Biomass Energy, Finance and Sustainable Human Development in East Africa: What a 2024 Study Reveals

A digest of Sheikh Ali, Gutale & Dalmar (2024), Cogent Economics & Finance

Across the East African Community (EAC), most households still cook and heat with firewood, charcoal and agricultural waste. The authors cite regional estimates that solid biomass supplies roughly 80% of final energy consumption, from about 75% in Kenya to more than 95% in Burundi. Biomass sustains rural livelihoods, but it is also tied to deforestation and household air pollution. This 2024 study asks how biomass energy use relates to sustainable human development — wellbeing adjusted for ecological pressure — in six EAC countries from 1990 to 2019, and whether deeper financial systems change that relationship. It will interest anyone working on clean cooking, energy access or green finance in Africa.

The study covers 6 countries over 30 years, 1990–2019, and uses 5 estimators: DK-FE, PCSE, FGLS, FMOLS and AMG. The biomass elasticity in the main PCSE/FGLS model is −0.143, and the finance × biomass interaction term is +0.329.

Article at a Glance

The article is "Biomass energy consumption and sustainable human development: the role of financial development in EAC member countries," by Ali Yassin Sheikh Ali, Ali Abdukadir Ali Gutale and Mohamed Saney Dalmar. It was published in Cogent Economics & Finance, Vol. 12, No. 1, Article 2386390 (Taylor & Francis; open access, CC BY 4.0), in 2024 (received 11 March; accepted 29 June; published online 10 August). Its research area is development economics and energy and environmental economics, and its study context is Burundi, DR Congo, Kenya, Rwanda, Tanzania and Uganda, using annual data for 1990–2019. The method is a balanced panel with second-generation tests, PCSE and FGLS estimators, a Driscoll–Kraay baseline, FMOLS and AMG robustness checks, and Dumitrescu–Hurlin causality. The DOI is https://doi.org/10.1080/23322039.2024.2386390.

The Research Problem

Earlier research disagrees about biomass. Some studies the authors review link biomass use to higher growth and environmental gains; others find the opposite. Most of this work looks at growth or emissions rather than human development, and indices such as the HDI ignore ecological costs.

The authors also argue that the role of the financial sector — which can fund cleaner energy and widen access to health and education — has been neglected in this relationship, particularly for EAC countries.

Research Objective

The study examines how biomass energy consumption (BEC) affects sustainable human development (SHD) in EAC member states, and whether financial development (FD) moderates that effect. The authors describe two key questions. The first is how financial development affects sustainable human development outcomes. The second is how biomass energy consumption affects sustainable human development, and whether finance alters that link.

How the Study Was Conducted

A balanced panel of six countries over 30 years. SHD is measured with Hickel's (2020) Sustainable Development Index (SDI), which adjusts human development for per-capita CO₂ emissions and material footprint. Biomass use is measured in tonnes per person; FD is the IMF financial development index, with bank credit to the private sector as an alternative. Controls: GDP per capita, trade openness, population growth, inflation. Variables are logged, and two models are estimated: a main-effect model and one adding a finance × biomass interaction.

The analysis followed six steps. In step 01, Dependence, the Breusch–Pagan LM and Pesaran CD tests rejected cross-country independence at 1%, meaning shocks spread between countries. In step 02, Heterogeneity, the Pesaran–Yamagata Δ tests rejected equal slopes across countries (p < 0.01). In step 03, Unit roots, the CIPS and CADF tests showed all series are stationary in levels or first differences. In step 04, Cointegration, the Kao, Pedroni and Westerlund tests indicated a long-run relationship. In step 05, Estimation, PCSE and FGLS were used as main estimators, with pooled OLS, fixed effects and Driscoll–Kraay as baselines. In step 06, Robustness, FMOLS and AMG estimators were used, along with Dumitrescu–Hurlin panel causality tests.

Key Findings

The coefficients below are as reported in Tables 8, 9, 11 and 12 of the article, and paired values are the specifications without and with further controls. The original tables give standard errors and significance levels. Under PCSE / FGLS (main), the biomass coefficient in the main model is −0.143 / −0.127, in the interaction model it is −0.920, and the finance × biomass term is +0.329. Under Driscoll–Kraay fixed effects, the biomass coefficient in the main model is −0.208, in the interaction model it is −0.879, and the finance × biomass term is +0.294. Under FMOLS (IMF FD index), the biomass coefficient in the main model is −0.308 / −0.221, in the interaction model it is −0.819, and the finance × biomass term is +0.237. Under AMG (panel average), no main-model value is reported, the biomass coefficient in the interaction model is +0.198 (SE 0.171), and the finance × biomass term is −0.077 (SE 0.063).

1. Biomass use is associated with lower sustainable human development. In the main PCSE and FGLS models, a 1% rise in biomass use per person is associated with roughly a 0.13–0.14% lower SDI, other factors held constant. Driscoll–Kraay and FMOLS estimates point the same way.

2. Financial development weakens the negative association. The finance × biomass interaction is positive (0.329 in PCSE/FGLS; 0.24–0.29 elsewhere), which the authors read as finance offsetting biomass's harm. The −0.920 highlighted in the abstract comes from this interaction model, so it should be read together with the interaction term rather than as the average effect.

3. Growth, trade and population growth move with higher SDI; inflation with lower. GDP per capita has the largest positive coefficients (about 0.28–0.47), followed by population growth and trade openness (about 0.06–0.14); inflation is small and negative.

4. Causality appears to run both ways between biomass and SDI. Dumitrescu–Hurlin tests indicate two-way causality between biomass use and SDI, and between SDI and both economic growth and population growth.

Reading note: Two points need care. The abstract reports two-way causality between biomass use and economic growth, while the results section describes it as one-way, from growth to biomass. And the AMG check, which lets each country have its own coefficients, gives a panel-average biomass coefficient that is positive and not statistically significant, with country estimates ranging from negative (DR Congo) to positive (Kenya). The paper treats this as heterogeneity rather than a challenge to the main result.

What the Study Contributes

The contribution is primarily empirical: it pairs an ecologically adjusted wellbeing index with biomass data for EAC countries, tests financial development as a moderator, and applies estimators suited to interconnected, heterogeneous panels. The authors describe it as, to their knowledge, the first study linking biomass use to the SDI. They recommend reducing traditional biomass, promoting modern biomass and renewables, funding biomass-efficiency research, and strengthening financial institutions and green finance.

Important Limitations

Identified by the authors: Reliance on secondary data of uneven accuracy and availability. A relatively short time frame that may miss long-term dynamics. The EAC is treated as one bloc, masking country-specific differences. Biomass is examined alone, not alongside other renewable sources.

Skilful cautions arising from the study design: Six countries is a small cross-section for panel inference. The SDI penalises material footprint, which includes biomass, so part of the negative link may be built into the measures. Panel Granger-type tests show predictive precedence, not cause and effect. Equation 2 writes the interaction as ln(FD × BEC), while the tables label a product of logs; the finance-adjusted effect depends on which is meant. Finally, some logged variables take negative values, and several figure captions do not match their axes.

Why This Research Matters

Clean cooking and energy access sit at the centre of SDG 7 in East Africa, and financial-sector reform is on many national agendas. The study offers regional evidence that energy and finance policy may interact, and an open-access example of second-generation panel methods for students.

Skilful Research Insight

Editorial commentary — not a finding of the study. Three lessons stand out. First, once a model includes an interaction, the coefficient on the main variable becomes its effect at a specific value of the moderator; reporting marginal effects across the observed range of financial development would make the claim that finance reverses biomass's harm easier to judge. Second, check whether the outcome index shares components with a regressor, as the SDI's material footprint and biomass may here. Third, the AMG results point to country-level analysis. Future work could separate traditional from modern biomass, test clean-cooking finance directly, and extend the sample to members not covered here, including South Sudan and Somalia, which joined the EAC in 2024.

Read the Original Research

The original article is "Biomass energy consumption and sustainable human development: the role of financial development in EAC member countries," published in Cogent Economics & Finance, 12(1), 2386390 (2024), by Ali Yassin Sheikh Ali, Ali Abdukadir Ali Gutale and Mohamed Saney Dalmar. Its DOI is https://doi.org/10.1080/23322039.2024.2386390, and the publisher/journal page is Taylor & Francis, www.tandfonline.com/journals/oaef20 (open access, CC BY 4.0). Skilful summarises; all findings belong to the original authors.

SEO Information

The SEO title is "Biomass Energy and Sustainable Human Development in East Africa: 2024 Study." The meta description is "A Skilful digest of a 2024 Cogent Economics & Finance study on biomass energy, financial development and sustainable human development in six EAC countries." The URL slug is /biomass-energy-sustainable-human-development-eac. The primary keyword is biomass energy consumption and sustainable human development. The secondary keywords are East African Community; financial development; sustainable development index; clean cooking; PCSE and FGLS panel models; Dumitrescu–Hurlin causality.