Kofi Annan Proposes Drastic Measures To Democratize Electrical Power In Africa

Written by Dana Sanchez

Africa’s poorest households are spending around 20 times more per kilowatt hour on lighting than Africa’s richest, and Kofi Annan is calling for drastic measures to democratize electrical power in Africa.

He wants Africa’s leaders to start an energy revolution that connects the unconnected, and meets the demands of consumers, businesses and investors for affordable and reliable electricity.

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

Annan calls for a low-carbon energy infrastructure — renewable energy.

“We categorically reject the idea that Africa has to choose between growth and low-carbon development,” Annan said in a prepared statement. “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 Africa Progress Panel launched its annual report Thursday at the World Economic Forum in Cape Town. Entitled “Power, People, Planet: Seizing Africa’s Energy and Climate Opportunities,” the report asks African governments, investors, and international financial institutions to significantly scale up investment in energy to unlock Africa’s potential as a global low-carbon superpower.

The report said Africa’s poorest households are spending around $10 per kilowatt hour on lighting – 20 times more than Africa’s richest households measured on a per-unit basis. By comparison, the national average cost for electricity in the U.S. is $0.12 per kilowatt hour and in the U.K., it’s $0.15 per kilowatt hour. Africa’s poorest households living on less than $2.50 USD a day collectively spend $10 billion a year on energy-related products such as charcoal, kerosene, candles and torches, the report said.

This represents significant market failure, the report said. Low-cost renewable technologies could reduce the cost of energy, benefiting millions of poor households, creating investment opportunities, and cutting carbon emissions.

G20 is an international forum for the governments and central bank governors of 20 major economies. Members include 19 countries — Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the U.K. and the U.S. — along with the European Union. The E.U. is represented by the European Commission and by the European Central Bank.

The report calls for a tenfold increase in power generation to provide all Africans with access to electricity by 2030. This will reduce poverty and inequality, boost growth, and provide the climate leadership missing at the international level, according to the press release.

Annan is chairman of the Africa Progress Panel, a 10-member panel with headquarters in Geneva that advocates for equitable and sustainable development in Africa. The panel was originally formed through a U.K. government initiative and it releases the Africa Progress Report annually.

Secretary-general of the U.N. from 1997 to 2006, Annan was awarded the Nobel Peace Prize in 2001. He is credited with bringing new life to the U.N. and showing effective moral leadership on international issues. Born in Ghana, Annan was the first U.N. secretary-general from Sub-Saharan Africa.

Other members of the Africa Progress Panel include Bob Geldof, Irish musician, businessman and campaigner against poverty; Graça Machel, Mozambique-born advocate for women’s and children’s rights, and wife of Nelson Mandela; Strive Masiyiwa, Zimbabwean CEO of Econet Wireless and internationally known for leadership in campaigning against corruption; Linah Mohohlo, governor of Botswana’s Central Bank; Olusegun Obasanjo, president of Nigeria from 1999 to 2007; Robert E. Rubin, who served as Secretary of the Treasury to President Bill Clinton starting in 1995; and Ivorian Tidjane Thiam, CEO of the London-based international financial services group Prudential plc.

The 2015 Africa Progress Report urges African governments to:

  • Redirect the $21 billion US spent on subsidies for loss-making utilities and electricity consumption – which benefit mainly the rich – towards renewable energy investments and connection subsidies that deliver energy to the poor.
  • Harness Africa’s vast untapped renewable energy potential and use the region’s natural gas to provide domestic energy as well as exports.
  • Cut corruption, strengthen regulations, make utility governance more transparent, and increase public spending on energy infrastructure.

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

And the report is calling for a global connectivity fund to drive investment in on- and off-grid energy with a target of reaching an additional 600 million Africans by 2030. Financial institutions and aid donors should do more to unlock private investment through mitigation finance and risk guarantees, according to a prepared statement.

Africa is well positioned to play a leadership role in climate change negotiations, Annan said. Countries like Ethiopia, Kenya, Rwanda and South Africa are emerging as front-runners in the global transition to low-carbon energy.

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