Africa and Covid-19: Economic recovery and electricity access go hand in hand

Covid-19 is threatening the lives of millions of people and disrupting every sector, including across Africa. In just a few weeks, the virus and measures to contain it have brought many African economies to a standstill, harming lives and livelihoods across the continent. As lockdown measures cut disposable income for electricity and endanger energy suppliers, Africa’s vulnerable energy sector may be weakened further.

Such a blow to Africa’s energy sector could not only jeopardise fragile recent progress in expanding access to energy but also undermine energy’s vital role in health systems’ fight against Covid-19. As African leaders and policy makers co-ordinate their policy responses to the pandemic, they must continue to push to achieve Sustainable Development Goal 7 (SDG 7): ensuring access to affordable, reliable, sustainable and modern energy for all by 2030. In the short term, this means speeding up planned connections and implementing decentralised energy solutions. These can both help reduce the impact of the virus and provide vital energy access to the most vulnerable communities.

Africa’s energy sector is weak because infrastructure is unreliable and non-resilient, and financing is lacking. Over half the population on the African continent live without access to modern energy.

To build more robust infrastructure systems that can address future systemic threats and also attain universal access to electricity by 2030, grid densification is necessary. According to the latest IEA geospatial analysis, however, mini-grids and stand-alone systems using renewable energy sources are the least-cost solutions for half of all the new connections needed to reach SDG 7, connecting almost 450 million people by 2030. 

The pandemic is hurting energy production, distribution, and consumption at many levels. African oil‑ and gas‑producing countries are also suffering from a global collapse in demand and prices. Renewable energy projects are slowing down, and utility companies are facing revenue losses. As the economy deteriorates, especially for the poorest and the informal sector, an increasing number of African households are unable to pay their bills, including electricity. In response, governments are implementing solutions to keep their economies afloat. Nigeria’s largest power distribution company, Ikeja Electric, has announced that during the two-week, stay-at-home period, non-paying customers will not be disconnected. The president of Ghana recently announced that the government would fully cover electricity bills for low-income households and reduce electricity bills by 50% for all other consumers for the months of April, May, and June. Burkina Faso, the Democratic Republic of Congo, Gabon, and Mali are also covering electricity expenses for their residents.

Governments are also responding to the difficulties of the off‑grid sector, which has made significant progress and lifted millions of Africans out of poverty over the past decade. According to the Global Off-Grid Lighting Association (GOGLA), 50% of off-grid energy companies are in serious financial trouble: 67% of surveyed mini-grid operators and 75% of surveyed solar home system suppliers have funds to cover only two months or less of operating expenses. In Kenya, Senegal and elsewhere, governments have stated that off-grid energy operations are an essential service and have allowed several companies to remain open. Kenyan telecommunications operator Safaricom has also announced that it is waiving all transaction costs on mobile money transfers under the equivalent of USD 10. This waiver was a response to President Uhuru Kenyatta’s directive on increasing the use of mobile money in order to curb the risk of spreading Covid-19 through the handling of banknotes.

Access to energy is crucial in preventing the spread of global health pandemics such as Covid‑19 and in helping people cope with lockdown measures. Health centres need electricity. Energy is needed to provide clean water for hygiene purposes and to provide communications services to allow people to connect with family, friends, clients and colleagues while maintaining social distance. But, in sub-Saharan Africa, close to 60% of health centres have no access to reliable electricity, and nearly 600 million people have no electricity at all.

In the short term, the region needs to push for decentralised energy solutions for the health care sector and speed up planned connections wherever possible in order to combat the current global health pandemic. Taking the initiative, Nigeria’s Rural Electrification Agency recently announced a programme to immediately provide solar home systems and solar mini-grid solutions to primary health centres, Covid-19 isolation centres, and Nigeria Centre for Disease Control reference laboratories across the country. By partnering with the private sector, the government will be able to deploy electricity quickly and provide reliable power to millions of people.

Innovative solutions from African entrepreneurs are also key to help strengthen the links between health care and energy. A renewable energy company in Somalia, where there is only 1 doctor per 50 000 people, has developed an innovation that provides health care access to rural communities. Their solar-powered backpack supplies energy to Bluetooth-enabled medical devices that measure patients’ vital signs and upload them to the cloud when health workers are connected to a network. Technologies like these will allow governments to more quickly screen for disease symptoms in rural zones and communicate findings to hospitals in urban areas. Various similar initiatives are emerging, including solar-powered health centres with electricity storage that can be easily and quickly installed and used as clinics or pharmacies, upon need.

In the long term, the international community should continue efforts made to advance the SDG 7 agenda. 

By implementing policies that increase energy access – in particular, by supporting decentralised energy suppliers – governments will avoid reversing continental progress. Measures could include targeted regulations, indirect financial support through tariffs, and import duty exemptions. In Kenya, for example, a favourable tax environment has contributed to the impressive expansion of electricity access – from 25% in 2013 to 75% in 2018. Decentralised solutions such as solar home systems have impacted millions of lives.

Governments should strive to maintain a predictable business environment by avoiding changes in regulation, such as the inclusion of taxes, which may delay or hamper the economic viability of decentralised solutions. To benefit from all the decentralised solutions, governments can develop transparent, integrated, electricity access programmes to combine grid projects with mini-grid deployment and the distribution of solar-home systems. Improving data on electricity access is also fundamental to support the development of these programmes, track progress and better inform policy makers. Reliable, timely data are vital for creating smart, sustainable policies.

The Covid-19 pandemic risks dismantling the recent progress made towards achieving SDG 7 in Africa and casting millions of people back into energy poverty. We must join hands globally to increase investment in and use of decentralised energy solutions, and further expand data on access to electricity. Together, we can help Africa not only to recover economically after the pandemic but also to reach the goal of universal access to electricity by 2030. These are mutually supportive goals.

Related topics and perspectives will be shared during the Africa Ministerial roundtable, feeding into IEA’s enhanced work with African partners.