During a virtual African Ministerial Roundtable participants stressed the need for sound government policies and enhanced investments to support economies and develop resilient and sustainable energy systems.
African ministers representing around two-thirds of the continent’s energy consumption, 60% of GDP and nearly half of its population met with global energy leaders via videoconference on 30 June 2020.
As Africa’s energy sector faces the dual impacts of the COVID-19 pandemic and global economic recession, participants agreed that sound government policies and enhanced investment are more important and necessary than ever to enhance the continent’s economic transformation; ensure sufficient, affordable, reliable energy for all citizens; and drive inclusive, just and sustainable, energy transitions.
2020 started as a year of optimism across Africa’s energy sector. But continued energy progress is now uncertain, as Africa – like the rest of the world – faces the wide-ranging impacts of the COVID-19 crisis.
The International Monetary Fund expects sub-Saharan Africa to enter into recession for the first time in 25 years as a result of the Coronavirus crisis, with growth falling to -3.2% in 2020 from 3.1% in 2019.
Many African economies also have limited fiscal capacity and are heavily indebted, undermining their ability to absorb these economic shocks. The energy sector has not been spared.
Africa Ministerial Roundtable Chairs’ summary
Participants welcomed the good progress made in many African countries in recent years, including accelerating growth in renewable energy and increasing access to electricity, but expressed concern that the COVID-19 pandemic and global economic shocks are testing the resilience of the energy sector in countries across Africa.
The COVID-19 crisis has severely impacted progress on energy access and lockdown measures have put off-grid developments at risk and weakened the financial health of decentraliSed service providers. Confinement policies and the consequent drop in energy demand in some countries is increasing pressure on power systems, calling into further question the financial health of state-owned utilities that were already under financial stress.
Oil and Gas
Participants also noted that the disruption to global oil and gas markets has delivered a sudden and sharp drop in export revenue, increasing fiscal pressures on key producer economies across the continent. As a result, new investments may face delay or cancellation in the post-COVID-19 global and energy sector financial environment. Continued uncertainty could create new risks, compounding security and sustainability challenges in the longer term.
At the same time, lower oil prices could make access to clean fuels and modern cooking ones more affordable, as liquid petroleum gas prices (LPG) are 40% lower that 2019, but also considerably more volatile. Expansion of LPG services could create new jobs in manufacturing, transport, bottling, distribution as well as retail. Also, the importance of securing the African energy supply through modern and larger storage capacities over the continent was noted.
Sustainable, Inclusive Transitions
Participants also underscored the importance of supporting Africa’s energy transitions. This includes strengthening the enabling environment for investment, both in infrastructure and all relevant technologies, and continuing to prioritise attainment of the Sustainable Development Goals while ensuring just and inclusive outcomes.
The importance of strengthening and developing local capacity and capabilities, especially through training, was also largely emphasized by many Ministers. Finally, participants welcomed the IEA sustainable recovery plan to help guide governments – including in Africa — through and beyond the crisis.
Now read the key recommendations from the Ministerial Roundtable