<strong>July</strong> <strong>2013</strong>InDepthPowering a Continent:The Multi-Billion Dollar ElectricityScramble for AfricaBy Denise O’DonovanDuring an official visit <strong>by</strong> President Barack Obama to Africalast month, a Washington Post blogger traveling with thedelegation reported that the hotel where he was staying inTanzania had experienced ‘a few kinks’. During a nationwideblackout, the lights went off in all of the guest rooms while agroup of journalists reportedly got stuck in an elevator. Thepresident himself was also staying at the hotel at the time.Periodic power outages and the general lack of energygeneration is an extreme issue in many countries throughoutthe continent. Even where economies are showing impressivesigns of growth and development, significant amounts of thepopulation - in particular those living in rural areas - are stillwithout any access. As many developing countries in Sub-Saharan Africa work gradually towards reducing theirdependency on international aid <strong>by</strong> generating more of theirown resources through trade and investment, the need toimprove national infrastructures is great.Despite the shortcomings in infrastructure generally, theeconomic outlook for the continent on a whole lookspromising. The Regional Economic Outlook: Sub-SaharanAfrica report, published in May <strong>by</strong> the International MonetaryFund (IMF), forecasted a moderate, broad-based accelerationin growth of around 5.4% in <strong>2013</strong> and 5.7% in 2014.Antoinette Sayeh, director of the IMF’s African department,said Sub-Saharan Africa will be amongst the fastest growingregions in the world, second only to Asia. Countries leadingthe charge include Angola, Ethiopia, Ghana, Nigeria, Rwanda,and Tanzania. Foremost amongst them are Mozambique andCote d' Ivoire, who are gaining serious ground on other fastdevelopingeconomies in the region - such as Botswana andNamibia - with projected growth levels of 8%. (Despite theseadvancements, it should be noted that the World Bankestimates that GPI per capita in Sub-Saharan Africa remainsthe lowest in the world at $1,345 USD in 2012.)In order for Africa to sustain and even accelerate this level ofgrowth, its leaders now realize they must focus on theprovision of reliable power. This is no easy task given thattwo-thirds of the population in Sub-Saharan Africa currentlylacks any access to electricity.Returning to Obama’s recent visit to three nations in Africa,one of the key announcements was the ‘Power Africa’initiative. Under its plans, the U.S. has committed tospending $7 billion USD to enhance electricity access in fivepartner countries in the region. Despite its ambitious scale, itmight be fair to say that ‘Power Africa’ didn’t generate asmuch hype as it deserved.In this month’s In Depth, I will take a look at the current stateof electrical supply in Africa. I will also look in detail at theterms of this new multi-billion dollar initiative to improveaccess to electricity, reflect upon some of the key playersalready involved, and discuss if there is actual potential forinvestment going forward.32 Back to Summary
<strong>July</strong> <strong>2013</strong>InDepthThe State of Electricity in AfricaWorldwide, more than 1.2 billion people - or 20% of theworld's population - are still without access to electricity,according to the Global Tracking Framework Report publishedin May. Unsurprisingly almost all of those going withoutaccess to electricity live in developing countries.In Africa, this figure stands at approximately 550 millioncontinent-wide. Nigeria is ranked as the second highestcountry in the world with 82.4 million; coming second only toIndia (which has a startling 300 million people with noaccess). It is estimated that a total of $300 billion USD will beneeded alone to deliver universal access <strong>by</strong> 2030.According to the report, some 30 African countriesexperience frequent outages and load shedding. According toan earlier report <strong>by</strong> the Word Bank, ‘Energy StrategyApproach Paper’, in order to balance supply Sub-SaharanAfrica will need an annual investment of $40 billion USD.Currently the region spends only about $11 billion annually, aquarter of what is required.The U.S. Energy Information Administration (EIA) throws upsome very interesting power generation data from the pasttwo decades.African Populations Without Access ToElectricity:Nigeria: 82.4 million,Ethiopia: 63.9 million,Democratic Republic of the Congo: 55.9 million,Tanzania: 38.2 million,Kenya: 31.2 million,Sudan: 30.9 million,Uganda: 28.5 million,Mozambique: 19.9 million,Madagascar: 17.8 million,Burkina Faso: 14.3 million,Niger: 14.1 million, andMalawi: 13.6 million.Source: World Bank, <strong>2013</strong>33 Back to Summary