Kenya: Proposed Bill Threatens To Erode Gains in Clean Cooking Sector

  • Kenya’s Finance Bill 2020 proposes an introduction to VAT on items previously exempted under concessions accorded by the Cabinet Secretary.  
  • Particularly, the Bill introduces a VAT of 14% to clean cooking and solar products.
  • The move could see Kenyan households dig deeper into their pockets to pay for clean cooking solutions like Liquid Petroleum Gas (LPG) and improved cookstoves.

The clean cooking sector in Kenya has enjoyed fiscal incentives which have enabled millions of citizens to access clean cooking technologies and fuels. The introduction of VAT at the rate of 14% in proposed Finance Bill threatens to erode numerous gains that have been made toward the achievement of universal energy access by 2022 and Sustainable Development Goal (SDG) 7 which aims at ensuring access to affordable, reliable, sustainable and modern energy for all.

A study carried out in 2019 by CCAK (Clean Cooking Association of Kenya), showed that 58% of households still use the open fire method of cooking, 70% of households use biomass (firewood and charcoal) for cooking; while 19% of households use LPG. LPG adoption was at 3% a decade ago, zero-rating has made it more affordable to consumers, with the adoption increasing to 28% in 2020.

The global statistics paint a grim picture – nearly three billion people today do not have access to modern cooking products and services, with 4 million people dying annually due to indoor pollution caused by dirty fuels. According to the World Bank, “Despite three decades of efforts, access to clean cooking fuel and technologies has continued to be an issue with severe health, gender, economic, environmental, and climate impacts.”

To shed light on the issue and to lobby Parliamentarians to reject the proposed amendment, the ACCESS East African node – Kenya Climate Change Working Group (KCCWG) – convened a webinar that brought together Kenyan stakeholders in the clean cooking sector. These included CSOs, representatives from the private sector, Kenya Ministry of Energy, and the wider public.

During the webinar, ACCESS Coordinator, Jacqueline Kimeu, explained that in Africa, Kenya was a front runner in terms of adoption of renewable energy compared to neighbours such as Tanzania and Uganda, and this was attributed to the current fiscal incentives.  She noted that introducing VAT would not only impact the adoption of clean cooking products but that of solar as well. “The overwhelming majority of off-grid consumers and households who access their energy needs through solar-powered energy solutions come from lower-income, rural communities where VAT exemption on the products has played a critical role in increasing affordability.”

The panelists underscored the implications that would arise out of this amendment including: loss of jobs, the introduction of low-priced counterfeit products from unscrupulous manufacturers, as well as eroding investor confidence in the sector. Not to mention the probability that more Kenyans will resort back to unclean fuels – approximately 70 per cent of households in Kenya still use a type of woodstove as either their primary or secondary fuel, with a greater prevalence of 92 per cent in rural areas.

Update: The Bill is currently being debated and Kenyans are waiting to see what decision the parliamentarians take. The proposed Bill is set to become law by July 1st 2020.

ACCESS is collaborating with Hivos on a project that brings together government and CSOs to share experiences and learnings on how the policy environment is contributing or hampering progress towards achieving Clean Cooking and DRE targets in East, West and South Africa.

To read more on the Ghana workshop, click here.

Championing for DRE & Clean Cooking in Ghana

Participants that attended the SDG 7 workshop in Ghana

Amanda Addo is a 54-year-old mother of four living in rural Ghana. To eke out a living she owns a small restaurant that sells indigenous Ghanaian delicacies to residents in her community. She is also one of the many caterers that the government of Ghana has contracted in the school feeding programme. The programme is an initiative by the Ghanaian government to meet the Millennium Development Goals (MDGs) on education, poverty alleviation and food security by offering food to children from poor households and ensuring that they attend school. Amanda’s restaurant feeds about 420 children per day.

One of the challenges that Amanda faces in the running of her small business is the cost of firewood. A month’s worth of firewood costs 36 USD – a punitive amount for any woman living in the rural area. This coupled with the adverse health effects that come with it. Amanda’s situation is not unique, exposure to smoke from polluting, open fires or inefficient fuels – the primary means of cooking for nearly three billion people in the developing world – causes nearly 4 million premature deaths.

ACCESS Coordination Group member, Ezekiel Chibeze, moderating one of the sessions

It is against this backdrop that ACCESS in collaboration with Hivos held a CSOs engagement workshop in Ghana. The workshop brought together government and CSOs to share experiences and learnings on how the policy environment is contributing or hampering progress towards achieving Clean Cooking and DRE targets in Ghana. The participants interrogated the successes and challenges and what opportunities were presented by the civic space to strengthen their advocacy efforts.

Ghana is one of the success stories in Africa in terms of electrification and clean cooking – 84% of the population enjoys access to electricity. In his opening remarks, Mr. Wisdom Togogbo, the Director of Renewable Energy at the Ministry of Energy & Petroleum affirmed Ghana’s commitment to double access to clean affordable energy by integrating renewable energy to reduce carbon emissions. He emphasized on the government’s plan to increase clean cooking through LPG penetration in the local districts by adopting the gas cylinder recirculation model. It is worth noting that West Africa is currently leading in terms of clean cooking due to the wide adoption of LPG in the region.

He stated that 9 out of the 20 programmes set in Ghana’s Nationally Determined Contributions (Gh-NDCs) as part of commitments towards the Paris Agreement is geared towards the energy sector. This includes adding 10% renewable energy into the country’s energy mix. As at 2015, Ghana produces 42.5 Megawatts of renewable energy and hopes to increase it to over a 1000 Megawatts by 2030 to reduce the country’s dependency on thermal energy as well as make DRE available to off-grid communities. About 220,000 jobs would be created along the value chain of the Renewable Energy Master Plan (REMP) implementation.

Some of the successes in DRE & Clean cooking identified by the participants included the draft national Clean Cooking Strategy that is currently under review, and the Energy Master Plan that presents an entry for CSOs to influence its implementation. This was as a result of advocacy undertaken by Ghanaian CSOs advocating for DRE & Clean Cooking. The participants also affirmed that a lot of trainings targeting women and youth on the benefits and productive uses of clean cooking had taken place. There was also political goodwill from the government with the second lady of Ghana, Samira Bawumia, serving as the ambassador for clean cooking and helping raise awareness on pertinent issues.

Participants during the breakout sessions

One of the biggest challenges identified was the lack of financing – both at the national and local level – to implement the infrastructure needed to support DRE and Clean cooking. At the community level, women like Amanda, have to dig deep into their pocket to invest in clean cookstoves. Thanks to her small business, she managed to save up and invest in six of these cookstoves. For many of her friends who do not have a source income, they have to make-do with firewood. With the new improved cookstoves, Amanda spends about USD 7 on fuel – a fifth of the cost of using firewood.  Amanda’s appeal to the government is to put in place subsidies or financing that allows women to pay for clean cookstoves through flexible payment plans.

On the upside, there are many local artisans producing improved cookstoves.  Participants, however, agreed that there needs to be government regulations on the standards of production and the final product. So what next? To entrench the gains made and address the challenges in DRE & clean cooking in Ghana, the CSOs agreed that :

  1. Building synergy with other platforms that share common goals such as the SDG 7 Ghana platform would strengthen advocacy efforts.
  2. The CSOs also committed to invest in capacity building in areas such as research, governance and advocacy.
  3. CSOs to work with other stakeholders in harmonizing data and also ensure the acquisition of technical skills for data analysis.
  4. CSOs need to understand the existing frameworks and policies as pertains DRE and clean cooking.
  5.  To ensure financial sustainability, CSOs were encouraged to venture into social enterprise business models.

As ACCESS heads to Zambia, some of these learnings will be shared with the CSOs to see how they integrate these learnings in their advocacy agenda, noting that the Southern Africa region is lagging behind in terms of progress to achieve DRE and clean cooking targets.

*The workshop was supported by one of our partners – Hivos. This was the first of a series of forums to be held in Zambia and Senegal.