An international development expert says the new president of the United States will have an “unprecedented opportunity” to help Africa in its quest for “high and sustainable” growth. Research done by Vijaya Ramachandran of the Center for Global Development (CGD) in Washington, D.C., indicates that the lack of power and adequate roads are the major obstacles to Africa’s prosperity. She’s urging the next American administration to support a series of initiatives designed to improve these sectors in Africa and thereby boost the continent’s growth, arguing that it will benefit both Africa and the US.
“Power shuts off for several hours during the day in the majority of countries we surveyed in Africa. Power outages occur from anywhere from 50 to 150 days in the year. This is a…chronic, ongoing problem that they all have to deal with in terms of trying to keep their businesses running,” says Ramachandran, an expert in foreign direct investment, entrepreneurship and private sector development, who’s also worked on projects at the World Bank and the United Nations.
She recently led a CGD study that surveyed the effect of poor power and roads on 11,000 businesses across Africa.
“We’ve discovered that power emerges as a very major constraint in Africa. Over half of the businesses we surveyed say that it’s their most serious constraint,” Ramachandran told VOA.
She says perhaps no country in Africa is more affected by lack of power than Nigeria.
“Nigeria has a very complicated mix of problems that has resulted in a very, very bad problem in terms of power. Almost everybody (there) says they have power outages every single day of the year; sometimes power is out for days on end, particularly outside of the major cities.”
Ramachandran says the “root causes” of Nigeria’s power dilemma are similar to those elsewhere in Africa.
“There just isn’t enough power generated to meet demand, but there’s also chronic mismanagement of power delivery by the government power authorities. So it’s a problem of weak governance – a regulatory problem – as well as a chronic undersupply.”
Ramachandran says Africa is home to a sixth of the world’s population, yet her investigation shows that the continent generates only about four per cent of its electricity – three-quarters of which is used by South Africa and northern Africa.
In a recent CGD paper, she writes, “The need for electricity (in Africa) is both enormous and unmet, with many cities and towns experiencing blackouts several times a day.”
Africa has ‘worst’ power crises
The consequences of lack of power for Africa are myriad, including environmental degradation, children unable to learn properly, massive economic losses because of business and factory shutdowns, and the large-scale waste of fuel used in emergency generators.
Ramachandran cites World Bank data that 500 million Africans – or two-thirds of the continent’s total population – don’t have access to “modern energy.”
“The Bank says…. about $17 billion is spent every year by the “energy poor” in Africa on fuel-based lighting systems, such as kerosene lamps, that are expensive, provide poor lighting, and create indoor air pollution.”
As a result of the fact that many people don’t have power in Africa, they cut down vast areas of forest for wood to burn so that they’re able to cook, light and heat their homes.
“Biomass – mostly firewood – constitutes about 56 per cent of all energy use in sub-Saharan Africa…. Such fuels also accelerate deforestation,” says Ramachandran.
Her study shows the “worst cases” of power undersupply in Africa to be Nigeria, the Democratic Republic of Congo, the Gambia, and Guinea. In each of these, she says, there are at least 170 days a year during which citizens experience significant power outages. Next are Rwanda, Tanzania and Uganda, where power supply is interrupted 120 days a year. Most other African countries, says Ramachandran, endure outages on more than 50 days in the year.
However, she writes in her paper, six countries – Guinea-Bissau, Lesotho, Mali, Senegal, Swaziland and Zambia – fare better, reporting outages on between 10 and 50 days.
“Only a handful of countries – Botswana, Mauritius, Namibia – report outages on less than 10 days a year,” Ramachandran says.
Power cuts result in an “overwhelmingly” negative impact on economies in Africa, she maintains.
“Smaller businesses simply shut down and wait for the power to come back on…. It’s a great burden, especially on small and medium-sized enterprises. Larger firms are able to cope with the problem. Almost every large firm we surveyed in Africa had a private generator, and they cope in that way,” Ramachandran explains.
But she adds that the larger firms also suffer big financial losses running into millions of dollars as a result of the situation.
“The cost of power generated using a private generator is anywhere from two to four times the cost of power delivered from a good public grid.”
US must “drive down prices of expensive power” in Africa
Ramachandran says energy in Africa is so expensive that, even when it’s available, many can’t afford it.
Her study reveals that in China, the cost of energy is three per cent of total cost for businesses, whereas only one country in Africa, South Africa, shows a comparable share.
But even this is changing in Africa’s largest economy, with cities in South Africa for the past year experiencing “rolling blackouts. Even more troublesome is the fact that this situation will likely deteriorate further before it improves,” says Ramachandran.
The result is that the cost of power in South Africa is increasing at a rapid rate.
Ramachandran says part of the reason why energy’s so expensive in Africa is that it’s in very short supply.
“We have seen probably three decades now of extreme underinvestment in power projects in Africa. The international community has only woken up to this problem in the last five or so years, and has now started to increase its attention and investment in power plants. Also, I don’t want to underestimate the regulatory problems, the governance problems, the corruption problems. Those have also driven up prices.”
In order to ease Africa’s energy crises, Ramachandran advises the next man in the White House to help American businesses to invest on the continent, “both in terms of renewable energy projects and larger power plant projects.”
She says Africa needs “huge investments in regional power plants – hydroelectric power systems or other types of systems that can supply multiple countries at the same time. And there are a number of these projects that are on the drawing board or that have great potential, and I think the US government can help get them off the ground.”
The American assistance doesn’t necessarily have to be in the form of direct financial aid, Ramachandran asserts, but should “facilitate US investment in Africa” in the near future.
“(Washington could) provide investment guarantees, for example, to get American businesses involved in investing in these power projects. And that will help address the power problems in the major (African) cities; it will help South Africa, for example, (to) alleviate its power problems. (That country) really is in a situation now where it needs extra generation capacity in a very urgent manner.”
Clean Infrastructure Initiative
Ramachandran’s unequivocal that the next US president should announce a “Clean Infrastructure Initiative” to end Africa’s power and transportation problems.
“This initiative should have two main objectives: harnessing innovations in clean energy for Africa, and financing the construction and maintenance of infrastructure through multilateral institutions,” she writes in her recent essay.
The new American administration should help Africa to provide electricity that’s “off the public grid,” Ramachandran states. “By that I mean solar projects, small-scale wind energy projects, small-scale hydro projects, that will supply electricity to small towns or a few villages or even a single village.”
She says some of these small-scale technologies are focused on renewable energy and are being developed in the US, and that there’s “great scope for the United States to facilitate the transfer of those technologies to particularly smaller cities and rural areas in Africa where there is no public grid.”
Ramachandran describes Africa’s potential to produce renewable energy, with US guidance and support, as “enormous” – particularly with regard to large-scale hydroelectric power.
“There are large rivers in central Africa which can be harnessed to provide a massive amount of power to multiple African countries,” the development expert comments.
Ramachandran adds that there’s also “huge scope” for other power sources in Africa.
“Africa gets an enormous amount of solar radiation – perhaps the highest in the world. None of that is tapped. There’s potential for geothermal energy along the Rift Valley. There’s potential for wind energy, particularly on the north west coast of Africa. So there’s huge potential, huge resources of untapped energy (in Africa).”
To achieve the initiative she’s suggesting, Ramachandran says the new occupant of the Oval Office must support a $1 billion Clean Energy Fund for Africa. Such a fund, she continues, should be facilitated by the Overseas Private Investment Corporation to enable the transfer of clean technology, including renewable energy, from the US to Africa. Washington, she writes in her paper, must “encourage the African Development Bank to focus on regional clean infrastructure projects only, in return for which the United States should increase its capital contribution to the organization by 25 percent a year for each of the next four years.”
Africa’s roads in 'incredible disrepair'
Ramachandran’s research shows that Africa has the worst roads in the world.
“Things are in incredible disrepair and, again, a chronic undersupply and a lack of attention (has been) paid to this problem for the last several decades,” she says.
Ramachandran says most countries in sub-Saharan Africa “lag far behind every other region in the world in paved-road mileage and modern freight and passenger transportation systems. This lack of adequate transportation affects the level of business activity by lowering productivity and limiting the entry of new enterprises.”
She points out that poor or even non-existent roads mean that many African enterprises are forced to “either supply only to fragmented regional markets or restrict themselves to market opportunities with profits large enough to cover high transportation costs.”
Ramachandran says the negative effects of bad roads are difficult to reverse because, unlike the power supply, which can improve or deteriorate rapidly, “transportation bottlenecks are typically long-term – bad roads and limited transnational links have kept markets and businesses highly segmented for decades in Africa.”
Nevertheless, she again sees opportunities for the next administration in America to ease Africa’s roads crisis, stating, “US technology and US investment can play a very significant role in increasing the supply of roads” on the continent.
“The advent of toll roads (in Africa) provides scope for private investment that the US can underwrite or facilitate or help transfer,” she adds.
Ramachandran acknowledges that many good roads have been constructed around Africa in past decades…. But they’ve deteriorated drastically because they haven’t been maintained.
She says in the future Africa must make use of US expertise to ensure that roads remain in good condition.
“There’s lots of advice available from international authorities on what’s needed to ensure that well-built roads are kept in good shape and how to provide for the recurring costs of road maintenance. These can be built into contracts for infrastructure development. This is as true for power projects as it is for road projects. There are mechanisms by which this can be done, how tax revenues can be used, and toll money allocated, for the maintenance of these roads,” Ramachandran explains.
She maintains that US businesses have the technology and the knowledge and must be given the opportunity to compete on bids to develop Africa’s power and roads.
Ramachandran says, “The expertise of (American) power companies…. can be harnessed to address the shortage of electricity in Africa. And construction companies can help to build roads, using the best of US technology and human resources. These efforts will benefit the African people as well as the (American) companies and employees who provide infrastructure services.”
