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China-Africa Trade Information Service
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China-Africa Trade Information Service
Image from How We Made it in Africa
Transportation in sub-Saharan Africa is almost entirely fuel-based. This not only imposes a cost burden on local residents, but also imposes a heavy financial burden on countries. Residents in Nairobi use 14%-30% of their income for transportation. In order to protect consumers from the increasing fuel prices, African governments have heavily subsidized fuel, with an average cost of 1.4% of GDP.
However, these subsidies disproportionately benefit higher-income households. As cities expand, oil demand grows and the problems of fuel scarcity and cost loom larger. Pollution from fuel-based transport is also a major contributor to growing air quality concerns in African cities.
Secondly, demand for electricity in Africa is increasing rapidly. It is anticipated to quadruple by 2040. It is often overlooked that many African countries already rely on low-carbon technologies such as geothermal energy and hydropower. In 2017, 77% of Kenya’s energy demand was met through renewable energy. Many African countries are looking to low-cost renewables with abundant potential, such as solar and wind, to grow grid capacity.
This is where electric vehicles (EVs) come in. Sub-Saharan African countries urgently need a transport alternative to stave off the growing burden of fuel dependency and subsidies, as well as an electricity storage solution to leverage their abundant renewable energy resources. EVs, powered by electricity and running on battery storage, offer a potential solution to both these problems. Furthermore, as EVs produce no direct emissions through the exhaust pipe, they can improve the air quality of Africa's congested cities.
Internationally, the EV market is already growing at exponential rates, with more than three million vehicles sold globally. Every major automobile manufacturer now has hybrid and full plug-in EVs in commercial production. By 2040, 54% of new global car sales and 33% of the world’s car fleet will be electric, according to experts.
China and India - the world's largest and fifth-largest automobile markets, respectively - are great examples of what is possible in emerging markets with the right policy interventions. Both aim to switch to EVs to improve their energy security, reducing long-term dependency on imported oil (in 2016, this stood at around 66% of crude oil consumption in China and 80% in India).
This is the perfect time for African countries to explore the potential of EVs. Many sub-Saharan African countries will be making large investments in power capacity in the next decade. Vehicle ownership will rise dramatically over that period, given population growth, increased urbanisation and a rising middle class. Sub-Saharan African countries have the opportunity to pursue an energy-secure and lower-cost path, taking advantage of the strong global EV trend, before locking themselves into greater dependency on imported fuel and a carbon-intensive energy grid.
The unique challenges to viability in the sub-Saharan Africa region are exemplified by the recent debate around electrifying Kenya's new rail system. Firstly, a large EV fleet would require a reliable power supply and reasonably low electricity prices, both of which could be an issue in sub-Saharan African countries. Electricity blackouts occur on a daily basis in 30 out of the 48 countries, and electricity prices can be more than double those in the US and China.
There is also the environmental issue of battery manufacturing and disposal, which could be more challenging in sub-Saharan Africa due to often relatively informal waste management systems. Lastly, international examples demonstrate that rapid EV adoption requires strong enabling policies, including tax incentives and subsidies, which is tricky given many competing priorities for limited government funding in sub-Saharan Africa.
