Reliable energy access remains a major hurdle in many African countries, in comparison with other global regions, including South East Asia and Latin America which report 95% and 95.1% energy access respectively, only 40% of the African population as a whole has energy access. This deprives the region of enhanced business productivity and economic growth, and hinders the eradication of multidimensional poverty, as energy is central to all core indicators of poverty, including monetary poverty, poor access to education and insufficient access to basic infrastructure services like water, sanitation and electricity, thus highlighting the crucial role of energy infrastructure in Africa’s economic growth and sustainable development. This article discusses the current landscape of energy access in Africa and the impact of insufficient energy access on business operations and multidimensional poverty. It concludes with recommendations on energy access expansion in other African countries in line with lessons learnt from Morocco and Egypt of North Africa.
The current landscape of energy access in Africa
Energy access has no universally acceptable definition. However, it can be described as having reliable and affordable access to both electricity and clean cooking facilities that can be scaled up over time. According to the International Energy Agency (IEA), the global benchmark for energy access is 250kWh per year for rural households and 500kWh per year for urban households. Many regions globally have attained this benchmark. Still, it remains largely unattained in many African countries (Figure 1) due to insufficient power generation capacity, difficulties in managing energy infrastructure and attracting investments in the sector, and challenges in serving low-income users. About 82% of the 733 million people without access to electricity globally are in Africa.
Figure 1: Share of the global population with access to electricity, 2020
Source: Our World in Data
The degree to which insufficient energy access is experienced in Africa differs per region, as roughly 98% of the population of North Africans across Algeria, Egypt, Morocco, and Tunisia have near-universal access to electricity and clean cooking technologies (SDG 7.1); while only 48% of West Africans have access to electricity, according to Statista. Nigeria, a West African country, has the largest population without energy access globally with over 85 million people lacking access to electricity and clean cooking facilities. This disparity in energy access between the two African regions is influenced majorly by their different approaches to the formulation of public policies that promote major grid extensions, strategies which advance the expansion of renewable energy and gas networks, in addition to their dedication to rural electrification programmes. For example, Egypt, a North African country, grew from chronic power shortages to have a 25% surplus of electricity supply by adding 25.5 GW of new generating capacity between 2015 and 2019, which includes 1 GW of solar PV and nearly 840 MW of new wind capacity. Report shows that Egypt achieved this by introducing feed-in tariffs, and allowing long-term power purchasing agreements to attract more investments from independent power producers. A tangible result of these two policies is the development of the 1.8 GW solar PV park at Benban – one of the largest solar plants in the world. Furthermore, Morocco expanded its overall power generation capacity from 23.7 terawatt hours (TWh) in 2010 to 41.2 TWh in 2022, and its renewable electricity production from 2,700 GWh in 2011 to 7,000 GWh in 2020, by implementing a concrete regulatory framework and broader transition strategy which aimed first and foremost at market creation in the renewable energy sector. Morocco enshrined the right to sustainable development in its constitution and passed subsidiary legislations to allow tendering and auctions for large-scale solar and wind projects, thereby encouraging private investments in the sector. Finally, it fostered investor and lender confidence through the creation of competent “one-stop-shop” agencies like the Moroccan Agency for Sustainable Energy (MASEN).
Impact of insufficient energy access on business operations and economic growth
These strategies played a pivotal role in advancing reliable and affordable energy access in Egypt and Morocco with corresponding impacts shown in their overall economic growth, as a result of enhanced business operations, a rise in direct foreign investments, and an increase in job creation. Only 13% of Morocco’s population is unemployed, in comparison with the 41% unemployment rate in Nigeria as of 2023. In addition, Egypt ranks Africa’s 2nd largest economy in 2024 while Nigeria ranks 4th, despite having a population of 111 million and 218.5 million respectively. One reason for this is because, unlike Egypt, Nigerian business owners constantly grapple with insufficient energy access leading to stifled innovation and technological advancement, supply chain disruptions, disruptions in operations, limited expansion opportunities, and increased cost of production which cause a fall in profits and revenue, and an overall decrease in their contribution to the GDP. Data shows that Nigerian MSMEs contribute to the GDP by 48% and account for 84% of employment, but they lose about $29 billion yearly in profit due to insufficient access to energy. This establishes the significance of sufficient energy access in catalyzing business operations, enhancing investment landscapes and advancing economic growth.
Impact of insufficient energy access on multidimensional poverty
Energy access can be closely linked to multidimensional poverty in Africa as insufficient electricity is a central aspect of core indicators of poverty, which according to the World Bank include monetary poverty, insufficient access to basic infrastructure services including water, sanitation and electricity, and poor access to education. First, there is a causal relationship between sufficient access to electricity and a higher literacy rate (Figure 2). This is because sufficient access to electricity enhances digital learning in schools and at home through various technologies and the Internet. It aids the overall learning experience in classrooms and teaching performance and enables longer studying (or classroom hours) at schools. For example, in Kenya, it enabled existing teachers to provide extra teaching early in the day and late at night to make up for material not adequately covered during normal hours, due to a shortfall of staff. In certain situations, it promotes gender equity in education, especially in rural areas and poor households. This is because electrified classrooms have been found to generally motivate students in rural areas, including females, to attend classes and electricity specifically empowers young girls to connect, learn and gain inspiration from global leading women digitally. A report shows that schools and villages that have electricity access in Mali recorded lower drop-out rates, higher test scores, and higher proportions of girls entering secondary education. Additionally, female student enrollment increased by 23.3% across a sample of villages that had received electricity at schools in Nepal, an Asian country.
Figure 2: Electricity access and adult literacy rate in Africa by region
Furthermore, energy is critical to achieving universal access to clean water, sanitation and hygiene (WASH). Clean water is important for drinking, cooking, washing, and other WASH-related purposes and its primary sources in Africa include surface water, collected rainwater, and groundwater. Groundwater specifically represents roughly 15% of Africa’s water sources, and an estimated 75% of the population relies on it as the major source of drinking water. However, its extraction, treatment, and distribution to end-users highly depend on sufficient energy access. Only 60% of the available water in Sub-Saharan Africa is safe for drinking, leaving roughly 411 million people in the region without access to clean water. This shortage of clean water due to insufficient access to energy contributes to the 3rd leading cause of death in Africa – diarrhoea. Additionally, it disproportionately affects women and girls, especially in rural areas, as they are traditionally responsible for domestic chores including the provision of water for the household. Limited access to clean water exposes them to abuse and attacks in the process of hauling water from streams, rivers and other unsafe sources, in addition to WASH-related infectious diseases which affect their ability to study, work and live in dignity. Women are forced to spend around 60% of each day collecting water, which translates to approximately 200 million collective work hours and a decrease in the amount of time available for education. Also, due to natural biological differences, limited access to clean water and other WASH facilities in schools exacerbates gender inequality in education as girls typically drop out before or after reaching puberty.
Energy access has multifaceted impacts. Beyond its ability to catalyze business operations and economic growth, it is critical to achieving multiple sustainable development goals including eradication of poverty, access to education and the universal access to clean water, sanitation and hygiene in Africa by 2030(SDG 1,2,4,6,8,9). This makes it pertinent to prioritize the improvement of the current state of energy access in many African countries through policy and regulatory reforms, public-private partnerships, grid infrastructure upgrades and most importantly investment in renewable energy as exemplified by Morocco and Egypt in North Africa.
About the Author(s)
Olayide Oyeleke is an associate at The AR Initiative
