Energy in sub-Saharan Africa Spotlight

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Credit: Robert Finocchio and Solar Sister.

Credit: Robert Finocchio and Solar Sister.

Introduction

Home to almost a seventh of the world’s population, sub-Saharan Africa (SSA) is the world’s most economically disadvantaged region, but also one of the world’s most rapidly advancing regions.  Despite the fact that millions of Africans still live without access to the modern amenities we take for granted, living conditions have vastly improved.  Its countries’ primarily export-oriented economies have a total GDP of $1.643 trillion USD (2013), which is comparable to the GDP of Australia and Canada.  However, despite significant economic and social gains, access to electricity is severely limited, unreliable, and largely confined to urban areas.  Concerted efforts to increase electricity access during the 1970s and 1980s have been largely unsuccessful.

Since 2000, the region’s GDP per capita has more than tripled and average life expectancy has increased by 7 years.  Adoption of renewable energy technologies is on the rise, and global business is becoming interested in the rapidly growing of economies of countries such as Kenya, Nigeria, Cote d’Ivoire, and Ghana.  Growth is expected to accelerate in the coming years as urbanization continues, SSA’s emerging middle class grows, and infrastructure continues to be developed.

However, SSA is still faced with a staggering problem: energy poverty.  Energy poverty is a vicious cycle of poverty and decreased quality of life that many people in rural areas become locked into because of lack of access to electricity and clean cooking fuels.  Expanding existing electricity grids as a means of achieving universal electrification is out of the question because it would require extending power lines to sparsely distributed rural populations, which would be incredibly costly.  However, a number of new technologies are paving the way for innovative and novel solutions to energy poverty that work around some of the issues associated with efforts to alleviate energy poverty.  In this spotlight, we will describe the current energy situation in SSA, how energy poverty manifests itself, what the political and regulatory landscape is like, give a rundown of the African energy market, and provide some recommendations for budding social entrepreneurs who are interested in doing business in SSA.

 

Contents

Energy usage in sub-Saharan Africa

This section provides a general overview of energy usage in SSA.  How is energy used in SSA and for what purposes?  What forms of energy are used and why?

Energy Poverty

What is the nature of energy poverty in SSA, and what factors have precipitated it?  What sorts of problems does it cause and who does it impact the most?

Political and Regulatory Environment

Here we take a generalized look at policies and regulatory frameworks in SSA, with examples from countries that are commonly targeted by social enterprises highlighted.  This section also addresses different forms of corruption in SSA and how these forms of corruption affect business.

Investment and Market Environment

In this section we provide an overview of market structure and dynamics for products commonly sold by energy sector social enterprises in SSA.  We also touch on a few clever ways that social enterprises are helping customers pay for their product and methods for achieving last mile distribution.

Barriers to Entry

What exactly makes doing business in SSA challenging for social entrepreneurs?  This section provides an in depth look at a number of barriers to entry in target markets.

Case Studies

This section lists and describes a few successful social enterprises that do business in SSA.

Key Recommendations for Social Entrepreneurs

What should budding social entrepreneurs who are considering doing business in SSA know?  Here we provide a few key recommendations for social enterprises that are seeking to do business in SSA.

References and Resources