Does Africa have to choose between growth and low-carbon development? Well, according to Kofi Anaan Chair of the Africa Progress Panel, Africa needs to utilize all of its energy assets in the short term, while building the foundations for a competitive, low-carbon energy infrastructure.
African governments, investors, and international financial institutions must significantly scale up investment in energy to unlock Africa’s potential as a global low-carbon superpower. If Africa has a ten-fold increase in power generation to provide all Africans with access to electricity by 2030, it would reduce poverty and inequality, boost growth, and provide the climate leadership that is sorely missing at the international level.
In Sub-Saharan Africa, 621 million people lack access to electricity – and this number is rising. Excluding South Africa, which generates half the region’s electricity, Sub-Saharan Africa uses less electricity than Spain. It would take the average Tanzanian eight years to use as much electricity as an average American consumes in a single month. And over the course of one year someone boiling a kettle twice a day in the United Kingdom uses five times more electricity than an Ethiopian consumes over the same year.
Power shortages diminish the region’s growth by 2-4 per cent a year, holding back efforts to create jobs and reduce poverty. Despite a decade of growth, the power generation gap between Africa and other regions is widening. Nigeria is an oil exporting superpower, but 95 million of the country’s citizens rely on wood, charcoal and straw for energy.
The report reveals that households living on less than US$2.50 a day collectively spend US$10 billion every year on energy-related products, such as charcoal, kerosene, candles and torches. Measured on a per unit basis, Africa’s poorest households are spending around US$10/kWh on lighting – 20 times more than Africa’s richest households. By comparison, the national average cost for electricity in the United States is US$0.12/kWh and in the United Kingdom is US$0.15/kWh.
This is a significant market failure. Low-cost renewable technologies could reduce the cost of energy, benefiting millions of poor households, creating investment opportunities, and cutting carbon emissions.
According to the report by from Kofi Annan’s Africa Progress Panel, Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities, Africa’s leaders must start an energy revolution that connects the unconnected, and meets the demands of consumers, businesses and investors for affordable and reliable electricity.
The report urges African governments to:
- Use the region’s natural gas to provide domestic energy as well as exports, while harnessing Africa’s vast untapped renewable energy potential.
- Cut corruption, make utility governance more transparent, strengthen regulations, and increase public spending on energy infrastructure.
- Redirect the US$21 billion spent on subsidies for loss-making utilities and electricity consumption – which benefit mainly the rich – towards connection subsidies and renewable energy investments that deliver energy to the poor.
The report also calls for strengthened international cooperation to close Africa’s energy sector financing gap, estimated to be US$55 billion annually to 2030, which includes US$35 billion for investments in plant, transmission and distribution, and US$20 billion for the costs of universal access.