Electrification is one of the primary drivers of economic and social growth: It’s no accident that all the developed nations in the world have reliable energy infrastructures. By turning our attention to the continent of Africa, we can see the other side of that same coin – according to information from the International Energy Agency, more than 600 million people on the continent lacked electrical service in 2015. This is more than half of the total population. To help bring about the changes necessary to light up African homes and businesses, President Obama signed the “Electrify Africa Act” into law on February 9th, 2016.
The Economist, citing figures from the World Bank, states that power shortages contribute to a reduction in GNP of 2 percent across Africa, and in some countries, like Nigeria, the problem is even more severe. A lack of easily available electricity means that people can’t work during the nighttime hours, reducing productivity. What’s more, foreign investment – desperately needed in many of the poorest countries on earth – becomes difficult as multinational firms are reluctant to open facilities in locations where electrical service is spotty.
The Electrify Africa Act, which took nearly three years to obtain President Obama’s signature, calls for a partnership between public and private institutions to promote access to electricity across Africa. This bipartisan bill worked its way through the legislative process with the help of NGOs like the National Rural Electric Cooperative Association and ONE.
The Electrify Africa initiative will make it easier to achieve the president’s goal – announced in 2013 – of by 2020 providing access to electricity to 50 million people in Africa who currently lack it. One of the selling points of the program is that it’s not expected to cost any taxpayer money – private-sector actors will be footing the bill. The act calls for the expansion of a diverse mix of power solutions, including coal and other traditional fossil fuels along with more renewable options.
Power Africa and the Overseas Private Investment Corporation are two of the organizations that will be contributing to the effort. They will be working with sub-Saharan governments to find sustainable answers to their electricity needs. Other organizations have also signed aboard, including the governments of the U.K. and Norway, the World Bank, and private partners of USAID.
These parties will proceed by helping governments set up electric grids in the affected countries, by making it easier to attract investments and by streamlining regulatory red tape for new power projects. They will endeavor to increase generating capacity and thereby extend affordable electricity to millions.
The spread of electricity will contribute to economic growth by freeing businesses from the need to produce their own energy from generators – a costly undertaking. It will also mean that corporate operations can take place around-the-clock. A report from McKinsey notes that there’s a strong correlation between electrification and GDP. A key milestone appears to be around an electrification rate of 80 percent: Few countries with a lower rate of electrification have per capita GDPs of $3,500 or more.
There are plenty of cultural and social advantages as well. Students will be able to study well into the night while their parents cook their meals more quickly and cleanly than they could by using coal or wood as fuel. Health care workers will be able to employ sophisticated diagnostic tools that require electricity, and the refrigeration of certain drugs will extend their useful lifespans.
Alberta Energy has released information indicating that the US alone produced approximately 4,125 terawatt hours of electricity in 2010. By contrast, sub-Saharan Africa, with a population more than three times as large, only produced 423 terawatt hours. Clearly, this region of the world has a lot of catching up to do before it can fully participate in the advantages of modernity.
Africa has lagged behind other areas of the world in electrical generative capacity, which has slowed its economic development. The goals of the Electrify Africa Act aim to change this by promoting the construction of electrical infrastructure in parts of the continent where it is absent or inadequate. While we can’t know for sure whether or not this plan will achieve its objectives, it has brought together a powerful coalition of private organizations and government agencies that certainly has the wherewithal to make a big, positive impact.