Africa Rising: Meeting The Growing Electricity Needs of A Continent

Electricity generation in sub-Saharan Africa is for the most part acutely unreliable. Despite being endowed with fossil and renewable energy resources vast enough to cover all of its energy needs, the rate of electrification is lower than in any other region in the world.

Having visited a few countries in eastern and southern Africa myself, I’ve become somewhat accustomed to the periodic power blackouts that are a commonplace feature across many cities and towns, as well as in rural areas. Once there, you quickly realize that electricity has the potential to change lives and substantially improve the standard of living for many.

According to the Global Tracking Framework Report published in May, approximately 550 million people are without access to electricity on the continent.  Nigeria (82.4 m), Ethiopia (63.9m), the Democratic Republic of Congo (55.9m), Tanzania (38.2m), and Kenya (31.2m) are amongst the highest. In terms of industry, power outages can hit everyone hard. When the electric grid goes down, local businesses that can afford it are forced to use costly back-up generators. Those that can’t just go without. Regular blackouts also signal a strong warning sign to foreign investors looking to put millions into local industrial projects, which inevitably threaten the creation of new jobs.

The International Energy Agency (IEA) estimates it will cost $300 billion to provide universal electricity access across Africa by 2030. Last month, while on a three-nation tour around the continent, President Obama announced the ‘Power Africa’ initiative, committing the U.S. to spending $7 billion USD to enhance the electricity supply in Africa. With the initial set of six partner countries, Power Africa plans to add more than 10,000 MW of electricity generation capacity on the continent; increasing electricity access to at least 20 million new households and commercial entities.

Some commentators have argued that Power Africa is really a drop in the ocean for what’s needed.

Regardless, any improvement to the status quo should be welcomed.

Inadequate levels of electricity generation across Africa is threatening to put a keg in the wheel of the continent’s positive economic growth of recent years. The Regional Economic Outlook: Sub-Saharan Africa report, published in May by the International Monetary Fund (IMF), forecasted a moderate, broad-based acceleration in growth of around 5.4% in 2013 and 5.7% in 2014. In order to sustain such growth and even accelerate it, investment and development in the power and energy sector needs to become a national priority in every country in the region; not least in the most industrialized, South Africa.

However, those watching the power market in Africa should be aware of the stream of new projects engaging international investors and companies every day across the continent. Just yesterday it was reported that the China International Water and Electric Corporation was awarded a contract from the Ugandan government to build a new dam and power plant on the Nile. On Tuesday it was reported that the Rwandan government had signed a $23 USD million solar energy deal with Dutch company GigaWatt Global.

To read more about the current investor projects in the pipeline, as well the actual state of electricity generation, and President Obama’s ‘Power Africa’ initiative, read our latest in-depth article: “Powering a Continent: The Multi-Billion Dollar Scramble for Africa” from our popular DataWatch e-magazine.