Missing Links Between Electricity Access and Development Priorities in Africa

Sustainable development, in many ways, depends on access to electricity. Well-functioning healthcare facilities, refrigeration in agricultural supply chains, electronic teaching aids in classrooms, the production of goods and much more require reliable electricity. However, in sub-Saharan Africa where health, education and other poverty indicators continue to lag global progress, acute gaps in electricity access also persist.

Recent studies show that in some parts of sub-Saharan Africa, only 28% of health facilities have electricity connections; close to three-quarters of facilities with electricity connections grapple with unreliable supply. An assessment of electrification in primary and secondary schools in sub-Saharan Africa also found that four out of every five schools surveyed lack access to electricity.

On the other hand, viable electricity markets in the region require sustained demand from development activities like agriculture, healthcare and others to thrive. Even though this two-way street is widely acknowledged by experts, energy and development goals continue to be pursued in isolation. Why is this the case, and what can be done support this obvious but missing linkage?

New Opportunities to Connect Energy and Development

The disconnect between electricity access and other development priorities is usually attributed to poor communication or coordination between energy agencies and those responsible for delivering services in other sectors like health, agriculture, etc. This is true, but only a part of the story. Challenges with data, planning, policy, institutional arrangements, finance structures, capacity and governance, also play a role.

For instance, in many African countries, respective government ministries tend to draw on data specific to their sectors to inform their strategic plans, and hence miss signals and opportunities for coordinated action with other sectors. In addition, because governments allocate resources and incentives along ministerial lines and enforce political and administrative authority along those same lines, ministries sometimes view themselves as competitors rather than collaborators.

Capacity gaps, a poor understanding of the impacts of integrated efforts on indicators of development (such as poverty rates), and poor local governance structures further impede coordinated action.

The current structure of development finance also tends to inhibit integrated action across sectors.

A recent OECD report shows that even though official development finance from bilateral and multilateral donors increased by 35% between 2012 and 2016, the funds were largely allocated to specific sectors and projects. Private development finance, which doubled from $15 billion in 2012 to $33 billion in 2016, targeted sectors with high prospects for commercial returns such as energy, banking and business, industry and mining and construction. The social sectors like education and health attracted less private finance.

Clearly, a systemic effort is needed to better link energy and development efforts.

There is good news: with governments around the globe working to incorporate the Sustainable Development Goals (SDGs) into their national development plans, there is renewed interest in the nexus of energy and development in Africa. Domestic finance has been growing steadily in Africa, creating new opportunities for African governments to be more independent and to structure their internal budgets in ways that take the links between energy and development outcomes into account.

The ongoing data revolution is creating innovative opportunities to collect and analyze cross-sector data to support complex decisions at the intersection of energy and sectors like health and agriculture. Advances in impact evaluation techniques allow us to understand the impacts of these integrated efforts much better.

Likewise, growing acceptance of decentralized electricity technologies like mini grids and solar home systems (which deliver electricity services through local networks and markets) are creating new opportunities to link energy and development efforts locally.

4 Actions for a Linked Energy and Development Agenda

How can African governments, bilateral and multilateral donors, the private sector and civil society take advantage of these emerging opportunities to better link electricity access efforts with priorities in health, education, agriculture and other sectors?

A new WRI working paper, Linking Electricity Access and Development Outcomes in Africa: A Framework for Action, proposes a way forward. This framework identifies four important areas that we need to focus on to build an enabling ecosystem for a linked energy and development agenda.

1. Global Ambition and Engagement

The novel coronavirus (COVID-19) pandemic has revealed how interconnected our world is. Even though issues like a lack of electricity access and fragile healthcare systems are expressed locally, they can make us more vulnerable to global crises when these occur.

At the global level, we must invest in better coordination across energy and other development sectors by elevating the importance of electricity access to development priorities in global dialogues. We must create a platform for governments, the private sector and civil society to share best practices and identify new opportunities to support a linked agenda.

2. Local Evidence-building

As several African countries adopt decentralized governance models, subnational governments will increasingly deliver health, education, agriculture and other services. Electricity production and delivery is also becoming more local as we embrace decentralized electricity solutions.

The local level is therefore an important space for building data and documenting lessons about what we need to link electricity delivery with priorities in health, education, agriculture and other sectors more effectively, while tracking their impacts on critical development indicators like child and maternal health, nutrition and literacy.

Unfortunately, most local governments in Africa are financially under-resourced and constrained in technical capacity. In some cases, local governments may lack the technical expertise to support planning that takes both energy and other sectoral priorities into account. In such cases, strengthening local capacity by embedding the appropriate technical personnel (from national energy agencies, research institutes or elsewhere) in local government structures would be a step in the right direction.

Democratic processes and channels for influencing national policy with local evidence and experience must accompany strengthened local institutions. Otherwise, local knowledge stays local. National governments must also commit to improving the efficiency of local bureaucratic systems through adequate restructuring, empowerment and the right incentives.

3. National Policy and Institutional Alignment

We also need to align national policies and institutions to support a linked agenda.

African governments must take a second look at existing structures of political and administrative authority and by extension, funding and staffing decisions.

Current structures disproportionately reinforce barriers between different ministries rather than encourage collaboration. As governments integrate the SDGs into their national plans, ministries of finance must allocate budgets and incentives to support shared targets that require ministries of energy, health, agriculture and others to work together. Indicators of success reflecting these shared targets, and accountability for them, must be enforced along these same lines. This will encourage coordination rather than competition among government ministries.

Policymakers should draw on local data and evidence on integrated efforts, as well as global best practices. Innovative data tools such as Energy Access Explorer, which aggregates data on energy, health and other sectors in a single platform, are creating new opportunities for governments and other stakeholders to access and utilize cross-sectoral data and analysis to guide policy dialogues that take the interdependencies between energy and other sectors into account.

We must also ensure that the right experts are embedded in the respective ministries to translate this data into integrated plans. For instance, by embedding experts from lead energy agencies in other ministries like health, education and agriculture -and vice-versa-, the unique energy needs and priorities of different sectors will be captured in national energy plans and electrification strategies.

4. Restructuring Development Finance

Finally, we also need to restructure development finance to encourage integrated action across energy and other sectors. African governments must lead the way by developing national plans that urge development finance away from siloed investments that fail to account for the links between energy and other sectors.

Bilateral and multilateral donors, philanthropies and foundations can plug into these integrated plans. Development finance providers who are more comfortable with stand-alone projects in specific sectors because the impacts are easier to track and quantify, must be flexible and committed to rethinking what success means for them.

As private development finance grows, we must think creatively about how public and private investments can support a linked energy and development agenda. Over 80% of private finance deployed between 2012 and 2016 was in invested in four sectors; energy, banking and business, industry and mining and construction.

Even though the private sector may view energy sector investments as more commercially attractive compared to agriculture or health, sustained demand from other sectors is critical to the financial health of energy markets.

Stimulating this demand is crucial to the long-term viability of energy investments, just as affordable and reliable electricity allows these other sectors to thrive.

The public and private sectors must work closer to achieve these mutual benefits.

With less than a decade to achieve the SDGs, we must act quickly to fill in the missing links between electricity access and other development goals.

Source: wri.org