By Uzoigwe, Chimezie Daniel
There are immense challenges and opportunities for sustainable energy development in Africa. But first, I would like to appreciate the commitment of Africa’s political and business leaders, foreign investors and the international community led by the United Nations to the agenda on sustainable energy development through the Sustainable Energy for All (SE4ALL) Initiative, the recent adoption of the Sustainable Development Goals (particularly goal 7 on energy), the highly successful UN Climate Change Conference Paris 2015 and the launch of the African Energy Leaders Group (AELG) at the World Economic Forum (WEF) Davos 2015. These actions would no doubt impact on sustainable energy development in Africa.
Energy poverty is very severe in Africa. About 645 million people currently live without electricity in the continent and about 700 million go without access to clean cooking energy, with 600,000 dying each year from indoor pollution from reliance on biomass for cooking. Thus, Africa, a continent that accounts for only 16% of the world’s population has 53% of all the total population without electricity in the world. In an address at the World Economic Forum (WEF) Davos 2016, the President of the African Development Bank (AfDB), Dr. Akinwumi Adesina lamented that Africa’s poorest also pay some of the highest energy costs in the world as a woman living in Northern Nigeria pays up to 80 times per unit of energy compared to a resident in London or New York.
Decades of fossil fuel public sector-led energy investments in Africa have not yielded expected results. Nigeria for example spent about $16 billion between 1999 and 2007 alone mainly on the National Integrated Power Project (NIPP) without commensurate returns in power supply.
What has become clear however is that there can be no development of Africa, the world’s last frontier, without access to modern, efficient and affordable energy. It is therefore imperative that we work to increase Africans’ access to energy while mitigating the environmental and social risks of climate change to ensure sustainable development.
Aside individual countries’ efforts, there are quite a number of initiatives on sustainable energy development in Africa including the US Africa Clean Energy Finance Initiative, President Obama’s Power Africa Initiative which African entrepreneurs like Mr. Tony Elumelu of Heirs Holdings has made huge commitments to, the G7’s Africa’s Renewable Energy Initiative at COP 21, the AfDB’s Sustainable Energy Fund for Africa (SEFA), and the bank’s Transformative Partnership on Energy for Africa launched recently at the WEF Davos 2016 as part of a New Deal on Energy in Africa. These initiatives however face many challenges which include the continued employment of fossil fuel subsidies, the presence of monopoly structures in the energy sectors, regulatory and macroeconomic risks in sustainable energy schemes, the large capital required to fund sustainable schemes, high transaction costs and below-cost pricing which limit necessary investments.
These initiatives as laudable as they are, are by themselves not enough. Africa needs a two-pronged approach to deliver quick results on the sustainable energy development agenda. We need help to create a simple and sound policy environment that would encourage bold renewable energy foreign investments on one hand and indigenous entrepreneurship in renewable energy on the other. More of Africa’s growing billionaires, millionaires and young entrepreneurs need to turn to the power sector as part of a long term, patriotic commitment to the continent’s development instead of just focusing on business areas that routinely turn up quick profits but are ‘sterile’ in terms of long-term development impact.
Indigenous entrepreneurship in power is as important as attracting foreign investments in that sector. It will help create a complementary and sustainable investment model on renewable energy that will see Africans participate massively in energy entrepreneurship just like we are doing in the oil and gas, manufacturing and hospitality industries.
To achieve this, our national renewable energy policies would have to make allowance for private investments in both on-grid and off-grid projects on any scale – from a micro to a large scale. This will improve energy supply tremendously and given that the market would have become much more competitive, energy would become more affordable.
A country like South Africa has made modest strides in her renewable energy program. It will prove useful for us to look for ways to improve on this program and come up with a peer learning dashboard for other African countries in the spirit of regional co-operation.
It is in the interest of the whole world that Africa achieves sustainable and affordable supply of energy for all by 2030 as it presents a chance to unlock a new source of global growth in Africa as China and other emerging markets slow down. The sustainable energy agenda is important to Africa as it provides an opportunity for the continent to correct her less than average performance in the Millennium Development Goals (MDGs) and unlock her potentials.
It is up to Africans especially our entrepreneurs to see what we can do to help Africa achieve on this agenda.
Uzoigwe, Chimezie Daniel is a 2014 Tony and Awele Elumelu Prize winner as the best graduating student in Economics from the University of Benin. He is currently focusing on his postgraduate studies and can be reached through email@example.com