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How clean energy delivers long term economic development, new jobs sustainably

Sustainable Energy for All has developed the Recover Better with Sustainable Energy Guide for African Countries to aid these countries as they develop post COVID-19 recovery plans and stimulus packages. The guide is part of a series that includes guides for countries in the Caribbean and Southeast Asia to be released soon.

Released on June 30, the Recover Better with Sustainable Energy Guide for African Countries says countries that commit to an ambitious recover better strategy today can deliver long term economic growth, new jobs, and sustainable energy for all in the long-term.

This is critical for Africa after COVID-19. The Recover Better guide has highlighted the deep regional divide in energy access progress. Africa is a region full of promise and a growing economic powerhouse, yet this progress will be stifled without access to sufficient, reliable and affordable energy.

In the Recover Better, SEforall recommends that governments profit from the COVID-19 crisis by adopting and ensuring a successful energy transition. To achieve this goal, African countries need to improve on the ease of doing business. This means that governments need to strive towards creating a supportive business environment that ensures fast investment inflows. This entails significantly reducing red tape, reducing the number of permits required and time it takes to get permits or waivers (if available) for renewable energy and clean cooking equipment and appliances.

African countries are strongly advised to set robust policies and empower national institutions to drive development. Governments need to work to establish or empower institutions such as regulators and rural electrification agencies to ensure the right frameworks are in place to successfully drive the development of renewables, increased electrification and access to clean cooking.

“COVID- 19 has changed the world as we knew it. As countries rebuild economies from the impact of the pandemic, they are faced with a unique, once-in-a-generation opportunity to ‘Recover Better’ with sustainable energy”, said Damilola Ogunbiyi, chief executive and special representative of the United Nations Secretary- General for Sustainable Energy for All and Co-chair of Un-energy.

“There has never been a better time to invest in clean, efficient renewable energy. Countries that recover better with sustainable energy will see the payoff in the form of resilient economies, new jobs, and faster energy development. By making this investment, African countries can develop a competitive advantage,” Ogunbiyi said.

Other recommendations in the Recover Better guide include the elimination of fossil fuel subsidies. With the price of oil at its lowest in 18 years; governments must take this opportunity to eliminate fossil fuel subsidies. When the price of fossil fuels rises again, governments should refrain from re-introducing the subsidy.

A movement towards cost reflective tariffs has also been recommended as an important factor to reap the fruits in the Recover Better guide. The natural tendency for countries could be to cut the cost of electricity, but this should be avoided. The reality is that electricity is largely consumed by wealthier households, industrial or commercial clients. Governments are then persuaded to allow cost-reflective tariffs that enhance utilities to perform better and increases investments in energy access and clean energy.

The Recover Better with Sustainable Energy Guide for African Countries makes a case for investment in robust data and recommends the declaration of a moratorium on new coal-fired power. Other forms of investments go to energy efficiency and in people so they can take advantage of new clean energy jobs.

The latest data on Sustainable Development Goal 7 ( SDG7) – access to affordable, reliable, sustainable and modern energy for all by 2030 – shows that progress in Africa is still off track to meet global targets. Over 565 million people still lack access to electricity, and a further 900 million lack clean cooking solutions. The pandemic risks setting progress even further behind.

By acting on the enabling measures put forward in The Recover Better with Sustainable Energy Guide, countries across Africa will benefit from increased gross domestic product, affordable energy provision, and improved agriculture, gender and health outcomes.

This re-set can also spark progress at the speed and scale needed to meet SDG7 and help put the global economy on a trajectory in line with the Paris Agreement and Sustainable Development Goals.

On the launch of the guide, Yemi Osinbajo, vice President of Nigeria said COVID-19 has presented a unique opportunity to accelerate the transition to that clean, affordable, reliable and renewable energy source offered by the sun.

“Nigeria is committed to the full utilisation of this abundant solar energy source. The Federal Government has already removed fossil fuel subsidies and included five million solar connections in our postCOVID-19 economic sustainability plan – first steps to new jobs and a cleaner, healthier environment. We commend Sustainable Energy for All for producing this practical ‘ Recover Better’ guide that will help African governments close the energy access gap and deliver economic growth for the benefit of our people.”

The global economy is increasingly being powered by clean and efficient sources of energy. According to some research outcomes, dollar for dollar investments in clean energy creates three times the number of jobs compared to fossil fuels. Every 1,000 customers connected to decentralised energy solutions – solar home systems or solar minigrids – supports approximately 25 jobs.

Amina J. Mohammed, Deputy Secretary- General, United Nations, said, “access to sustainable energy is pivotal to achieving the Sustainable Development Goals and the Paris Agreement. As we work to recover better from the impacts of COVID-19, African countries have the opportunity to drive faster progress on the energy transition with efficient, renewable energy that protects the most vulnerable, delivers sustainable growth and support climate action.”

Similarly, Riccardo Puliti, World Bank Global Director for Energy and Extractive Industries and Regional Director for Infrastructure in Africa said “access to energy is crucial for Africa to recover from the ongoing health, economic and social challenges caused by the pandemic. We welcome this new guide from Sustainable Energy for All that outlines ways in which African countries can seize this unique moment, and in return, unleash economic growth with clean, sustainable energy.”

No doubt, Covid-19 has dealt a deadly blow on the global hospitality industry with huge revenue and job loses. In your view, how much is the impact on the African and Nigerian hospitality industry?

The impact differs from country to country, but in general terms Africa and Nigeria have fared much worse than the USA, but about the same as Europe. STR released some statistics a few weeks ago that said that whilst in the USA 17 percent of hotels had closed, and the balance were achieving 37 percent room occupancy, in Africa 80 percent were closed and those still trading were achieving 14 percent occupancy – a huge difference. The reason the data paint such a different story is that in several African countries, including Nigeria, governments have ordered hotels to close, and the domestic and international flights have stopped operating (plus in Nigeria no inter-state road travel either). Hotels depend on travel, particularly air travel, for their customers. And whilst in the UK and other European countries government has provided financial support to companies who have furloughed staff, contributing a large part of the salaries of employees who cannot work, or are not needed, so that they are not sacked, there are no such palliatives available in Nigeria.

How will the losses impact business going forward?

It is going to be a long, slow recovery, it could take as much as 4 to 6 years (but in reality we don’t know, we’ve never been in this situation before) to get back to 2019 levels of business. There will be really tough times for the staff no longer required, and for their families.

What are the new trends or new normal to expect in the industry going forward?

I don’t see that, there will be much of a long-term impact on the way the hotel industry operates. In my opinion, social distancing will “fade away”, particularly when a vaccine or other “cure” is available for the COVID-19 virus (but note that it will be a long time before a vaccine can actually be delivered to everybody). There will be a

Greater awareness of cleanliness, that’s here to stay – but shame on those who weren’t clean already!

Do you see recovery for the continent and Nigeria soon?

We can recommence trading properly once the borders and skies are reopen. Whilst countries like South Africa and Kenya can look to the domestic market for demand, as they can drive to hotels, in Nigeria we rely on air travel for our domestic and international guests, so without flights, no guests. Then, there is the fact that for many cities in Africa the demand is almost entirely commercial and/or government, and unheard of reductions in GDP, and therefore corporate and state incomes, means there will be a reduction in demand from those sources. “Soon”? No, I don’t believe it will be soon, but then the resilience of Africa and the Africans is legendary, and a return to growth is not so far away.

What measures should the sector adopt to survive, especially now that government palliatives are not getting to them?

The same as every business, look inwards to how we operate, and whether we can reengineer the processes to cut costs, and look outwards to our customers, maintain contact, inform them about the steps being taken to ensure their safety when they return. When hotels do reopen it is going to be extremely competitive, and owners and managers are strongly advised not to seek to attract market share by abnormal discounting, as that is a lose-lose situation, and will result in more business failures than would otherwise have been the case.

Considering growth projections for the sector this year, how has the pandemic impacted it, and are pipeline projects still realisable this year?

All budgets, forecasts and projections made for 2020 are out of the window, and at present it is impossible to know what will be the situation, both in terms of supply (who will reopen, who will not) and demand (who will travel, what will consumer behaviour be like). As I said before, we’ve no experience of this “total reset”. As for the pipeline, many planned openings are going to be delayed to next year or beyond, for a variety of reasons: there’s no point opening into such a poor market (low demand); funding may not be available to complete the hotel; technicians and others cannot travel to commission plant and equipment; a reduction in capacity for cargo shipping (and airfreight) can delay materials and other needed items; and so on.

Are there brands that are holding on despite the impact of the pandemic and which brand is worst hit?

The pandemic shows no favouritism, so everyone is hit equally, whatever the brand, and those with no brand, all

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