This report examines a sub-set of energy subsidies in sub-Saharan Africa (SSA) related to the production and consumption of fossil fuels (oil, gas and coal), and outlines opportunities and processes to support their reform.
This analysis focuses on fossil fuel subsidies because their economic, social and environmental costs have recently received significant attention – including through high-level calls to reform and phase out subsidies to fossil fuels from organisations including the International Energy Agency (IEA), in agreements such as the Addis Ababa Action Agenda and the Sustainable Development Goals (SDGs), and from leading public figures such as Kofi Annan, the former UN Secretary-General. Far less attention, however, has been paid to providing guidance for those seeking to undertake energy subsidy reform more broadly, and fossil fuel subsidy reform more specifically.
In order to support governments and other stakeholders in SSA that are seeking to understand the potential for fossil fuel subsidy reform, or to avoid implementing these subsidies as part of wider energy sector development, this report outlines:
- The role of fossil fuels in SSA’s energy mix.
- The current scope and scale of fossil fuel subsidies in SSA.
- Evidence of the costs of fossil fuel subsidies.
- Potential barriers to subsidy reform.
- Drivers of and opportunities for reform.
- Key principles for reform at the national level.
- Opportunities for accelerating reform through international support.