How energy can contribute towards poverty alleviation

WE LIVE in interesting times when so much is happening in terms of development. However, there are curious contradictions that undermine our journey to the Promised Land; development. The importance played by energy to our development process requires no explanation and energy consumption is widely accepted as a good indicator of economic development. In general, this means the higher the energy consumption, the higher the per capita income and, consequently, the lower the poverty index. There is a correlation between energy availability and poverty. Sustained economic development will be attained only when it is possible to offer decent living conditions to one-third of the world’s population with an estimated 1.6 billion people living in the developing countries with no access to any type of commercial energy. These people still depend on energy generated inefficiently by burning fuel wood, dung and plant wastes in devices using crude or primitive technologies. Energy obtained under such harrowing conditions is expensive and insufficient to meet even basic human needs for nutrition, heat and lighting, with little or nothing left for productive uses that would offer a way out, helping breach the seemingly never ending cycle of poverty. In rural areas, energy supplies are used mainly for cooking purposes, with only small portion allotted to food production, processing and conservation. Despite all the technological and administrative advances made so far, mankind or to be more gender sensitive, humankind, has proven unable to deal with this challenge. Besides China where significant progress has been achieved in as regards rural electrification, it is estimated that only one-third of the rural population of the developing countries has access to electricity, a figure that has remained unchanged for the past 25 years. According to Rwanda’s Energy, Water and Sanitation Authority, which was recently split, 85 per cent of the overall primary energy consumption in Rwanda is from biomass, 11 per cent from petroleum products and a meager 4 per cent from electricity. Rwanda’s per capita energy consumption is only 41KWH which demonstrates the county’s overdependence on wood-fuel. Rwanda energy demand is projected at 641MW by 2017 and during the same year, according to the national development blueprint, the second Economic Development and Poverty Eradication Strategy (EDPRS 2), during the same year, the plan is to have at least 70 per cent of households in Rwanda accessing electricity. As income is insufficient and unstable, urban poverty may well be even worse than its rural counterpart, reaching a level of real marginality. This is due to shortfalls in job generation in terms of both quality and quantity during the initial stages of the economic development process, to which the urbanisation process is closely linked, covering activities such as building infrastructure and homes, shopping centres and factories that demand large labour-forces and consequently attract waves of migrants to richer urban centres. However, the slowdown in this expansion generates a perverse effect on the urban communities involved. Rural workers migrating to the cities with their families – and more particularly their offspring who grew up within a context of expansion – are now faced with the specter of joblessness and inadequate wages, nudging them towards crime. Lacking specialised skills, younger generations for whom there are no job opportunities like those open to their parents are unwilling to return to the land, making them the main losers in this process. There are a few options for spurring the nation’s GDP growth and attracting the necessary investments in the energy area. While avoiding any return to inflation, GDP growth will depend on better job generation, capital inventory and rising productivity. As an example of job creation policy that would also help reduce poverty, efforts could be channeled to expanding access by the poorer communities to steady supplies of electricity at an acceptable quality and price. Over the past 10 years, there have been sweeping changes in the energy sectors of the developing countries. Among other factors; privatisation, restructured utilities, deregulation and environmental controls have reshaped their institutional frameworks. For Rwanda, it is recognised that the current inadequate and expensive energy supply constitutes a limiting factor to sustained socio-economic transformation of the country. It has been reported that more than 40MW is expected to be added to the national grid before the end of the year. The Rwanda Development Board is currently strategising to mobilise local and foreign private businesses to invest into the energy sector to supplement public investments in areas ranging from hydro power and methane gas to solar energy, just to mention a few. Africa is endowed with renewable energy prospects. However, a very small proportion of renewable energy sources for power generation are currently exploited. If we do not tackle the energy conundrum Africa will be struck in a profound poverty trap that will constitute the epicentre of the world’s development crisis. It is not too late to reverse this seemingly intractable situation if and when there is commitment of will and resources. The writer is a consultant and visiting lecturer at the Rwanda Defence Force Senior Command and Staff College, Nyakinama

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How energy can contribute towards poverty alleviation