How to Help Prevent a Back-Slide into Extreme Poverty in Africa
Interview with Energy 4 Impact
Welcome to this week’s edition of Powering Prosperity Weekly.
This weekly newsletter looks at issues relating to the Global Economic Transition that will play out over the coming 20-30 years (see my introductory article on LinkedIn for additional context).
This week Matt Lomas discusses with the NGO Energy 4 Impact how energy access is critical to helping people escape poverty. Matt is joined by Ben Good and Godfrey Sanga, CEO and Director—East Africa respectively of Energy 4 Impact.
Energy 4 Impact helps businesses and markets deliver access to energy in Africa, improving the quality of life for millions of people. It believes businesses can offer the best solutions to the lack of energy—one of the most pervasively debilitating aspects of poverty that holds back sub-Saharan Africa’s development. It provides energy sector participants with operational, financial and technical advice to accelerate the growth of their businesses that deliver energy access. It is currently overseeing the Powering Villages project which aims to bring energy solutions to 60,000 people in 20 of the poorest villages in Kenya and Tanzania. Ben and Godfrey bring to their mission decades of experience in the renewable energy and in particular off-grid energy sector in Africa and across the developing world.
Listen to the full conversation with Ben and Godfrey from Energy 4 Impact on Spotify here.
Before the pandemic, the world was making great strides in reducing extreme poverty—with those living on less than $1.90 a day falling from roughly 1.5 billion in 2000 to 650 million in 2018.
However, the pandemic is set to lead to an increase in extreme poverty for the first time in 20 years (see chart below for the different scenarios). According to the World Bank, 150 million people could be pushed into extreme poverty by 2021, with 50 million of those living in sub-Saharan Africa. That would mean that 42% of the population in sub-Saharan Africa will be living in extreme poverty by 2021, compared to an estimate of 37.8% prior to the pandemic.
Source: World Bank
Access to clean energy will be essential to ensuring we avoid this path because of its universal importance across all aspects of livelihoods and the economy. As the cost of solar photovoltaics (PV) has fallen by 82% in the last decade and mobile payment services like M-Pesa have proliferated, off-grid solar has become increasingly available in Africa and helped lift many out of poverty in the process. As I lay out in my book Powering Prosperity and Ben and Godrey cover in this discussion, access to such energy, as well as clean-cooking stoves, has many benefits for people living in poverty, including:
- Lowering energy costs for households and allowing them to save
- Enabling them to hold assets such as solar-powered appliances and develop a credit history as they pay for bills and eventually own the asset, which helps them to access micro loans often used to start new businesses
- Reducing the adverse health impacts of dirty cooking fuels such as firewood and charcoal
- Empowering women by, for example, freeing up time that used to be spent collecting firewood that they can now devote to more productive activities
And as Ben and Godfrey explain, access to the energy is also key in terms of the healthcare response to pandemic in Africa, such as in maintaining hygiene. Furthermore, as they show through numerous illuminating personal stories, small-scale interventions to improve energy access result in a significant multiplier effect far beyond the initial intervention—powering prosperity for the whole community.
To find out more about Energy 4 Impact, you can visit their website here, where you can also choose to donate to the Powering Villages project. You can also find Ben’s profile here and Godfrey’s here on LinkedIn.
Indranil Ghosh and Matt Lomas