy-related expenditures; this persistence shows that the investment channel is spatially restricted (Ojapinwa and Lawani, 2022). Furthermore, the liquidity and consumption smoothing channel does not greatly increase access to electricity in underserved areas, even while it encourages sustained usage (Akçay and Demirtaş, 2015). These results show that inclusive electrification achievements in SSA are still constrained by structural impediments.

The relationship between electricity accessibility and remittance inflows is not a straightforward co-movement of aggregates, but rather a mechanism-driven and structurally uneven process in the context of SSA. From a process-tracing standpoint, remittances function through channels of income, investment and liquidity that collectively influence family energy choices; however, the impact of these channels is dependent on the availability of infrastructure and regional disparities. Between 1996 and 2021, SSA's electricity access rate rose from 28.4% to 50.6%, while remittance inflows increased from 0.6% of GDP to about 2.7% before somewhat stabilising. This simultaneous evolution indicates that remittances serve as a supportive financial mechanism for energy transitions, especially by increasing affordability and facilitating household-level investments in energy technologies and power connections. The process-tracing evidence, however, suggests that these impacts are not consistent over time. Stronger grid infrastructure enables remittance-induced income gains to more efficiently transfer into energy use and connections, which is why urban families continually show higher rates of electricity access. On the other hand, inadequate infrastructure continues to impede rural residents' ability to benefit from the same financial inflows. Even during times of substantial remittance inflows, there is still a significant rural-urban divide, which emphasises how structural and physical limitations play a crucial role in mediating energy outcomes.

By implication, improving household welfare, increasing productivity and moving closer to the Sustainable Development Goals (SDGs) all depend on having access to dependable power. It promotes the establishment of small businesses, which helps to reduce poverty and create jobs, improves educational outcomes by allowing for more study time and improves healthcare delivery through well-functioning medical facilities (Sarkodie and Adams, 2020). Although this link varies between nations and over time, increasing remittance inflows have generally corresponded with expanding access to electricity in SSA. From US$1.4 billion in 1980 to US$21.3 billion in 2008, or roughly 2.2% of the region's GDP, remittances have grown to be a significant and reliable source of funding in SSA (Okinda, 2020). In contrast to official development aid (ODA) and foreign direct investment (FDI), remittances are frequently countercyclical, increasing during economic expansions and downturns and mostly motivated by altruism (Ajide and Alimi, 2019; Constantinescu and Schiff, 2014; Mohammed, 2022). They are a significant household-level buffer that goes beyond consumption smoothing because of their stability.

Evidence from process tracing demonstrates that remittances have a variety of effects on access to electricity. The income channel improves affordability of electricity connections and usage, while the investment channel enables households to finance grid connections, appliances and off-grid energy solutions. Over time, the liquidity channel helps to stabilise energy consumption by lowering income volatility. However, structural issues that restrict universal access, like spatial inequality and inadequate infrastructure, limit these effects. More broadly, remittances have multiplier effects by promoting local economic activity, entrepreneurship and demand for energy services, such as grid expansion and the adoption of renewable energy (Barkat et al., 2023; Agradi, 2023). However, enduring differences between rural and urban areas show unequal distributional results caused by institutional limitations. All things considered, these dynamics add fuel stacking, spatial heterogeneity and institutional issues to the energy ladder paradigm, emphasising the significance of policy contexts and time lags in electrification outcomes.

In policy terms, first, households in SSA countries should collaborate with central banks, commercial banks and mobile money providers to operationalise remittance-linked solar financing programs through Rural Electrification Agencies. Remittance-receiving households should be enrolled in matched savings plans (20–50%) and transaction histories should confirm their eligibility over a predetermined time frame (e.g. 3–6 months). Ministries of Energy should oversee vendor certification and quality control and subsidies for off-grid installations and connection fees should be paid directly to certified solar vendors or mini-grid operators. Furthermore, Ministries of Finance and central banks should implement Diaspora-Energy Bonds targeted at underserved rural areas, as specified in national electrification initiatives, to address infrastructure shortages. These instruments, which are backed by partial guarantees from development financing organisations ought to be listed on domestic exchanges and diaspora investing platforms. In order to grow mini-grid infrastructure, utilities and independent power producers should get the proceeds with repayment methods connected to prepaid electricity pricing. Also, telecommunication firms and energy regulators should require cooperation between utilities and remittance service providers to enable automatic remittance-to-energy payment systems in order to improve payment stability. Opt-in options on mobile money platforms can transfer a percentage of payments to solar leasing businesses or prepaid meters. Lastly, Ministries of Energy and Technical Education should also set up district-level solar training and maintenance hubs in collaboration with private companies and vocational schools to promote the installation, upkeep and long-term sustainability of rural electrification systems.

The findings in this study leave space for future research. Primarily, future research should employ panel Granger causality tests on a country-level dataset to establish the direction of impact and to explore why the remittance-electricity elasticity appears weaker in rural contexts, potentially using spatial econometrics to account for infrastructure spillovers. Further studies could also adopt spatial econometric models to examine how remittance inflows may finance household renewable energy installations and community-based energy projects, offering deeper insights into long-term energy security and sustainability pathways.

The authors acknowledged the use of ChatGPT only for proofreading the paper to correct grammatical and typographical errors.