Lack of infrastructure in Africa has continued to perpetuate its impoverished state. Poverty in Africa is caused by dozens of factors that contribute to intergenerational poverty, but a key issue is access to electricity. Although access to electricity has advanced, there are still many more improvements to be made.
In Africa, access to electricity has been a serious challenge. Two out of three people in sub-Saharan Africa lack access to electricity. In total, there are over 600 million Africans without connection to an electrical network. Reports from the International Energy Agency’s (IEA) Africa Outlook state that on average, electricity consumption per capita is not even enough to power a 50-watt light bulb continuously.
Even with electricity, reliability is low. Twenty-five of the 54 countries in Africa report frequent power crises including outages, irregular supply and high electricity costs. This creates numerous problems and constraints for individuals and businesses.
Investments in Africa’s electrification offer many benefits beyond the important direct job creation in energy infrastructure. Evidence suggests that household electrification also increases job opportunities due to its ability to allow people more working time, and enables the growth of rural micro-entrepreneurship. Improvements appear to be underway, with a variety of recent initiatives aimed at investment in electrification.
Africa’s demand for electricity is also growing. With a current growth rate of 6 percent per year, it will likely exceed GDP growth until 2040. This has sparked private investment and stimulated more diversified project financing. As a result, sub-Saharan Africa has seen power generation increase by 21 percent, with Chinese contractors accounting for 30 percent of this growth, to reach 115 gigawatts between 2010 and 2015.
Investment interest in Africa’s electrification has continued to increase since 2011. Of the 38 sectors reported in the Financial Times fDi Markets database, which monitors investment projects, capital investment and job creation, the alternative/renewable energy sector was the third most attractive for companies that invested in Africa in 2015 and 2016.
One major investment highlight was the $21 billion for new projects, many of which focus on renewable sources of energy. Investment trends in the renewable energy sector continue to be especially impressive, further combating poverty in Africa. Ethiopia has been seen as a leader in clean energy infrastructure, having generated the bulk of its energy needs from hydropower and other investments in geothermal, solar and wind. Its recent creation of the Ashegoda wind farm has the capacity of generating 120MW.
In the Democratic Republic of the Congo, the development of the Grand Inga Dam has the potential to generate 40,000MW of electricity. Both of these provide Africans with not only more access to electricity but also ways to make it more affordable.
Improving access to electricity is essential to decreasing poverty in Africa. It provides households and businesses with a tool for successful operation. There have been great strides in solving this problem in Africa, yet much work still needs to be done. Estimates from the World Bank concluded that 93 percent of Africa’s economically viable hydropower potential remains unexploited.
Persistent challenges need to be addressed by the government. A Greenpeace South Africa report found that two main challenges are changing misconceptions about renewable energy’s capabilities and developing the political will to invest in clean energy infrastructure. There is no doubt that through the electrification of Africa, many new opportunities for its countries will be brought to light.
– Ashley Quigley