Business Reporter
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, according to the 2015 report of Kofi Annan’s Africa Progress Panel.
The report calls for a 10-fold increase in power generation to provide all Africans with access to electricity by 2030.
This would reduce poverty and in- equality, boost growth, and provide the climate leadership that is sorely missing at the international level.
“We categorically reject the idea that Africa has to choose between growth and low-carbon development,” said Mr Kofi Annan (pictured), chair of the Africa Progress Panel.
“Africa needs to utilise all of its energy assets in the short term, while building the foundations for a competitive, low-carbon energy infrastructure.”
In Sub-Saharan Africa, about 621 million people lack access to electricity – and the 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.
The report notes that power shortages lowers the region’s growth by 2-4 percent 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 $2,50 a day collectively spend $10 billion every year on energy-related products, such as charcoal, paraffin, candles and torches.
Measured on a per unit basis, Africa’s poorest households are spending around $10/kWh on lighting – 20 times more than Africa’s richest households. By comparison, the national average cost for electricity in the US is $0,12/kWh and in the UK is $0,15/kWh.
“This is a significant market failure,” the report says. “Low-cost renewable technologies could reduce the cost of energy, benefiting millions of poor households, creating investment opportunities, and cutting carbon emissions.” The report says 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 2015 Africa Progress 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 and to cut corruption, make utility governance more transparent, strengthen regulations, and increase public spending on energy infrastructure.
It says governments should redirect the $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.
It further calls for strengthened international co-operation to close Africa’s energy sector financing gap, estimated to be $55 billion annually to 2030, which includes $35 billion for investments in plant, transmission and distribution, and $20 billion for the costs of universal access.