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SOUTHNEWS

 
No. 330,  19 August 2020

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COVID-19 impact actions across Africa

First-hand information from policymakers and leading experts

Africa, particularly sub-Saharan Africa, has generally low levels of socio-economic development and modern energy usage. The COVID-19 outbreak and its consequent economic downturn present additional challenges and pose questions requiring urgent answers. Success of the pandemic measures depends upon, among other elements, a strategic vision reflecting current situation and future uncertainties; and aligning interests of all stakeholders. In order to build such a strategic vision, the South Centre, the African Energy Commission (AFREC) of the African Union and the Clean Energy Innovations Partnership (CEIP) are organizing  a series of webinars entitled “Energy for sustainable development in Africa in the post-COVID-19 world – looking for the New Normal” and have invited leading experts to facilitate information gathering and to generate ideas for further work on strategies development and stakeholders’ engagement necessary for the continent’s energy transition in the post-COVID-19 world.
 
In the first webinar “COVID-19 impact actions across Africa. First-hand information from policymakers and leading experts”, held on 16 July 2020, we discussed the multifaceted effects of COVID-19 in the continent and on different stakeholders and which approaches experts and policy makers propose to better respond to the crisis and be well prepared for the recovery era.

 
 

 
The webinar highlighted that COVID-19 has had multifaceted implications on the energy sector and by this way on the entire socio-economic systems of the African continent and added new challenges, but also opportunities for energy for development. The challenges, that governments now face, are that many are forced to prioritize their spendings and see their budgetary commitments constrained, while their revenues decline due to the economic recession. The oil and gas sector has been severely impacted with oil demands falling to an all-time low this year, with implications on oil prices, which reduced by 50-60%. This has had major impacts on the economies of African oil exporting countries.

Utilities too are facing revenue shortcomings and the issue of excess capacity due to the plunge in demand as countries went into lockdown mode. Electricity generation had to be reduced accordingly, with some utilities reducing their electricity generation up to 40%. While the energy demand has partially recovered recently, it has not yet jumped back to pre-crisis level. Affordability of electricity continues to be an issue, especially in times of the crisis. The economic recession has resulted in lower household incomes and made it more difficult for consumers to pay their electricity bills. In some instances, governments have requested utilities to suspend or put a moratorium on tariff payments in order to support affected households. This, however, results also in further financial pressure on utilities.

There is also a gendered impact of the pandemic in Africa. As in other regions, the pandemic reveals and intensifies existing inequalities, including gender-based inequalities. Women, as a key force in the ‘care economy’, required more access to electricity appliances in the crisis in order to meet the increased care and household needs such as home schooling and elderly care. Another gendered impact has been the uptake in reports of domestic violence during the lockdown period. Unsafe cooking practices prevail, and the continent is in fact the only region where charcoal and firewood-based cooking are on the rise. This issue should be part of the top priority of any post-COVID recovery package for the continent. The emerging success of e-cooking technology in many developing countries such as in India and Ecuador should be explored for Africa.

The transition to renewable energy has also seen setbacks due to the pandemic. Both on the supply and demand side countries have experienced disruptions, while in some countries planned projects are even expected to be dropped due to reshuffling of priorities.

Despite the challenges, the webinar discussed a variety of approaches to face the crisis. As an overarching element, continent wide cooperation was stressed to mitigate the immediate impact of the pandemic, but also to facilitate the energy transition. The drop in electricity demand has resulted in excess capacity in some parts that could be traded with countries and regions that have a deficit. In order to build such cooperation, the limitations in transmission need to be urgently overcome by expanding the network of transmission lines. Electricity trade can further help to facilitate renewable energy connection to the grid. Off-grid and mini-grid solutions are to be supported as well, as they can provide electricity to remote and rural areas. In similar ways, knowledge and experience sharing were also identified as another important step in the right direction, as some countries are frontrunner countries in the use of renewables such as solar photovoltaic (PV) and wind technologies. These countries could share their views so as to avoid others repeating the same mistakes and to accelerate the efficient and upscaled use of renewables in the continent. 

While the oil and gas sector has faced tremendous challenges, it has also witnessed increased cooperation among member countries of the Organization of the Petroleum Exporting Countries (OPEC). It was urged to expand such cooperation also in the African continent in order to develop energy sectors. It is predicted that oil and gas will remain important energy sources for decades to come and therefore, strategies to build oil refining capacities and cross border trading are essential for Africa. In order to make the African oil and gas sector more climate compatible, increasing efficiency and technology development, such as carbon capture technologies, are to be promoted. 

Strategies to support at household level include for instance the flexible payment schemes, restructuring of tariffs, targeted subsidies or potentially eliminating utility cut-offs in times of the crisis and in the recovery phase.

Based on the intersectionality of COVID-19, energy and gender and to facilitate women empowerment in this context, women need to first and foremost be part of the decision-making process and gender responsive solutions need to be integrated in policies and recovery packages. Special protection packages, including financial provisions, could be crafted to support women and women energy entrepreneurs. To tackle the issue of unsustainable and unhealthy cooking practices, liquefied petroleum gas (LPG) use might offer the fastest entry point as an alternative cooking fuel, especially for remote areas, and electric cooking is also a promising and cleaner alternative that needs to be explored further.   

Financial support and large-scale investments are fundamental to many of the proposed measures. Governments, development banks and other actors have to act as facilitators by mobilizing funding at scale and aligning immediate financing with the long-term energy ambitions of the continent. The African Development Bank (AfDB)’s countercyclical support to governments and the COVID-19 response facility are important mechanisms in this regard. Financial relief helped governments to continue funding their obligations and also to sustain their utilities. The financial assistance needs to, however, translate from the macro level also to the local level to reach small and medium-sized enterprises (SMEs) and mini-grid and off-grid providers.

Ultimately, the discussions during the webinar emphasized that the varied impact of the pandemic requires solutions that are grounded in the interplay of technology, policy, finance, and political will. 

Authors: Rajesh Eralil is Programme Officer of the Sustainable Development, Climate Change and Gender Programme (SDCCG) and Youba Sokona is Senior Adviser on Sustainable Development of the South Centre.

For more information on the webinar series, please go to: https://www.southcentre.int/sc-webinar-series-energy-for-sustainable-development-in-africa-in-the-post-covid19-world-looking-for-the-new-normal/
SOUTHNEWS is an e-newsletter service of the South Centre providing information and news on topical issues from a South perspective.

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For more information, please contact Anna Bernardo of the South Centre: Email bernardo@southcentre.int, or telephone +41 22 791 80 50.
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