Can Obama's 'Power Africa' Initiative Double Access to Electricity in Sub-Saharan Africa?

It is commendable that the Obama administration wants to help Africa build power grids and get electricity for its people. But there is little evidence to back up the claim that an amount as small as $7 billion -- or $16 billion, if we include the private sector investment -- will "double" access.
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Following in the footsteps of his two presidential predecessors, Obama unveiled his signature Africa initiative: Power Africa. Bill Clinton initiated the African Growth and Opportunity Act (AGOA), a trade agreement that allows African countries to export tariff-free goods to U.S. markets. George W. Bush initiated the President's Emergency Plan for AIDS Relief (PEPFAR) to combat HIV/AIDS, an initiative that made him popular on the continent.

There is no question that electricity in Africa is inaccessible and unaffordable to most people. Even for the wealthy, the limited supply makes its availability unreliable, and frequent power outages, or "délestage," as it is known in Francophone countries, are a reality for Africa's residents. Of the 1.2 billion world citizens who live in the dark, around 550 million live in Africa.

The African Development Bank (AFDB) estimates that only 42 percent of people in Africa have access to electricity, compared with 75 percent in the developing world. In Sub-Saharan Africa access to electricity is even lower, at 30 percent overall and 14 percent in rural areas. This lack of light has ripple effects across many other areas: Children don't get a quality education because they are unable to study at night, and modern health care facilities become inaccessible. Clearly, there is a lot to be done. To close the gap, the World Bank estimates a need of $93 billion in annual investment in Africa's infrastructure over a period of 10 years -- half of which is needed just for power supply.

With this gap, Africa needs huge national, regional and international investments to "bring light where there is darkness," as Obama put it. In a speech at the University of Cape Town, Obama pledged $7 billion from the U.S. government over the next five years to double access to electricity in Africa. Here is what he said:

So today, I am proud to announce a new initiative. We've been dealing with agriculture. We've been dealing with health. Now we're going to talk about power: Power Africa, a new initiative that will double access to power in sub-Saharan Africa. Double it. [Applause.] We're going to start by investing $7 billion in U.S. government resources. We're going to partner with the private sector, who themselves have committed more than $9 billion in investment.

That's right, he said the word "double" twice. The U.S. government pledged $7 billion, while the private sector will chip in with an additional $9 billion over a period of five years, doubling Africa's access to electricity!

Then news headlines caught the phrase: "US promises billions to double Africa's access to electricity," said NPR; "Obama Announces Plan To Boost Africans' Electricity," declared the Bloomberg News; "Obama pledges to help double electricity in Sub-Saharan Africa," the Christian Science Monitor said. Forbes has perhaps the best analysis, with enough details of the deal, which is more of an investment than a pledge to help -- a welcome shift.

It is commendable that the Obama administration wants to help Africa build power grids and get electricity for its people. But let us recognize that $7 billion is a dent in Africa's electricity needs, and there is little evidence to back up the claim that an amount as small as $7 billion -- or $16 billion, if we include the private sector investment -- will "double" access to electricity for Sub-Saharan Africa.

Africa is already spending over $45 billion every year in infrastructure (according to World Bank estimates of 2009), and a large bulk of it goes to the power supply. The question becomes: How is $7 billion over five years -- or $1.4 billion every year -- going to do the magic of doubling access to electricity?

Bright Simons of IMANI, a think tank in Accra, Ghana, puts it this way in the Financial Times:

If all the electricity generated in Africa was shared equally, each household will have enough to power a normal light-bulb for about 3.5 hours a day per person. With Obama's new initiative, this would increase by roughly 18 more minutes if implementation was perfect.

Because Africa's electricity challenges are not due to capital investment in generation alone, implementation can never be perfect. For example, if all the money being voted for this initiative was spent on building power plants, as the preceding scenario assumes, one will still have to contend with maintenance challenges and, connected with that, efficient administration of the power system, including investment in transmission and distribution, as well as government policy on ensuring that people pay realistic prices for the power they consume.

In many African countries this has been far from simple. Once these factors are taken into consideration, it will be remarkable if the initiative succeeds in providing five more minutes of electrical light per person per African household per day.

It is true that Africa desperately needs more investments in order to meet its needs in power supply, and Obama's new initiative is welcome, but it won't double Africa's access to electricity. The math just doesn't add up. It might help a little -- maybe five more minutes per person per day, as Simmons suggested -- in addition to the current 3.5 hours. That is a good enough help, but it should not be inflated.

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