Why is Africa still in the dark?

by Nellie Peyton | @nelliepeyton | Thomson Reuters Foundation
Wednesday, 18 January 2017 11:04 GMT

A power labourer fixes electric cables on a pole in Ojodu district in Nigeria's commercial capital Lagos, Sept. 29, 2016. REUTERS/Akintunde Akinleye

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Despite growing urgency, the "powering Africa" conversation is stuck on old themes

"I'm tired of Africa being in the dark," said African Development Bank President Akinwumi Adesina at the World Economic Forum in Davos, Switzerland, this week.

He meant it literally – more than 600 million Africans lack access to electricity. But while the need for solutions is becoming more urgent as a lack of power hinders Africa's development, the debate on how to solve this problem keeps circling back to old themes.  

At a panel discussion bringing together government, institutional and industry leaders, the conversation revealed some of the reasons why progress is slow.   

Powering Africa is not merely a question of bringing reading lights to rural villages. In some of the continent’s fastest-growing economies, such as Ghana and Ivory Coast, power cuts in major cities prevent businesses from operating at their full potential.

Installing reliable power grids in many African countries would unlock a whole new phase of economic and social development, experts say.

The first step must be to get the private sector involved, said Adesina. South Africa’s Deputy President Cyril Ramaphosa agreed with him, saying that in the past people relied only on governments to fix the problem, but this can no longer be the case.  

"My challenge would be... if you're in the private sector, go to the government with really innovative, smart ideas," said Ramaphosa. 

And if the government doesn't take them, keep trying, he said. 

PROPOSALS GATHERING DUST

But Nigerian billionaire Aliko Dangote, who is funding major energy projects in the West African country, pointed out what has already frustrated many power companies and entrepreneurs: some African governments have piles of proposals they are not doing anything about.

When Senegal received 82 proposals for renewable energy projects in 2010, it took three years to sort through them and chose just ten. The backlog is even worse in other countries, industry executives say.    

"I think the problem is the lack of a credible master plan," Dangote said. "In West Africa we shouldn’t really have any issues in providing power.”

“What we need is clear policy direction," he added.  

Dangote’s position echoes that of prominent Nigerian philanthropist Tony Elumelu, who said at the same event in 2015 that the key priority for Africa should be “policy, policy, policy”. 

Of course, both policy and private-sector initiatives are vital parts of the puzzle. But the conversation at the World Economic Forum suggested governments and businesses are putting the responsibility on each other to move things forward, rather than figuring out effective ways to work together.

Many of the problems holding back power development today, as noted by the panel, revolve around bankability. This means guaranteeing cash flows from an energy project, such as a plant or pipeline, to an extent that will satisfy investors and financiers.

Bankability depends on a wide range of factors such as the enforceability of rules, the reliability of infrastructure and the clarity of laws. These can be complex and difficult issues to fix, but they are not new, and should not come as a surprise to anyone.

The Davos panelists highlighted the bankability problem, but did not take the next step toward proposing solutions. 

BRIGHT FUTURE FOR OFF-GRID

However, there were a few bright spots in the discussion. Off-grid energy solutions are working well in many parts of Africa, bringing lights and electric appliances to smaller towns and villages - and promising start-ups just need scaling up, said Adesina.

As an example, he mentioned Kenyan company M-KOPA Solar, one of the most successful examples of an off-grid, pay-as-you-go solar system which customers buy in small installments with mobile money.

The panelists also discussed the need for better regional integration, which would allow countries with higher production capacity or natural energy sources to share surplus power with their neighbours.

It can be hard to create a sense of urgency around a problem that has existed for decades. But Rachel Kyte, CEO of the U.N. initiative Sustainable Energy for All, closed the discussion on an important point: competition might have the best chance of spurring change.

“This is a multi-trillion dollar business,” Kyte said. “We need to start a race to the top.”

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