Revelation: ushering a needed energy revolution for millions in Africa

Energy is a key enabler of inclusive growth, and unavailability constricts development. The just-released 2015 Africa Progress Report documents that an estimated 621 million Africans have no electricity and the gap is expanding.  Africa’s poor living on less than USD 2.50 daily pay up to 20times more, an estimated USD 10billion annually on unclean sources than rich households connected to the grid spend on their lighting. Due to energy poverty, this marginalized group is impacted on health, where indoor pollution due to biomass fuel used by 80% in Africa kills 600,000 annually, and 60% fridges used to store vaccines lack access to reliable power, in education where electricity access in primary schools is at 35%, and in some countries, 80% primary schools have no electricity. The implication being impaired learning as these pupils are denied light they need to study which affects their performance in school and hence later in life. This perpetuates the poverty cycle for this segment of society.

Energy Insecurity:  A Poverty Multiplier

70% of Africa’s poor reside in rural areas where access to energy is estimated at 1% – 8% further constricting development and prosperity for millions. The strong correlation between energy access and poverty is validated at country level. For instance, Mozambique which has 7.2% electricity access records about 84% of population living on less than USD 2per day. Kenya, Ethiopia, Lesotho all with less than 10% access record over 60% poverty levels. On the contrary, Tunisia with 94.3% records only 10% of population living on under USD 2per day.

Africa’s Energy Paradox of Plenty and Poor

Africa’s abundant clean energy potential remains underexploited. The continent’s hydro-power potential is estimated at 1852TWh annually, 3 times the continent’s current demand of 554TWh per year. However, currently only 10% of the continent’s potential is being exploited. This is in huge contrast to Western Europe which uses 85% of its available hydropower potential. On Solar it is estimated that a mere 0.3% of the sunlight that shines on the Sahara and Middle East deserts could supply all of Europe’s energy needs. However, currently only about 5% of African households use some form of solar. In geothermal, the East Africa region has an estimated 15,000MW in potential. Kenya, ranked the 8^th largest global producer of geothermal power, has potential of 10,000MW against current production at 579MW. On wind power, SSA has estimated 1300GW wind potential against total deployed capacity of 190MW. All this is excluding significant natural gas potential.

Kariba Dam between Zimbabwe and Zambia. Photo: Reuters

Capitalising on the continent’s renewable energy to sustainably improve access to energy and hence combat poverty is an untapped opportunity. Tapping it now could change the continent’s narrative for good.

Untapped Energy a gold mine for jobs, and poverty alleviation in Africa

Documented tangible benefits of the low carbon pathway are immense. Off-grid solutions like solar can enhance access to power in marginalised areas and power households, schools, hospitals, businesses as well as rural agro-industries, hence enhance inclusive economic growth. In Bangladesh, an LDC, solar has enhanced electricity access to an additional 20 million persons, provided in excess of 115,000 direct jobs and an additional 50,000 induced in downstream business due to availability of solar in rural areas.

Africa can replicate this success by ensuring financial and technical support from governments and private sectors aligned to new business models, hence achieve scale.

Current success stories in Africa also abound, though at a lower scale. By upscaling, the continent can potentially create a thriving electricity supply industry with an estimated 2.5 million temporary and permanent jobs.

On savings, Africa’s poor households, which spend up to 20 times more on energy for lighting than high-income households connected to the grid can make plausible savings of up to USD 8 billion by making grid power and off-grid renewable options like solar more accessible to them. In total, switching to a clean and accessible grid can reduce poverty in SSA by 16 – 26 million people.

In agriculture, growth is two to four times more effective in reducing poverty than in other sectors, and it can create many jobs along its value chain. The rice sector alone can potentially employ many of the 17 million young people who enter the job market annually in S-Saharan Africa. In addition, the sector employs up to 64% population and 70% of Africa’s poor reside in rural areas and depend on agriculture for their livelihoods and women produce up to 80% of the food. Enhancing productivity of the agriculture sector, currently contributing only 25 – 34% to continental GDP,  can lift a significant population out of poverty and enhance economic inclusivity.

Groundnut harvesting at an agricultural research station in Malawi. Photo: Steve Walling

Off-grid solutions which are the most economical solution for electrification in remote areas can power rural agro-enterprises and optimize agricultural productivity by enhancing value addition thereby cutting food loss and creating more jobs along the value chain. SSA lost food worth USD 48 billion in 2010, and yet its annual import bill is a whopping USD 35billion. These represent potential income opportunities lost. In addition, without value addition, food is sold in its unprocessed form and fetches lower prices, translating to loss in potential incomes.

By scaling clean energy for rural economies, then African agriculture will go a long way in enhancing income opportunities for youth, women as well as marginalised rural folk, hence enhance economic inclusivity without piling on emissions.

Existing policy enabling Environment for Africa to revolutionise Low carbon pathway

Global and continental policies are in synchrony in calling for low carbon development as a potent strategy out of poverty. The UN Sustainable Development Goals (SDGs) which Africa has embraced through its common Africa position on the post-2015 development agenda on the overall give more weightage to economic and environmental factors. Goals 7, 8, 13 and 15 jointly address environmentally sustainable, socially inclusive economic development.

The Common African Position (CAP) on post-2015 and the AU Agenda 2063 two key continental blue prints also revolve around environmentally sustainable and socially inclusive industrial development leading to economic growth, powered by at least 50% clean energy. The alignment of continental and global priorities toward low carbon development represents a defining moment of hope, and Africa should capitalise on this momentum to actualise a low carbon agenda.

Leapfrogging Africa into a global energy leader: The needed Policy enablers

The 2015 Africa Progress report documents that, current SSA’s desperate energy shortage represents an opportunity to leapfrog the continent into low carbon pathways and become a global leader with no or minimal transition costs.

There is need to up-scale the success achieved at micro-scale. Consequently the means of scaling up is an urgent action area. Scaling Africa’s low carbon inclusive growth will require enablers including financing, knowledge management & action research on means of implementation, capacity building, technology transfer & business innovation, educational reforms, institutional, regulatory and policy reforms. Actualising these is within reach if commitment is fostered by African governments, the international community, and the private sector investors and multinationals.

Africa’s energy sector needs investment of USD 55 billion annually until 2030 to achieve universal access to electricity yet the continent bleeds USD 69 billion every year in illicit financial flows. Photo: GA Hussein

The upcoming monumental climate talks in Paris present an opportunity through which commitment in all these issues can be garnered and legislated.

For instance, on the key financing component, the report documents that Africa’s energy sector needs investment of USD 55 billion annually until 2030 to achieve universal access to electricity. This figure is less than the continent hemorrhages in excess of USD 69billion annually as illicit financial flows. Stemming IFFs will recoup more than the required amount. Additional financing proposals made in the report include boosting tax collection, cutting corruption, ending subsidies for unprofitable utilities, where an additional USD 21billion can be recouped. These are actions in which African countries should take a lead.

The upcoming 3^rd financing for development conference should build on these innovative financing proposals including those documented in other key continental blue prints such as the 2^nd Africa Adaptation Gap Report, the 2014 Africa progress report, the AU/ECA high level panel report on illicit financial flows as well as the Cairo declaration on natural capital. 

Africa’s challenges are enormous but not insurmountable. There is therefore no need for despair. Solutions to enhance economic inclusivity abound through the low carbon pathway powered by clean energy of which the continent has in abundance though untapped. By making the right policy investments building institutions, capacity and technology, Africa can unleash its latent clean energy potential and leapfrog to being a global leader without adding a single tonne of planet warming gases while simultaneously creating income opportunities for millions of its citizens. In the words of Nelson Mandela – ‘it always seems impossible until it’s done’. So let us begin to make this a possible for the collective prosperity of all!