Africa’s energy landscape is changing, but not in a uniform direction. New discoveries of oil and gas are accompanying the expansion of renewable energy generation. What does the continent’s energy transition hold for jobs and sustainable development, asks Moustapha Kamal Gueye.
Because of its vulnerability to climate change, Africa as a whole is facing the double challenge of tackling climate change and coping with its consequences on production, growth, and employment in all economic sectors. While adaptation efforts are already, and will continue to be needed, preventing the worst possible impacts of climate change from materialising is also critical. Otherwise, the achievement of the 2030 Agenda for Sustainable Development may be compromised. Indeed, over the past decade, climate change and extreme weather events have caused unprecedented damage in African countries, ruining infrastructure, threatening economic activity, and destroying jobs. The most visible manifestations are the droughts in southern Africa, floods in West Africa, and desertification of entire areas in the Maghreb region.
To be sure, African countries focus most of their attention on adaptation to climate change. At the same time, however, an increasing number of governments across Africa consider a sustainable energy transition as a central aspect of their climate strategies. In this regard, several questions remain to be answered. How to achieve a sustainable energy transition that delivers inclusive growth and jobs? How to reduce the gap in skills in order to unleash the potential for vibrant enterprises and green jobs? And finally, how to develop public policy frameworks that are conducive to a just transition for workers, enterprises, and communities? This article touches upon these issues.
Context and issues in Africa’s energy transition
Compared to the majority of fossil fuel-dependent industrial countries, the energy transition in Africa presents a distinct feature. With the exception of a few countries such as South Africa, most African countries are not in a situation of pressure where they need to phase out of coal to meet their energy needs through alternative energy sources. Africa’s energy transition rather faces two important challenges: modernisation and expansion.
Modernisation is about exploiting the continent’s vast endowment of renewable energy resources, including biomass, wind, solar, and hydro-power potential. It also implies moving away from the use of inefficient and hazardous forms of energy by over 700 million people and towards the deployment of modern fuels and sources of energy for cooking, heating, and lighting. In the fossil fuel sector (especially oil and gas), both resource and labour productivity need to be improved. Expansion is about bringing to scale adapted technologies to meet the energy needs of a growing population of 1.2 billion people, of which only 30 percent have access to reliable electricity.
Globally, we are witnessing a shift in the energy landscape, away from fossil fuels and towards less-polluting sources of energy. In Africa, however, a closer look reveals a different picture. On the one hand, there is an expansion in energy generation from renewables. For example, the recently launched Taiba Ndiaye Wind Project in Senegal will generate 158-megawatt of additional capacity. In Ghana, the planned Nzema Solar Power Station will be the largest installation of its kind in Africa, and it is expected to increase Ghana’s electricity generating capacity by 6 percent and allow nearly 100,000 homes to benefit from clean energy. Morocco, a pioneer in this area, seeks to deploy about 1.5 gigawatts of solar and wind capacity across the country to meet its goal of increasing the share of renewables in its energy mix to 42 percent by 2020. In April 2018, South Africa signed contracts with 27 independent renewable energy power producers, worth US$4.6 billion, to produce 2,300 megawatts of electricity over the next five years.
One the other hand, since 2004, there has been a wave of oil and gas discoveries in countries such as Chad, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Mali, Mauritania, Mozambique, Sao Tome Principe, Senegal, Sierra Leone, Tanzania, Togo, and Uganda. According to the Africa Energy Outlook 2014, 30 percent of global oil and gas discoveries made between 2010 and 2014 have been in sub-Saharan Africa. A number of countries that were previously net energy importers will become energy exporters in the next five years due to increasing oil exports. And based on certain estimates, sub-Sahara Africa is expected to outpace Russia as a global gas supplier by 2040.
Therefore, while the African energy landscape is changing, it is not in a single direction. The energy transition is complex and has important ramifications for the structure of economies and future development prospects. Climate change is an essential aspect to it, but so are many other key aspects of the sustainable development goals, such as reducing the health impact on women and children of the use of inefficient cooking fuels; powering productive industries in rural areas and modernising agriculture; and the overall improvement of living conditions.
What are prospects for new job creation?
Studies by the International Labour Office and other institutions have pointed to four types of possible impacts of climate change and greening policies on labour markets. Firstly, the expansion of greener products, services, and infrastructure will translate into higher labour demand across many sectors of the economy, thereby leading to the creation of new jobs. Examples include jobs in renewable energy, energy efficiency, manufacturing, transportation, and building and construction. In addition to direct jobs, indirect employment is created along the supply chains, including in the building of necessary infrastructure. And as new income is generated and spent across the economy, further employment is created.
Secondly, some of the existing jobs will be substituted as a result of transformations in the economy from less to more efficient, from high-carbon to low-carbon, and from more to less polluting technologies, processes, and products. Examples include the shift from the manufacturing of internal combustion engines to the production electric vehicles, as well as the energy transition itself, as clean energy replaces fossil fuels.
Thirdly, certain jobs may be eliminated, either phased out completely or massively reduced in numbers, without direct replacement. This may happen where polluting and energy- and materials-intensive economic activities are reduced or phased out entirely, such as in the closing of inefficient coal mines.
Finally, many, and perhaps most, existing jobs (such as plumbers, electricians, metal workers, and construction workers) will simply be transformed and redefined as day-to-day workplace practices, skill sets, work methods, and job profiles are greened. For instance, plumbers and electricians can be reoriented to carry out similar work with solar water heating or solar photovoltaic systems.
On the energy transition more specifically, two common questions are whether clean energies generate more employment than fossil fuels, and whether this applies in the context of Africa. Several studies indicate that renewable energy technologies create more jobs than fossil fuel technologies. One study concludes that per dollar of expenditure, spending on renewable energy can produce nearly 70 percent more jobs than spending on fossil fuels. The International Renewable Energy Agency (IRENA) estimated that the renewable energy sector employed nearly 10 million people worldwide in 2016, with 62,000 jobs in Africa. Nearly half of these jobs are in South Africa and a quarter in North Africa.
In relation to the notion of modernisation mentioned above, replacing the millions of kerosene lamps, candles, and flashlights used in many African countries with modern solar lighting can provide a cheaper alternative and stimulate green jobs. A study found that replacing these lighting systems with modern solar lighting technologies for people living outside the grid could create 500,000 new jobs related to lighting in countries of the ECOWAS region.
Bridging skills and capacity gaps to reap the employment dividend
More than 10 million young African men and women are expected to enter the labour market each year over the coming years. Most analysts tend to agree that the traditional public sector will not be able to absorb this new work force. Entrepreneurship and self-employment are indispensable to create quality jobs in large numbers, and the energy transition can play a central role in this regard. For that to happen, skills development and upgrading, entrepreneurship promotion, and enabling policy and governance frameworks are required.
A global review of skills for green jobs including four countries in Africa (Egypt, Mali, South Africa, and Uganda) revealed the existence of a gap between the goals and targets set in environmental policies and the human resources available for their implementation. The same applies in the energy sector. Some skills gaps already exist for technical and engineering positions and could grow as the renewable energy sector continues to expand. Skills gaps could lead to project delays or even cancellations, cost overruns, and faulty installations. Efforts are needed in education and training systems to develop renewable energy curricula, integrate modules into vocational training courses, support apprenticeships, and establish common quality standards. Nonetheless, there are promising experiences. For example, Cape Verde launched a Renewable Energy and Industrial Maintenance Center (Cermi), whose main activity is the training of professionals in the areas of design, assembly, and maintenance of photovoltaic installations.
Various intervention models and programs to promote job creation in clean energies have shown a clear advantage of combining technical and vocational training with entrepreneurship training. Particularly for African countries, entrepreneurship and self-employment are becoming priorities in youth employment strategies and policies. In view of Africa’s specific business environment, micro-enterprises have an important role here. In general, micro-enterprises are defined as businesses with up to 10 employees, small businesses as those with 10 to 100 employees, and medium-sized enterprises as those with 100 to 250 employees. In Africa, the majority of job creation is coming from the smallest businesses (less than 19 employees). In the East Asia and Pacific region, job growth is mostly concentrated in enterprises with 20–99 employees, while in Latin America and Eastern Europe/Central Asia, more than 40 percent of job creation is by businesses with more than 100 employees.
Typically, young entrepreneurs in the energy space face challenges related to access to finance, lack of technical knowledge, and lack of experience in business management. It should also be noted that because of the prevalence of unemployment and underemployment, there are some entrepreneurs by vocation, but also a large number of entrepreneurs by necessity. As a result, in the absence of strategies and tools to support entrepreneurship, a large proportion of young entrepreneurs remain in the informal economy.
Nevertheless, many young African women and men see the potential associated with the development of micro and small enterprises in the renewable energy sector. Remarkable initiatives are underway throughout Africa, with dynamic companies such as M-Kopa Solar, which operates in East Africa in the distribution and installation of solar kits. Many such small and micro enterprises active in the distribution of energy systems, maintenance and operation, and sometimes in assembly would benefit from policies to support their integration in value chains and the development of local supply chains. Government policies favouring local content and after-sales services can be helpful. Through the use of such policies, for example, the Tunisia Solar Plan enabled the development of joint ventures and local manufacturing of solar water heaters.
Africa’s energy transition is well underway, structured by national and regional contexts and priorities, as well as global policy frameworks and commitments that countries have made. Critical to its success is the fine combination of new fossil fuel discoveries and the expansion of renewables across the continent. A critical dimension of the energy transition for Africa also has to do with cost of technologies. As Collier and Venables have put it, Africa cannot afford cost-increasing mitigation: any measures that it takes to green its energy usage must also be cost-reducing.
Although most studies indicate net job gains in the energy transition, in Africa as in other parts of the world, issues of temporal and geographical disconnect exist. These refer to the fact that new jobs are not necessarily created in the same locations and regions, and at the same pace as other jobs may be displaced or eliminated in the energy transition.
The notion of a just transition for all implies that policies are in place to manage social and employment impacts carefully, in order to avoid social and economic disruptions. The fear of job losses can act as a powerful social and political force to maintain the status quo and slow progress. Effective social dialogue, planning for a just transition, and social protection policies are all elements of a just transition framework that can help African countries manage their energy transition well.
The views and opinions in this article are those of the author and do not represent views or opinions of the International Labour Office.
Moustapha Kamal Gueye, Coordinator, Green Jobs Programme, International Labour Office.
The article is reposted from the International Center for Trade and Sustainable Development.