Educationalizing and institutionalizing reforms for energy uptake in Africa

With favorable educational and institutional reforms, the potential in Africa’s budding energy sector can be unleashed and leveraged to enhance sustainable and inclusive growth in the continent. Only by doing this can Africa ensure an economic freedom and its assertive place and space in the global arena

The cost of electricity in Africa is estimated at 3 times more than that in the USA and Europe, and frequent power shortages cost African economies 1 – 4% in lost GDP annually. This severe shortage is undermining efforts to achieve more rapid social and economic development. As the Sustainable Development Goals replace the Millennium Development Goals in less the 90 days, there is an urgent imperative to look at what needs to be done to reverse this spiral trend, as well as to adapt to climate change and spur inclusive economic growth for all.

Fossil Fuels vs Renewables: a Cost Perspective

Fossil-fuel based power generation represents the single largest source of electricity generation in Africa. However, fossil fuels are the most expensive means for generating electricity. This high cost is reflected at community level. While kerosene lighting systems cost households USD 4–15 per month to run, renewable sources are increasingly economically feasible. At a national level, the cost of fossil fuels is tremendous. For instance, in 2010, African countries imported USD 18 billion worth of oil, a figure more than the entire amount Africa received in foreign aid. In this context, the implication of instituting renewables is massive cost savings to African economies. 

Leapfrogging Africa to the Clean Energy Model: a Financial and Climate Imperative

Decarbonizing Africa’s energy and inclusive socio-economic growth are not mutually exclusive. The current low installed capacity represents an opportunity to leapfrog Africa into the clean energy model with zero or minimal transition costs. Just as Africa managed to skip past reliance on landlines and leapfrogged straight to mobile phone use, so it can entirely leapfrog fossil fuel reliance currently targeted for phase out by 2100, as advocated by the UN. It is projected that energy de-carbonization globally could result in net energy savings of USD 71 trillion by 2050. 

Ecologically, a transition to clean energy provides huge savings through the prevention of significant air, soil and water pollution, and avoids ecological degradation by conserving ecosystems. While Africa’s emissions are negligible, the 2015 Africa Adaptation gap reports that Africa is projected to suffer disproportionately from the effects of climate change, primarily because its key economic sectors — among them energy, agriculture and tourism— are highly climate sensitive. With adaptation costs for Africa projected to rise to USD 100 billion by 2050 under a  20C window, taking steps to curtail any future emissions will be in the continent’s self interest. Putting all this in perspective, it becomes clear that a clean energy future makes sense for the African continent.

The Role of Educational and Institutional Reform for Renewables Uptake: An Urgent Policy Imperative 

In Africa, it is not necessarily a lack of ideas or innovations, but rather the enabling environment for implementation. Adequately empowered human capacity to seize opportunities in green energy, as well as institutionalizing best practice, is an area that will need to be fostered if the continent is to actualize a carbon free energy future and accelerate inclusive economic growth. 

Revolutionalising Africa’s Education: A Fit for Purpose Necessity

Lack of skilled manpower has limited the success of renewable energy technology (RET) development in the continent. Africa’s higher education system needs to be reformed to be more inclusive, and align to contemporary opportunities in sectors such as renewable energy, while not compromising on the competitiveness of its scholars. Ideologically, Africa’s education system must be reformed to be Africa-centered and globally competitive — adapting best global practice to solve the continent’s challenges, while also creating products and services for export to the world markets.

 The lack of alignment of the education sector to contemporary areas is limiting the employability of African graduates. It is documented that most educated people in Africa confront a mismatch between their training and available opportunities. In South Africa, for instance, firms report 600,000 vacancies, while 800,000 young university graduates are unemployed. Specifically in the RE sector, Africa is losing out in this budding sector because there are “very few” African higher institutions offering renewable energy programmes. Appropriate education sector reforms will be vital in expanding skills and training in this area to ensure adequate human capacity. This will incentivize private sector investment, seeing that adequately skilled labor is a key prerequisite to attracting investments.

Curriculum Reform

Education curricula across the continent need to be reformed to reflect an African ideology; contextualized to Africa’s accurate history and circumstances, Africa-centric, centered on solving the continent’s contemporary challenges, while technically benchmarking against global best practices, thus becoming globally competitive. Universities and colleges should introduce programmes that directly contribute to solving contemporary developmental challenges, such as infrastructure and healthcare deficits, with the social sciences and arts building the right mental attitude to enable Africans define an intellectual cause for their education. 

Education Finance Reform

National governments as well as the private sector should come up with scholarship and grant policies that ensure financing is targeting programmes that reflect the greatest developmental needs for countries and business so as to attract students to these programmes and ensure adequate and skilled manpower to confront these challenges. Private sector participation fosters sustainability of such initiatives. For instance, companies in Africa are offering corporate scholarships to outstanding students to study in fields relevant to their business.

Policies Restructuring Tertiary Institutions’ Research and Capacity Building

At a tertiary level, there is a need for policies that promote continuous improvement in the quality of training and research. Institutions of higher learning should institute policies that promote continuous capacity building of the academic staff. These can be policies offering periodic grants for fellowships to top universities across the globe, policies governing institutional collaborations with benchmarked global universities as well as academic exchange programmes. To promote research, institutions can formulate policies paving way for external research funding. These can be through partnerships with the government, private sector, NGO sector or with other research oriented academic institutions.  

Creating an Enabling Institutional Environment  

Lack of institutional capacity for Africa’s RE sector is reported as disadvantaging progress in this sector.

Tax Waivers for RE Technologies

Government should develop policies zero-rating taxes on all necessary imported RE technologies, including relevant equipment, tools, spares etc. This will spur the development of institutions, industries and enterprises around this ecosystem and along its value chain. Examples of tax based incentives to accelerate renewables can be cited globally. In the USA, the state of Washington has constituted several tax incentives for manufacturers, research and development firms, and certain high technology companies intended to spur growth and job creation in sectors including renewables.

Mobilizing Sources for Funding Africa’s Renewable Energy Development

While education and institutions are paramount, financing these developments is central. The cost of financing Africa’s energy development as a function of time and population growth to year 2040 is astronomical. It is projected that the region will require investment of up to USD 490 billion by 2040, for new electricity generation capacity alone. An aggressive focus on renewables will require 31% additional investment by 2040, but result in 35% higher installed capacity base. Factoring in transmission and distribution costs of USD 345 billion over the same period yields a total cumulative capital requirement of up to USD 800 billion by 2040. This could translate to about USD 32billion annually. In light of diminishing official development assistance (ODA) (as share of total external financing, declined from 38% in 2000 to 27% in 2014) to the continent, the need to look internally and consider domestic fund mobilization to leverage international support as part of long term financing is increasingly becoming an attractive option.

Bottom Line

With favorable educational and institutional reforms, the potential in Africa’s budding energy sector can be unleashed and leveraged to enhance sustainable and inclusive growth in the continent. Only by doing this can Africa ensure an economic freedom and its assertive place and space in the global arena.