The issue of energy independence in Africa is one being talked about all over the world, from rural farms and villages there to the halls of the US Capitol where the Electrify Africa Act is preparing to take center stage in foreign policy discussions. With all the outside press and attention that this is garnering for the people of Africa, it’s easy to forget that residents there have the most say in what will determine their energy future. Africans have already been making tremendous headway into obtaining energy, largely relying on the private sector. What’s perhaps most intriguing is not that Africans are able to become energy self-sufficient, but how they’re securing that future; the electric revolution is being subsidized and funded through installment plans.
African nations are already inundated with mobile phones; people largely communicate via SMS text and rely on their devices for the internet, if available. This information is especially telling when considering that the continent lacks traditional, wired infrastructure and that many people use their phones to move their money. Kenya’s M-Pesa payment platform sees an average fund exchange of $20-million per day and East Africa alone presently accounts for 80% of all mobile money transactions. The burgeoning industry is just one of many tied to mobile phone use and has spurred massive economic growth.
Angaza is a large multinational firm catering to many people in emergent nations and offering energy and connectivity solutions. In Africa, they’ve masterfully taken the moving parts that are the proliferation of cell phone technology and mobile banking and conjoined them to the massive effort to become continentally electrified. In essence, they’ve taken the cell phone and energy markets from infancy to adolescence in a well played and short amount of time. Using mobile banking, they’re able to sell solar power generation apparatus using a pay-as-you-go (PAYG) method, popular with savvy consumers who lack large capital but have access to cell phones.
The PAYG method has been successful for several reasons, mainly through using existing channels. Angaza contends that, “Accepting energy pre-payments through mobile money avoids the servicing costs of traditional loans, simplifies payment tracking for our partners, and streamlines the payment process for our end-customers. Data transfer over the cellular voice channel leverages the customer’s own phone to convey payment information to their PAYG-enabled solar device via the cellular network. This low-cost implementation of PAYG finally makes energy affordable to the massive off-grid market in the developing world.” Customers with little to no access to traditional brick and mortar banking find this extremely useful. Angaza’s strategy is a profitable one when considering that, “In East Africa, a typical family spends heavily on lighting and cell phone charging—often 30% or more of their annual income…”
Angaza has made self-sufficient energy production affordable by connecting markets and promoting simple payment plans. The informal infrastructure, if you will, that is facilitating these developments is more limber and adaptable than a traditional, wired one. Using a PAYG system is economically sound and benefits consumers who can now afford to add energy to their lives. By relying on the market and private industry, the opportunity for self sufficiency and mobility in a growing global economy is now a reality for many Africans that has redefined conventional notions of infrastructure.
– David Smith