In the past, I’ve written on these pages about Africa’s electricity deficit. No doubt I’ll return to it again because it’s probably the single biggest hindrance to development on the continent. The statistics are staggering – New York City produces five times more electricity than Nigeria, which is Africa’s biggest economy. Or if you take the whole continent minus South Africa, its electricity output is the same as Argentina’s. Basically, two-thirds of people in Africa live in darkness. It’s little wonder that industrialisation is not happening as quickly as it should be.
The last few months have been particularly bad. In March, Nigeria’s electricity generation fell to zero for a few hours because of a system failure. Ghana has had ongoing problems, producing the Twitter hashtag, #dumsormuststop (dumsor means on/off). People are saying, “Enough with the lights going off and on.” Zambia has also had severe blackouts over the last few months. This takes a toll on business. A proprietor is either forced to invest in a generator, or for countries not used to the blackouts, down time, since they have no contingencies. The price of the fuel for the generator and maintenance of equipment is invariably passed on to the consumer. Businesses in Nigeria spend up to 40% of their operating costs on energy, while in more developed countries it’s usually below 10%.
Imagine the difference that extra 30% would have if a business could invest that in expanding rather than sinking it into diesel for a generator. Or imagine how much more money consumers would have in their pockets if everything they bought didn’t have a diesel factor in the price. Think of the efficiency achieved and the creativity unleashed by the mobile phone revolution in Africa, then multiply that by 50 – that’s what I reckon (it’s not scientific) would happen if electricity in Africa were readily available.
The good news is that policymakers know this, and investors see huge opportunities. When President Obama visited Kenya last year, he didn’t come with money to solve all of Africa’s ills. He came with the Power Africa Plan because he realised how much of a difference having electricity in Africa could make. The consulting firm McKinsey says Africa will need US$835bn to power the entire continent by 2030. That’s a lot of investment, a lot of profit, and millions of jobs.
Everything hinges on how quickly power can get to the people. Technology has moved on from the early days of electricity and communities don’t have to wait years for grids and dirty coal fired stations to be built. Power generation is hardly ever the problem in an African context – it’s the ability to distribute electricity over a wide area that power companies struggle with. But with renewables being able to come and stream quicker, and micro-grids catering to smaller geographical spaces now a viable alternative to centralised systems, we could light up Africa pretty quickly.