Africa’s grim prospects post-COVID-19 (2)

AS THE NATIONS of the world wait to see the end of the global pandemic of unprecedented proportions,  key issues that will shape lives, economies and countries’ fortunes after the pandemic are rapidly emerging and becoming obvious at a fast quip.  While the industrialised countries in the global north are frantically pulling intellectual and financial resources together and coming up with post-pandemic recovery strategies and programmes, the global south cannot afford to lag behind. In particular, Africa needs to urgently design its own coping strategies. Concerned international organisations and richer countries from elsewhere outside Africa may show solidarity, rendering some supports in cash or in kind while still grappling with their own internal crises,  Africa nonetheless needs its home-grown adaptation programmes and policies that are sector-specific and realistic,  with realisable goals.

In responding to the Coronavirus pandemic,  Africa must learn to internalise the externalities and turn misfortunes to advantage.  The depth of thinking and responsiveness of policies that would be needed to handle the consequences of the pandemic are expected to be robust,  far-reaching and with sustainable impacts. The peculiarities of Africa should inform response strategies as it will be very wrong to duplicate the strategies of other countries and apply them  wholesale in Africa. One of the peculiarities of Africa that must be at the centre of policy responses is the developmental issue involving energy deficit. This is at the core of Africa’s slow development,  poor economies, low resilience and vulnerability in many areas in mutually reinforcing ways.

Africa has to break the vicious cycle of poverty, underdevelopment, wars,  diseases,  food supply shortages and climate challenge.  In reality,  the climate challenge is both a cause and a consequence of poverty in many parts of Africa.  Economies that are dependent on extractive industries and commodity exports will have a hard time overcoming environmental challenges. The politics associated with commodity extraction and trade – officially or informally – are both complex and convoluted and, in many cases, opaque. The lack of transparency and accountability tends to elevate improper practices that backfire negatively on the generality of the people, in turn helping to perpetuate poverty and associated ills. Irresponsible mining activities,  for instance,  has caused a lot of negative environmental consequences such as pollution, deforestation or displacement of the rural poor who depend on limited resources for survival.

The global agenda of Sustainable Development Goals (SDG) has laid down some templates to guide policies in an inclusive and all-encompassing way.  Most countries of Africa have failed to meet even one of those goals set under the SDG.   Diseases still remain rampant.  Poverty is still a commonplace. Illiteracy level still remains unacceptably high.  Access to health care facilities still remains elusive, with embarrassing continental annual figures of under-five mortalities. Hunger remains a menace and the gap between the government and the governed still remains wide.

The level, spread and persistence of poverty push many people into activities that are environmentally unsustainable, making them to contribute to activities that endanger the environment and exacerbate climate change. The cutting down of trees by the poor to make charcoals,  for instance,  is a major cause of deforestation and global warming. This is in contravention of the SDG 7, which is to ensure access to affordable, reliable, sustainable and modern energy for all.

The energy challenge in Africa has a variety of causes,  manifestations and outcomes.  It affects the households and institutions in various ways. In trying to improvise,  they embark on activities that harm the environment thus undermining the potential for future survival and sustainable wealth creation. The relevance to post-COVID-19 recovery thus becomes clearer as survival instincts may push many more people into more environmentally unfriendly activities in their bid to survive. In the post-COVID-19 recovery in Africa, energy will make a whole lot of difference. Energy will take preeminence, with the use in transportation, in offices,  at industrial level,  in hospitals, household level, schools or for telecommunications. The power to generate wealth will put energy at the forefront as a major determinant of progress.

It will affect the health system and how well it responds to overcome the pandemic on the continental scale.  This will in turn affect the economy and the coping capacity of most people in terms of income. For the most part,  Africa’s economy remains predominantly informal.  That,  in itself, poses measurement and monitoring problems. Its wealth-creating potential remains largely a potential, waiting to be unlocked. One area of such potential is energy. Africa’s energy generation and consumption, as recently as 2018, was estimated at about four per cent of that of the US.

On energy access in

Africa, a strong case has been made for a variety of sources, particularly the renewables, which include wind, solar and geothermal. The use of natural gas has gained some support, traction and recognition. Africa Energy Outlook 2019 is a publication of the International Energy Agency  (IEA) with analysis on the continent and a greater focus on the Sub-Saharan Africa, based on in-depth, data-rich and country-specific analysis. Africa Energy Outlook 2019 presented the IEA’s detailed work to date on energy across the African continent, with a particular emphasis on sub-Saharan Africa. It includes detailed energy profiles of 11 countries that represent three-quarters of the continent’s GDP.  Some of them are Nigeria, Ghana,  Kenya and South Africa.

The  IEA’s report alerted that “rapid economic and population growth in Africa, particularly in the continent’s burgeoning cities, will have profound implications for the energy sector, both regionally and globally. The stage is set for a new wave of dynamism among African policy makers and business communities, with falling costs of key renewable technologies opening up new avenues for innovation and growth. Chief among the challenges is providing universal access to reliable, modern, affordable and sustainable energy. How to do this is a crucial component of Africa’s Agenda 2063 strategic framework for the continent’s future and of global Sustainable Development Goals. Realising the potential of the continent’s natural gas and mineral resources presents another key challenge.” The COVID 19 crisis may have added more complications to this challenge, particularly if the oil and gas sector remains in the uncertain territory for long.

Whether the important policy insights provided by the report “to help African energy stakeholders achieve the continent’s growth ambitions in a sustainable and inclusive manner” will be translated into action remains to be seen. In ordinary times,  more than 500 million people in Africa live without electricity.  Recent trends, however,  have shown that over 60 per cent of Sub-Saharan Africans will still lack access to electricity by 2020. The projection must have been made  even worse now with the COVID 19 pandemic. On a global economic scale,  recovery will depend to a significant extent on electricity supply and access to it. The difference between other developing countries and Africa in the rate of recovery could be projected with some degrees of certitude. Africa has an average electrification rate of 24 per cent, while the rate in the rest of the developing world lies closer to 40 per cent. The existing energy infrastructure in Africa will be unable to cope in the aftermath of Coronavirus pandemic.

Countries relying mostly on hydroelectric power will suffer great setbacks  relating to climate change. Nigeria,  which has struggled for more than a decade to increase its power generation capacity to no appreciable avail,  will experience more of the same. What to expect from all countries that depend on hydroelectric power is exemplified by the Zambian experience in which a clear direct correlation can be established between climate, energy supply and livelihoods.  The progressive decline of electricity supplies in recent years has been a consequence of climate change manifesting in the form of fewer rains and the declining volume of water at the Kariba Dam,  resulting in far lower power generation. Zambia faces electricity crisis from global warming and the prices of electricity may rise in that country that desperately needs to diversify power source.

Lake Kariba, the world’s largest man-made lake by volume, has reportedly dropped by six metres, as a consequence of the climate change currently affecting the southern Africa, with a pronounced impact on the Zambezi basin, where Lake Kariba is located. About half of Zambia’s electrical power comes from the Kariba hydropower source. Available water for hydropower in the reservoir is now at about a quarter of its capacity, leading to power cuts in Zambia and Zimbabwe, two countries very dependent on hydro power. Add the seasonal drought and its effect on food security to the inadequate power supply and its impacts on alternative livelihoods in both countries  before a pandemic, then the picture of what to expect post-pandemic becomes easier to figure out.

The report on a study, published in August, 2018, by the Centre for Global Development  (CGD) revealed that, in Sub-Saharan African countries with unreliable power, outages cost companies as much as 31 per cent in sales. “More than 25 per cent of businesses surveyed in some of Africa’s biggest economies cited losing double-digit sales due to power outages,” the CGD reported. The study found that, “in some of the continent’s largest economies like Nigeria, Angola, and Ghana, more than 25 per cent of businesses lose double-digit sales due to power outages—with some firms averaging losses of 31 per cent.” It added that “the largest grouping of firms are just surviving. Thanks to a heavy reliance on generators their sales are mostly unaffected by power outages, but they average just three per cent growth.”

The outliers,  however, are some firms across the continent, which, according to the report, “have grown rapidly despite frequent power outages—even in very poor countries” In middle-income countries, especially in Southern Africa, many firms suffer relatively limited power outages and don’t see significant effects on sales. The report disclosed further that the hardest-hit firms average more than 200 hours without power each month, while even the least-affected firms average more than 10 hours per month. Some individual firms, according to the report, lose over 70 per cent of their sales. It posited that “… it’s clear that across the continent, a huge number of firms suffer high costs and lost sales.”

The energy challenge in Africa presents huge opportunities for wealth creation. “Better power infrastructure could enable business growth, create jobs, and produce better economic outcomes for the region,” the CGD report noted. But,  foremost,  governments must relax official hold in form of monopolies and be ready to open the space for private sector participation. The boom in telephone and telecommunications in Africa in the wake of the GSM revolution in the past two decades could be a good guide, as it created millions of jobs and has helped Africa’s leapfrog from the traditional system of cable-based telephony to the wireless mobile, employing various cadres of people in technical, managerial, sales and service delivery functions. In the same way,  Africa can leapfrog from the grid-based electricity system to off-grid system powered by renewable energy sources and managed by private entities. The fears of higher costs of electricity may be unfounded after all as abundance of renewable energy supplies will most likely drive down costs in the short to medium term.

The main challenge here is that all countries are unlikely to act in the same way, on the same scale and with the same speed.  To cope with life after COVID-19, energy policies that will economically empower most Africans and help to improve their livelihoods will most likely assist in boosting individuals’ incomes and national revenues.  The spillover effects on health and nutrition outcomes would be significant. These are expected to help many individuals and households to overcome hunger,  another pandemic capable of killing many Africans after the Coronavirus pandemic.