Publication - Off-Grid Energy and Economic Prosperity Evidence on the Relationship Between Off-grid Electricity Access and Local Economic Well-being in Sub-Saharan Africa
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Title
Off-Grid Energy and Economic Prosperity Evidence on the Relationship Between Off-grid Electricity Access and Local Economic Well-being in Sub-Saharan Africa
Publisher
UCL, Bboxx
Author
Akaraseth Puranasamriddhi and Dr Priti Parikh
Published in
September 2021
Abstract
Under the 2030 Agenda for Sustainable Development, the United Nations (UN) established Sustainable Development Goal (SDG) 7 in 2015 to ‘ensure access to affordable, reliable, sustainable and modern energy for all by 2030’ [1]. However, despite significant efforts before the coronavirus (COVID-19) pandemic, 789 million people still live without access to electricity, nearly 70% of which is concentrated in sub-Saharan Africa (SSA). Compared to other regions in the world, SSA exhibits the lowest electrification rate at 47% [2] and the degree of urban rural electrification inequality is also greater in SSA than anywhere else [3]. The COVID-19 pandemic has further challenged the resilience of the economies in SSA and is threatened to reverse the recent progress towards the UN’s 2030 Agenda. The regional growth contracted by -1.9% in 2020, triggering its first recession in 25 years, and per capita output is not expected to return to 2019 levels until after 2022 [4]. Moreover, cumulative output losses from the pandemic are estimated approximately 12% of GDP over 2020-21. It was also estimated that the catastrophic effects caused by the pandemic may have pushed an additional 26.2 million to 40 million people into extreme poverty in SSA by the end of 2020 [5]. As governments and international organisations plan the COVID-19 recovery, they must look at effective interventions that have the largest impact on the resilience and prosperity of the poorest and most vulnerable communities. Off-grid electrification plays a vital role in extending electricity access to rural communities and improving economic resilience. It can reach end-users in remote locations by using local renewable energy resources while providing cost-effective electrification options [6], [7]. More importantly, it can improve living standards and community services including education and healthcare services [8]. In terms of local economic growth, off-grid energy provides numerous benefits including better household and business financial capacity (i.e. increase income and reduce expenditure) and improvement in employment and business efficiency. For instance, access to off-grid electricity has enabled 36% of rural consumers in Kenya, Mozambique, Rwanda, Tanzania and Uganda to increase their monthly income by 35 USD a month, more than half of the average monthly GDP per capita [9]. The purpose of this discussion paper is to therefore synthesise the existing evidence in academic and grey literature on links between off-grid (e.g. pico-photovoltaic (Under 10Wp lighting systems), solar home systems (SHS) and mini-grids) energy access and economic prosperity at household and community level in SSA in light of COVID-19.
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