Efficient Appliances are a Powerful Tool for Creating Jobs and Growing Economies

Marina Baur: Globally, there are 666 million people who aren’t connected to the electric grid. More than a billion others are dealing with frequent power outages because their grids are unreliable. A lot of the people in both groups live in sub-Saharan Africa. Can you give us a sense of how the lack of reliable electricity shapes their lived reality?

Emmanuel Aziebor: Well, if you look at the data around electricity access in sub-Saharan Africa, some countries have much better statistics than others. In countries like Ghana and Kenya, over 70% of the population has electricity. But the reality is, if you go to any of these countries, there are still people with no access to even basic electricity. And by that, I mean they’re in darkness for much of the time; their only form of lighting is something like candles and kerosene lanterns. If they’re lucky, maybe they have a solar lamp.

Many of these communities are only about a kilometer away from the nearest grid. This happens mostly as a result of what we can think of as geographical difficulties: Maybe the community is on an island, or maybe the location is very sparsely populated—most of the time, the government only electrifies communities that have at least a few hundred people. This can become a self-fulfilling prophecy, since people leave those areas for the cities in order to get electricity and job opportunities.

So that’s one side of the energy access issue in Africa: Some people just don’t have electricity. Another side is that some people who are connected to the power grid can’t always rely on it when they need it. In countries like Nigeria, Ghana, Kenya, you still have a lot of blackouts. These happen in part because the utilities are in so much debt, which affects how efficiently they can operate.

These blackouts don’t only affect people in their personal lives; they also affect businesses. We see this at CLASP. Our team in Nairobi works from home several days a week, but sometimes they have to come to the office anyway because of blackouts where they live. The office is the only place they’re sure they can get the electricity they need to be productive, because the generator in our building is always going to run.

People in all kinds of businesses are affected by electricity problems. Think about agriculture. Even though we have a lot of freshwater resources in Africa, it’s often hard for farmers to irrigate their crops because you need pumps to move that water and many farmers don’t have electricity to power those pumps. And if farmers can’t irrigate their crops, the crops don’t grow as well as they should, which keeps farmers’ incomes low and raises local food prices, which, in turn, impacts food security.

It’s also important to understand that people use energy to indirectly support their incomes. A long time ago, my father retired from the force and moved from the city to the village. That meant carrying all his appliances and everything to the village, where there was no electricity. So he bought a car battery to run this black-and-white TV. My mom started a bakery, and in the evening, people would come there to sit around and watch TV, and then they would buy bread and pastries as well. So that TV set indirectly contributed to my mom’s income. Without it, she would’ve earned less.

Baur: Thanks for that. CLASP believes that a significant percentage of the money devoted to building energy systems needs to be invested in appliances. That’s not a very intuitive idea; why do you think that’s important?

Aziebor: Well, electricity is like water flowing in a river. There are electrons all over the place, but they must be captured into usable form, and what makes that possible is appliances.

Let’s look at this issue from the macro level. Utilities set up generation plants and transmission systems to transfer those electrons to a point of distribution: a pole that is metered, with a wire that goes into a home. Currently, in the energy sector, we measure these poles and say things like, “We have connected 10,000 households to electricity.” But having that connection in your home doesn’t mean you can actually use those electrons. That can only happen through a device that draws that power and turns it into the services you need. That device could be a light bulb or a TV; it could be a fan or an air conditioner.

So the actual benefit of electricity only happens when people have appliances. And that’s actually true for the utility as well. If nobody uses the electrons they generate and transmit, utilities do not make profit. A lot of utilities in Africa are in debt, partly because people aren’t using the electricity that essentially just stops at the metering point.

This is what CLASP focuses on, and it has implications at every level of society. At the individual or household level, appliances can improve quality of life, reduce sicknesses, and improve incomes. For example, in very hot places like West Africa, it’s hard to sleep without an air conditioner or fan, and if you can’t sleep well, your quality of life and productivity suffer.

At the institutional level, if you, say, provide high-quality appliances in health clinics and hospitals, enabling things like reliable refrigeration of vaccines, the provision of healthcare improves. It also becomes more cost-effective because you’re not wasting valuable resources that you then have to buy more of.

And at the small business level, businesses that have appliances will be able to earn more profit. This is very important for economies in sub-Saharan Africa, since small and medium companies make up 95% of registered businesses in the region. Today, many of these businesses are struggling, for a wide variety of reasons. Having better access to devices that turn energy into the services they need could really be a game-changer.

So when you talk about community resilience, appliances play a major role. They help people access better information, higher incomes, and less sickness. Appliances are how we turn energy into opportunities, into comfort, into quality of life.

This is a very important topic in Africa. But for a very long time, it hasn’t really been explained—even to government decisionmakers—from a strategic position.

Baur: What could African governments do to help more people access appliances? What types of interventions should they be thinking about when they decide where to spend money or what solutions to drive forward?

Aziebor: If you speak to African policymakers, the main things they’re concerned about are job creation and economic development. So that’s what we focus on.

Seventy percent of the population in sub-Saharan Africa is under 30, and many of these young people can’t find jobs. If they cannot get opportunities in-country, they move out, and then we see all this risk on the Mediterranean. So how can we encourage African governments to look at appliance access as a solution to that problem?

Basically, we say that one way to resolve issues around youth unemployment and economic development is to utilize the abundance of energy that is available. A lot of countries have installed grid capacity that is not being utilized. Well, what if we used that capacity to support rural enterprises? About 60% of the labor force in sub-Saharan Africa works in agriculture. So there are major opportunities there, and we already have a good idea of where interventions would do the most good. Most countries are mapped out into places where there is agricultural productivity, places where you can have agricultural processing. So we could say, “Okay, we know this area is good for rice production. Let’s get some irrigation systems into that area to produce more rice and get the youth involved in this business.” Then, we could encourage rice processing, which adds value—we can provide rice mills to help people get into that business. And then those workers would earn money that can be invested back into their businesses. So with appliances, governments can use energy to catalyze rural economic development.

Another thing governments can do is introduce regulations to make appliances run more efficiently and eventually lead to lower consumption of energy. This may seem like a contradiction: If utilities need people to use more energy in order to be profitable, why would governments want appliances to use less energy? Well, the issue in Africa is that inefficient appliances have been dumped here for a long time. They overconsume energy, which creates an inflated need for grid capacity. And then governments build generation capacity to meet these inflated projections, which creates a huge delta in capital investment relative to the actual need. As a result, they’re spending money on power grids that could’ve been invested elsewhere, like schools or hospitals or job creation. Making matters even worse, these big generation capacities put the utilities in even greater debt because there aren’t enough appliances to use them all.

So our hypothesis here is that if we introduce efficiency regulations into the appliance sector, it allows the government and utilities to right-size the grid and right-size their capital spending.

Baur: Can you give examples of where this kind of approach has been tried and found successful?

Aziebor: Well, if you look at appliance dumping, African leaders have been at the forefront of a lot of these initiatives. For a long time, companies have sent products they can no longer sell in other parts of the world to the continent. This was happening with fluorescent lighting, which is extremely toxic, and African policymakers pushed back, which was instrumental in getting global agreement to phase out the production of fluorescent bulbs.

I haven’t seen a large-scale program for other appliances, but I will mention a related example. Some time ago, the national government in Ghana came up with a way to transition all urban communities from charcoal to LPG (liquefied petroleum gas) as a cooking fuel, because we have abundant natural gas resources and the use of charcoal was causing deforestation in rural communities. So what did they do? They basically set up a government-owned LPG cylinder manufacturing company. They said, “Everybody, you’re going to get a subsidized cylinder and your first LPG fill-up is going to be free.” They also used a portion of taxes from petrol sales to fund the LPG program. All that helped people get used to cooking with LPG, since cooking is so cultural.

This program has been running for more than more than 20 years. Now, if you go to urban homes in Ghana, every one has a gas cylinder that they are using.

So this is one clear example where at the national level, the government drove adoption. And we see successful examples all the time with other kinds of infrastructure. The government provides the funding to build the airport and we all pay for flights to keep it operating. The government builds the road and we all pay a toll to use it. So these things can be translated into conversations about appliances—how public capital could be used at scale to address a particular solution.

But one problem we have in the appliance sector in Africa is that there are too many Mickey Mouse pilot projects. The problem has always been around scaling.

That means the government needs to be involved. For a very long time, we’ve had the impression that the private sector and nonprofits are the most important partners in the appliance sector. The idea was that nonprofits bring the money to derisk the private sector. But we must flip this equation. To reach the scale we need, we need to bring government to the table very early on.

The government is a fulcrum around which we all must build. The nonprofit brings philanthropic capital, the private sector brings commercial capital, and governments bring public capital to scale. But if we are not looking at scale with that equation in mind, it becomes difficult. We must be intentional. We know solar water pumps work; we know green milling can become a conduit for local economic development. So how can we get governments to scale these solutions, creating national programs where they invest public money into resolving both job creation and access-related issues? That is where I think the conversation should be.