Harare – Africa needs to invest at least US$40 billion per year in the energy sector to close a yawning power deficit which has retarded economic development, a new report says.
The African Centre for Statistics and the United Nations Economic Commission for Africa’s Private Sector Development and Finance Division presented the report at a virtual ministerial meeting on “Trends of Energy Prices in Africa” this week.
The report indicates that at least 600 million people in Africa do not have access to electricity, and 900 million have no access to clean cooking fuel. Electricity access rates in 24 countries – including SADC member states DRC, Lesotho, Malawi, Zambia and Zimbabwe – are below 50 percent.
“Africa … needs to generate to 250GW up to 2030 and investments of US$40 billion per annum are required to make this a reality,” the report reads.
The continent’s over-reliance on fossil fuels and biomes was cited as a drawback.
“Households use 86 percent of biofuel and waste energy for cooking, while the transport sector consumes 78 percent of oil. Natural gas is mainly used in industrial sector.”
ECA Executive Secretary Dr Vera Songwe said Africa needed to increase its energy investments to avoid missing the Sustainable Development Goal No. 7, which aims to ensure access to affordable, reliable, sustainable and modern energy for all countries.
She also urged countries to ensure cost reflective pricing of energy.
“There is no way Africa can build forward better if we do not make adequate investments in energy and ensure affordable access for all,” she said.
Director of the African Centre for Statistics Mr Oliver Chinganya added: “Access to cheap and clean energy is an essential component of Africa’s transformation and industrialisation.
“In the context of AfCFTA (Africa Continental Free Trade Area) deployment and implementation, supplying economies with affordable fuel is integral to supporting actions for faster achievement of the Sustainable Development Goals and Africa’s Agenda 2063.”
The report recommends that countries must provide an enabling environment for crowding-in private sector investments in electricity sector; apply cost reflective tariffs while paying attention to efficient generation of electricity to lower the costs; and provide incentives and mechanisms to increase the share of renewable energy in the power systems.
The study also highlights the need for countries to introduce natural gas as a transitionary fuel to replace coal and facilitate full deployment of renewables