Friday, July 26, 2013

Addressing Africa's Energy Gap for Economic Development: Key Elements - Demographics & Infrastructure

Hilton American Houston, 6pm, Africa Leadership Magazine - 2013
Conference Theme: Bridging the Energy Infrastructure Gap in Africa
My Remarks by Ambassador (Dr.) Robin Renee Sanders, CEO FEEEDS

I have recently been discussing at different forums in the U.S. and Africa that today's Africa is not your mother’s Africa. It is a region which continues to undergo a lot of positive political and economic changes.  Many more of its 54 countries are embracing democratic change, holding free and fair elections, and moving forward as key players on the global stage. However, this does not diminish the serious challenges that remain in certain parts of the region on security, governance, transparency, and development in the energy and infrastructure sectors.
When I was asked to say a few words at this important conference on “Bridging the Energy Infrastructure Gap in Africa,” I agreed as long as I could talk about the impact of Africa’s energy and infrastructure issues as regards to development. 

Yes, we have all heard the stories that 7-8 of the fastest growing economies in the world today are in Sub-Saharan Africa.  This growth is project to remain high for 2013, according to both the IMF and World Bank, and over the next 20 years, with GDP rates between 5.8-7 percent.

But what does this mean to the average African person who still lives on less than $1.00 a day – a good bit of that poverty is due to both a lack of access to adequate energy options, and attendant infrastructure problems.  The way I like to think of this is: “energy-infrastructure-development are 3 legs of the same stool.” There is no full economic progress unless these 3 legs are addressed, and addressed together. According to the UN despite all the good news on economic growth, the per capita increase from 2011 to 2012was only 2.7 to 2.8 per cent.

But before I talk about the energy-infrastructure-development links, there are a number of fundamentals that are key to putting your conference theme into perspective in order to better appreciate the enormous task ahead. First it is important to link energy infrastructure issues to the demographics of today and what they mean for both issues and for the future development of the continent.

The single most important demographics that affects Africa's energy sector, infrastructure and attendant development challenges is: population.  Right now the region is slated to reach a population of 1.9 billion people by 2030 (providing growth rates remain the same), with the billionth person having been born on the continent in December 2011. Furthermore, 60 per cent of that population is under 35 years of age, and nearly half of that 1.9 billion population figure will be women.*

So, how do these demographics relate to the energy-infrastructure link? If you think the gap is bad now between development and poverty, if the energy-infrastructure link is not addressed now more effectively and more efficiently, SSAfrica's population demographics are just going to further widen the gap – leaving those in poverty now, in poverty, but also adding another 1 million people yearly that could enter the poverty matrix. And, let’s not forget the issue of job creation and the negative impact that the current problems of energy and infrastructure have on Africa’s employment. This employment needs will further be acerbated with the rising population numbers noted above.

Thus, despite all the good economic news coming from the region, timproving the issues of the energy-infrastructure link is critical to helping many African people improve their quality of life.  Think of energy-infrastructure in terms other than the two important components of electricity and power generation and you will get a better perspective on what needs to be done. Energy-Infrastructure issues are also about connectivity – rail, road, air.  It is about water sanitation, and agricultural development, trade, and access to health services, education, and job creation – all fundamentals of sustainable development. 
If the Energy-Infrastructure links are not there, and if any of these elements or links in the development chain are missing, sustainable development and forward movement will always be hindered.
I cannot leave out small and medium enterprises (SME), and the African Diaspora and their role in all of this. SME and the African Diaspora are needed for development and growing Africa’s middle class. However, for them to grow and prosper, they will need both energy and infrastructure to develop their businesses, which will expand Africa’s current middle class past the 331 million mark.

Here are some factoids to ponder:  Only 1 in 4 Africans has access to electricity, inter-African trade is about 10 per cent of total exports, and only about 30 per cent of the region has paved roads or working railways. The entire installed generation capacity of the 48 countries in SSAfrica is 68 gigawatts, and 25 percent of that capacity is unavailable because of aging or non-functioning plants and poor maintenance. A good example that makes the energy-infrastructure link so stark for the Sub-Saharan region is that Spain alone produces more electricity for its population than the entire SSAfrica region does for its population.
Last but not least, we cannot forget renenewables in this discussion, which need to be focused on alongside of clean fossil fuel uses. Given the population demographics I already mentioned, sustainable and environmentally friendly alternatives are a must, particularly for the 600 million people in Africa’s rural areas without electricity.

Here are some things to think about and some recommendations:

·      It will be important for African nations to start now to develop renewable energy plans;

·      Rural areas using renewable energy will likely be cheaper to support than trying to connect every area to a national grid. A report by the European Joint Research Center actually mapped out why types of renewables work best where and would be cheaper where.

The European Joint Research Center report also noted a few interesting things to consider when identifying renewable options for the African Continent:

·      Wind energy is good for North Africa;

·      Solar for SSAfrica and the Sahara belt

·      Small hydroelectric power plants would be best for Equatorial Africa given high populations closer to river systems than the national grid.

Furthermore the Solar Energy Society of South of Africa further highlighted the job creation aspect of renewables:

·      Photovoltaic can create 62 jobs per gigawatt hour of electricity;

·      Wind can create 12 in comparison to less than one job in the coal industry for the same energy output.

In the end the message is:  We need to keep in mind the link between energy and infrastructure and the attendant issues of population and demographics, particularly as SSAfrica continues toward 1.9 billion people. Job creation needs increase as a result. Africa’s efforts to pivot its focus, resources and talent toward addressing in a more comprehensive, effective, and efficient manner its energy infrastructure gap is paramount to sustainable economic development.

Maintaining the current economic gains or economic boom, and changing the lives of the millions who live in poverty is dependent on these changes.

 *France24 news report 5/4/2013).