Africa must reform energy sector to boost growth, IEA says, urges $450bn investment

Paris-based body is energy watchdog to the world's industrialised nations.

Sub-Saharan Africa’s energy sector needs overhauling to help power its economic and social prosperity, the IEA said on Monday.

The International Energy Agency, unveiling its first-ever Africa Energy Outlook at a London press conference, said increasing access to modern forms of energy was critical in a region where two-thirds of the population—or 620 million people—currently live without electricity.

“A better functioning energy sector is vital to ensuring that the citizens of sub-Saharan Africa can fulfil their aspirations,” said IEA executive director Maria van der Hoeven.

“The energy sector is acting as a brake on development, but this can be overcome and the benefits of success are huge.”

The Paris-based IEA, energy watchdog to the world’s industrialised nations, added that almost 730 million people in sub-Saharan Africa relied on dangerous and inefficient forms of cooking, with solid biomass—fuelwood and charcoal—outweighing all other fuels combined.

Van der Hoeven told journalists in London that Africa’s energy sector needed to become “a driver rather than brake” to economic growth.

The organisation concluded in its report that Africa’s energy resources were “more than sufficient” to meet the population’s needs, while making three specific recommendations.

The IEA called for an extra investment of $450 billion (355 billion euros) in power generation, in order to halve power outages and gain universal access to electricity in all urban areas.

It urged deeper regional cooperation and integration, which would enable large-scale power generation and transmission and stimulate cross-border trade.

The agency also appealed for better management of energy resources and revenues in the region, with “robust and transparent processes” to encourage more effective use of oil and gas revenues.

These three recommendations would help boost sub-Saharan Africa’s economic growth by almost a third by 2040, according to the IEA.

It estimated that they would deliver an additional decade of growth in per capita incomes by 2040, while the proposals would also bring electricity to an extra 230 million people.

“Poor electricity infrastructures is a major barrier to economic and social developement in the continent,” added the IEA’s chief economist Fatih Birol.

“Currently if there are $3 invested in the energy sector in sub-Saharan Africa, $2 go to the project which exports African energy to other continents (Europe, North America, Asia) and $1 goes to provide domestic energy services to the Africans.”

He added: “600,000 people die every year prematurely because of the indoor pollution created by use of biomass for cooking—and this is the second cause of premature death in sub-Saharan Africa after AIDS.”

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