Kofi Annan
Kofi Annan, APP chair: Africa Progress Panel Report 2015 states low-cost renewable technologies could reduce the cost of energy to poorest households spending around $10/kWh (ZAR126/kWh) on lighting. Pic credit: Bloomberg

On Friday, at the World Economic Forum in Cape Town, the Africa Progress Panel (APP), launched the Africa Progress Report 2015, stating that investment in energy must be significantly scaled up to unlock Africa’s potential as a global low-carbon superpower.

Power shortages diminish the region’s growth by 2-4% 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, for example, is an oil exporting superpower, but 95 million of the country’s citizens rely on wood, charcoal and straw for energy.

Africa should not have to choose

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. Over the course of one year, someone boiling a kettle twice a day in the UK uses five times more electricity than an Ethiopian consumes over the same year.

Kofi Annan, APP chair said: “We [APP] categorically reject the idea that Africa has to choose between growth and low-carbon development. Africa needs to utilize all of its energy assets in the short term, while building the foundations for a competitive, low-carbon energy infrastructure.”

Cost of energy in Africa

The report reveals that households living on less than $2.50 (ZAR32) a day collectively spend $10 billion (ZAR126 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 $10/kWh (ZAR126/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 (ZAR1.50/kWh) and in the UK is $0.15/kWh (ZAR1.89/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.

Report urges energy revolution

The report says Africa’s leaders must start an energy revolution that connects the unconnected by increasing the rate of rural electrification, 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
  • Cut corruption, make utility governance more transparent, strengthen regulations, and increase public spending on energy infrastructure
  • Redirect the $21 billion (ZAR265 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

Time to end ‘climate negotiating poker’

The report also challenges African governments and their international partners to raise the level of ambition for the crucial climate summit in Paris in December, and calls for wholesale reform of the fragmented, under-resourced and ineffective climate financing system.

G20 countries should set a timetable for phasing out fossil fuel subsidies, the report states, with a ban on exploration and production subsidies by 2018.

While recognising recent improvements in the negotiating positions of the European Union, the US and China, the report says that current proposals still fall far short of a credible deal for limiting global warming to no more than 2˚C above pre-industrial levels. It condemns Australia, Canada, Japan and Russia for effectively withdrawing from constructive engagement on climate.