Cheap solar and wind prices can boost Africa’s GDP

The IMF is cutting their growth forecast for Africa and this will affect future GDP drastically. The challenges the continent faces of low commodity prices, poor and costly access to energy, weak investor confidence and rising food prices have put pressure on GPD growth. Access to cheaper and reliable energy, through solar and wind technologies, would be a catalyst to boost the continent’s GDP growth forecast in a sustainable way.

Renewable energy such as solar and wind is more practical, easier to deploy in remote locations and has less associated costs on the damage it inflicts on the environment. The high cost of building new grid infrastructure is also a hindrance to powering remote villages and areas in Africa. The existing infrastructure is sparse and most African utilities don’t have the financial standing to build and upgrade their grids. Large parts of Africa will remain without power for a long time if we must wait for the utilities to build transmissions lines and increase their energy supply. Solar and wind can be easily deployed in remote locations for rural electrification or off-grid applications, without the added burden of costly transmission lines and grid infrastructure.

Fossil fuel prices continue to rise for several reasons. Rising input costs and ageing infrastructure continue to plague the fossil fuel industry. Ancillary costs such as carbon tax, medical care, environmental rehabilitation and repair add further layers of expense to suppliers of fossil fuel energy.

There are numerous reports on the poor access to energy for large parts of the African population. This hinders economic development and will continue to exacerbate if not addressed. There are number of challenges and hurdles that renewable energy developers need to overcome. A lot of these challenges are specific to Africa. As African leaders learn more about the benefits of renewable solutions, more and more renewable projects will become easier to develop and reach financial close. All stakeholders should work together towards a practical and sustainable solutions. The use of solar and wind can make a notable impact on the economic landscape for many African countries. It will Improve their GDP growth and enhancing their populations lifestyle through access to power.