Africa to emerge as one of the strongest areas of GDP growth
Updated: Apr 1, 2020
Africa’s exploding population, estimated to grow by an additional 800-million from 2010 to 2040, will double energy demand within the same time frame. The continent’s population will reach 1, 79-billion by 2040, second only to Asia Pacific’s 4, 59-billion. All these facts will make huge demands for energy resources.
Africa’s energy demand is set to more than double from 29-quadrillion British thermal units (Btu) in 2010, to include 61-quadrillion Btu by 2040. Oil and wood-based biomass will account for 60% of the energy source in the future. Natural gas and coal together will account for 36%. Interestingly, ExxonMobil expects Africa’s renewable energy sources to be negligible. Africa’s electricity demand is estimated to rise 335% over the next 30 years, as incomes rise and legions of Africans move into the middle-income bracket.
The World Bank estimates that up to 81% of Sub-Saharan African households rely on wood-based biomass for their cooking needs.
Rough estimates indicate that the charcoal industry in Sub-Saharan Africa was worth more than USD 8 billion in 2007, with more than seven million people dependent on the sector for their livelihoods. In line with consumption predictions of the IEA, the economic value of the charcoal industry in SSA may exceed USD 12 billion by 2030, employing almost 12 million people. The biomass industry is unlikely to fade away and, as the ExxonMobil forecast suggests, it will remain a source of revenues, jobs, and pollution in much of Africa.
In Kenya alone, the sector employs 700,000 people and generates USD 450 million each year, roughly equivalent to its high-profile tea industry. Modernizing the wood-based biomass energy sector has the potential of significantly increasing the revenue base of most SSA countries, unlocking resources urgently needed for investments in natural resources and other key areas for sustainable economic development and green growth.
Africa will lead emerging markets’ rise in population growth, economic expansion and greater use of energy resources.