Impact of Rural Electrification on Poverty Reduction: A Case Study In Bench-Sheko Zone, South-West Ethiopia

Abstract

One way of alleviating poverty is to promote modern energy access, in particularly, electricity. In any country lack of electricity is one of the major impediments to growth and economic development of rural economies. However, in the Ethiopian context there is a very limited empirical study that has examined the causal relationship between the massively accomplish rural electrification endeavors and poverty reduction. Advocates of RE suggested that it increase the wellbeing of the society but some critics that it creates unequal social tension. The objectives to determine impact of RE on households’ welfare: income, and education, the socio-economic development of both on-farm and off-farm commercial activities and the level of poverty in the area. This study has shown that the impact of electricity on reduction of poverty is positive and significant. BY using PSM and OLS the impact of electricity access on household on farm income is found to be insignificant and having the wrong sign. But, the result of the study revealed as rural electrification affected educational attainment and off-farm income positively and significantly. By using ATT nearest neighboring off farming income on the electrified area 70.2% more than on unelectrified kebele and 35 minutes more study time in electrified than unelectrified. Due to its important and contribution all types of electrification used to reduce poverty. The study addresses that this kind of study is essential to push the government body to connect rural areas for the sustainable economic development.