Countries in Africa face many challenges in their quest to improve the welfare of their populations, one of which is the lack of access to affordable and reliable modern energy. Africa has the lowest electrification rate of all regions. It is estimated that only 42 percent of the population has access to electricity, compared with 75 percent in the developing world.
In Sub-Saharan Africa the ratio is much lower, at 30 percent and only 14 percent in rural areas. Moreover, even when modern energy is available, it is expensive and unreliable. If current trends continue, less than half of African countries will reach universal access to electricity by 2050.
The lack of access to modern energy services severely impedes social and economic development. Along with South Asia, Sub-Saharan Africa has the largest number of people relying on traditional solid fuels for energy generation which is used for basic needs such as cooking and heating.
These sources have substantial adverse effects on health and productivity.
Sadly, the poorest segments of the population often pay the highest price (in money, time, and health) for the worst-quality energy services. The lack of access to modern energy also hampers enterprise development and the expansion of other opportunities. It undermines competitiveness and thus access to regional and global markets for African producers. It is a major factor in the slow progress in attainment of the UN mandated Millennium Development Goals (MDGs) and poverty reduction in Africa.
It is therefore imperative to address the continent’s energy needs in order to unlock its development potential. This will require increased investment to build the requisite infrastructure and the establishment of effective governance systems. Africa’s sustained economic growth will inevitably result in increasing energy demand and energy-related carbon dioxide (CO2) emissions. While it is recognized that Africa is the least contributor to greenhouse gases (GHG) emissions, the continent is among the hardest hit by climate change.
Therefore, although meeting urgent energy needs is a priority, it is also imperative to take into account environmental and climate change concerns to enable the continent to gradually embark on a sustainable low-carbon growth path and transition to a greener economy.
Africa is endowed with important energy resources, including both fossil fuels and renewable sources. If properly harnessed, these resources could help to sustainably meet the continent’s energy demand, while responding to the climate change challenge. To this end, African countries will need, among other measures, to tap innovative energy funding approaches, pooling various forms of financing including public, private, external and domestic resources. Furthermore, the global energy market is often characterized by high world fuel prices and recurrent price volatility.
African countries must also develop resilience to shocks, especially by improving energy consumption efficiency, increasing regional cooperation and developing alternatives to expensive conventional energy supply systems.
Africa is well endowed with a variety of non-renewable and renewable energy resources, which include crude oil, natural gas, coal, hydro-electricity, geothermal, biomass, solar and wind. Africa’s energy production is about 9.5 percent of the world’s total output, including 12.1 percent of the world’s crude oil production, 6.8 percent of the natural-gas output, 4.2 percent of hard coal and 4.6 percent of global hydro-electric power. The continent holds 9.6 percent of the world’s proven oil reserves, and this share will likely continue to rise with new discoveries. These resources are unevenly distributed, however. The majority of African oil reserves (and production) is located in Libya, Nigeria, Algeria, Angola and Sudan, which together account for more than 90 percent of the continent’s reserves. South Africa accounts for 98 percent of total coal production in Africa. The uneven distribution of resources underscores the need in this Policy to pay close attention to the diversity of situations.
Africa has significant potential in renewable energy which, if properly harnessed, could help meet a significant proportion of energy demand and allow the continent to respond to environmental impacts and climate change.