Power Is Africa's Major Problem, Says ECA

President Omar al-Bashir at the Merowe Dam in Sudan. This project will provide the largest source of electrical generation on the African continent., a photo by Pan-African News Wire File Photos on Flickr.

Power is Africa’s major problem, says UN

Wednesday, 06 July 2011 00:00 By Kamal Tayo Oropo
Nigerian Guardian

IT may not come as a surprise, but a study by the United Nations (UN) Economic Commission for Africa on Public-Private Partnerships in Africa’s Energy Sector says on the average, sub-Saharan Africa experiences approximately 56 power outages a year, which has resulted in loss of revenues, damage to equipment and high cost of running generators.

Coming on the heels of a recent Addis Ababa, Ethiopia meeting called to address Public-Private Partnerships for Africa’s struggling energy sector, the report underscored the widely held notion that no other infrastructure sector inhibits Gross Domestic Product (GDP) growth across the African continent more than electricity.

As Africa’s energy demands increase, power, according to a statement by the Information Service of UNECA, remains the biggest infrastructure challenge and overall, the economic costs of power outages can easily rise to one to two per cent of GDP.

Infrastructure Specialist with the Infrastructure Consortium for Africa (ICA), Callixte Kambanda, who attended the just concluded workshop on Public-Private Partnerships in Africa’s Energy Sector, the continent needs to meet a yearly funding gap of $ 29.2 billion for the energy sector – a figure estimated by his organisation’s Africa Infrastructure Country Diagnostic.

The shortfalls in funding cannot be met through public financing alone. Kambanda said: “It is not sufficient. Private sector involvement is required and countries need to strategise on how to engage with private sector and that also includes building the required capacity and business environment.”

The event, organised by the UNECA and the Korean Economics Institute, brought together key actors from the private sector, government ministries, regional power pools and international organisations. One key objective was to present key lessons for a workable PPP implementation guide/framework, which is consistent with good governance principles, which the UNECA hopes that it will encourage greater private sector participation in the energy sector.

On the average, Director of the Governance and Public Administration Division at the ECA Mr. Abdalla Hamdok, stated that only 12 per cent of African households have access to electricity.

Hamdok added: “Promoting investment in this sector cannot be overemphasized, for without investment in this sector, we will not be able to achieve sustainable growth and development on the continent.”

The link between power and growth has been studied extensively and experts attending the meeting concurred with the African Infrastructure Country Diagnostic, which estimates that in the area of infrastructure, the overall yearly funding gap is $35 billion, of which 80 per cent relates to power.

Countries such as Korea have invested heavily in infrastructure development and Kim, Jin-Woo, President of the Korea Energy Economics Institute (KEEI) present at the meeting noted that though Africa is rich in resources, the gap between energy supply and demand has been increasing.