‘Africans living on less than $2.50 a day spend $10 billion on energy’


Ikorodu Station Manager, Falcon Corporation Limited, Nana Okudu (left); Head, Finance and Value Creation, Ajibola Falomo; Assistant Manager Large Enterprises Credit Group, Bank of Industry Limited, Arinze Uzochukwu; Head, Pharmaceutical Division, Uche Lawrence; Assistant Manager/Relationship Manager, Gas and Petrochemical Group, Ndidiamaka Okwukaogu; during a visit to the corporation’s Ikorodu City Gas Station in Lagos

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.

That was the main message of a new report from Kofi Annan’s Africa Progress Panel, Power, People, and Planet: Seizing Africa’s Energy and Climate Opportunities.

The report revealed that households living on less than $2.50 a day collectively spend $10 billion every year on energy-related products, such as charcoal, kerosene, candles and torches.

According to the report, 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 United States is $0.12/kWh and in the United Kingdom is $0.15/kWh.

The report also called for strengthened international cooperation to close Africa’s energy sector financing gap, estimated to be $55 billion yearly to 2030, which includes $35 billion for investments in plant, transmission and distribution, and $20 billion for the costs of universal access.

The report called for a ten-fold increase in power generation to provide all Africans with access to electricity by 2030. This would reduce poverty and inequality, boost growth, and provide the climate leadership that is sorely missing at the international level.

Chair of the Africa Progress Panel, Kofi Annan stated: “We 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.”

The report stated that 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.

• Cut corruption, make utility governance more transparent, strengthen regulations, and increase public spending on energy infrastructure.

• 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.

The report 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. He said: “Many rich country governments tell us they want a climate deal.

But at the same time billions of dollars of taxpayers’ money are subsidising the discovery of new coal, oil and gas reserves.

They should be pricing carbon out of the market through taxation, not subsiding a climate catastrophe.

“By hedging their bets and waiting for others to move first, some governments are playing poker with the planet and future generations’ lives.

This is not a moment for prevarication, short-term self-interest, and constrained ambition, but for bold global leadership and decisive action.

“Countries like Ethiopia, Kenya, Rwanda and South Africa are emerging as front-runners in the global transition to low carbon energy. Africa is well positioned to expand the power generation needed to drive growth, deliver energy for all and play a leadership role in the crucial climate change negotiations.”

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