Oil-rich African countries will have no excuse for their citizens’ energy poverty



International Energy Agency : Economist, engineer
A number of sub-Saharan African countries hold large oil and gas resources, which are expected to underpin strong growth in their production and exports in the coming two decades or so.
A number of sub-Saharan African countries hold large oil and gas resources, which are expected to underpin strong growth in their production and exports in the coming two decades or so. Conventional oil production in the ten largest hydrocarbon-producing countries in sub-Saharan Africa reached 5.6 mb/d in 2007, of which 5.1 mb/d was exported. In the Reference Scenario, output rises to 7.4 mb/d and oil exports to 6.4 mb/d in 2030. Gas production in these countries increases more than four-fold, from 36 billion cubic metres in 2006 to 163 bcm in 2030, with most of the increase going to export. These projections hinge on a reduction in gas flaring, adequate investment and avoiding disruptions to supplies through civil unrest. Cumulative government revenues from oil and gas output (from royalties and taxes) in these ten countries are projected, in aggregate, to total $4 trillion over 2007-2030. Nigeria and Angola remain the largest exporters, with combined cumulative government revenues of about $3.5 trillion. Taxes on oil and gas production account for more than 50% of total government revenues in most of the oil- and gas-rich sub-Saharan African countries. Despite the vast hydrocarbon wealth of these ten countries, most of their citizens remain poor. As a result, household use of modern energy services is very limited. Two- thirds of households do not have access to electricity and three-quarters do not have access to clean fuels for cooking, relying instead on fuelwood and charcoal. Unless there are major government initiatives to address this problem, the number of electricity- deprived people is projected to increase over the projection period, as the population grows. And more than half of the total population of these countries still relies on fuelwood and charcoal for cooking in 2030. Tackling energy poverty is well within these countries’ means, but major institutional reforms are needed. We estimate the capital cost of providing minimal energy services (electricity and liquefied petroleum gas stoves and cylinders) to these households over the Outlook period to be about $18 billion. This is equivalent to only 0.4% of cumulative government revenues from oil and gas. An improvement in the efficiency and transparency of revenue allocation and the accountability of governments in the use of public funds would improve the likelihood that oil and gas revenues are actually used to alleviate poverty generally and energy poverty specifically.


WEO 2008