Impact of energy reforms on the poor in Southern Africa

Most poor households in sub-Saharan Africa cannot afford an electricity connection and even if they get a connection they can only afford to use electricity predominantly for lighting, television and radio. They cannot afford to use it for their most energy-intensive use: cooking. Some countries in Southern Africa have approved policies to assist the poor to get access to electricity. South Africa, Botswana and Malawi have successfully implemented energy reforms and strategies aimed at this, though with different approaches in the three countries. South Africa has a strong economic base and the capacity to provide efficient energy services and highly subsidised electricity access. Botswana’s rural electrification programme is based on cost recovery for the utility: as a result of extending the loan period for the connection fee and adapting the monthly repayment amount to the ability of poor households to pay, electricity connections increased significantly. In Malawi a fixed-rate tariff and a limited-current supply was introduced. The repayment for the ready board was amortised over five years and added to the fixed monthly payment, the amount being adjusted to the ability of the households to pay. In Access II populations were divided into poor and non-poor. These broad categories limited a more differentiated analysis of the impact of power sector reform. In countries which have a high proportion of poor people – in some cases up to 80% of the population – we need to divide them into groups of very poor and not so poor. In this study the poor are ranked by income, and the division into different income groups permitted a more differentiated analysis than just looking at ‘poor’ and ‘non-poor’. The very poor who need further support can be targeted for further assistance. The analysis of the South African data also revealed that the higher urban income groups among the poor can afford to use electricity for most of their energy requirements and need no additional policy support. The analysis also showed how the poor change their energy portfolios as their income improves. The persistent use of fuelwood for cooking among all income groups of poor rural households has remained a matter of concern, particularly as the burning of fuelwood leads to indoor air pollution and affects the health of women and children. The sustainability of fuelwood supplies are also not guaranteed as population increases and fuelwood becomes more commercialised putting pressure on rural areas supplying cities. Even after electrification, households continue to use fuelwood for cooking. The income-differentiated analysis shows that as incomes rise, fewer households use fuelwood and substitute it by kerosene, electricity and gas