Where is the Light?


Guest Columnist By AdeoyeFadeyibi

Africa’s power outage continues to cripple the growth of its economy.
Compared to other parts of the world, power generation capacity in Sub-Saharan Africa remains woefully inadequate. While countries such as the United States, United Kingdom and China enjoy 100% access to electricity; we know all too well that in Africa access to electricity varies from non-existent to the often limited. In the so-called global village, too much of Africa remains in the dark. In a world where all aspects of our lives are increasingly driven by the Internet of things, our exclusion from the very power source, is both an embarrassment and a business impediment. The impact on healthcare and education is obvious. We can celebrate the dedication of our youth, struggling with homework under kerosene lamps or battery power; but it should not be like this.

According to a recent report by Afrobarometer, only six in 10 Africans are connected to the electric grid; with the lowest recorded connections in Burundi (11%), Malawi (12%), and Burkina Faso (14%). Being connected to the grid does not mean power is available or supplied: about 50% of Nigerians are connected to the electric grid, but only a fraction of those connections work.

We have liberated ourselves; but what is political power, without economic power? How can economic power be achieved without electric power? The reasons are all too familiar. Since gaining independence from colonial masters, African nations have struggled with issues of instability, corruption and policy inconsistency; leaving critical aspects of the economies such as electricity infrastructure to wither through lack of investment. The economic consequences are clear: the combination of no electric grid, no household connection and poor connection quality has resulted in underdeveloped African economies.

This situation cannot persist, and as Africans, we must take control of our economic destiny and ensure Africa moves beyond just talk and potential. With stable electricity, Africa could be the next industrial powerhouse of the world. The industrialisation of China, caused the country to change from an impoverished agrarian economy to an industrial powerhouse; one that now produces nearly half of the world’s industrial goods – the African continent has the capacity and capability to repeat this “miracle”.

There are lessons to be learnt from China’s economic turnaround. The country’s success was the result of economic reforms, which began in 1978 when the government encouraged investments in the agricultural sector, opened up the country to foreign investment and granted more freedom to entrepreneurs to start businesses. A second stage of reform began in the late 1980s, and though the state still controlled the banking and petroleum sectors, the country successfully lifted price controls and implemented stable policies and regulations. Presently, according to the International Monetary Fund (IMF), China is the world’s largest economy worth £11 trillion, overtaking the U.S. at £10.8 trillion. These strides were achieved as a result of public and private sector collaboration in the critical sectors of the economy.

Africa has begun a similar journey to success. Most prominent among these initiatives is the Power Africa initiative championed by the President of the United States, Barack Obama, which has attracted significant investments from the likes of General Electric (GE). GE pledged to invest $2 billion in Africa by 2018 and currently sponsors the Power Africa Off-Grid Energy Challenge, run annually in partnership with the United States African Development Foundation (USADF) and the United States Agency for International Development (USAID). We are beginning to see evidence of the impact. We are grateful for the generosity and leadership of the US in this area. The efforts of the African Development Bank (AFDB) in supporting private sector investment in powering Africa is another positive intervention in this regard.

Heirs Holdings has also pledged its commitment to the Power Africa initiative. Through Transcorp Plc operating the Ughelli Power Plant, Heirs Holdings has pledged to invest up to $2.5 billion of a total combined public-private investment of $16 billion aimed at trebling access to power in six sub-Sahara African nations. As a testimony to private sector discipline and ingenuity, in less than 18 months, Transcorp Power increased power generation output from 160 megawatts (MW) to 634MW and aims to produce 860MW before the end of 2016 and a total of 2200MW by 2018 or at least 25 per cent of the national generation target set by the Nigerian government.

Significant results are being achieved with the efforts of the private sector in realising stable electricity in Africa. There is much work to be done though. Our public sector leaders must meet the private sector midway by addressing regulatory constraints, tariff issues, and incentives to encourage the requisite massive investments needed to fix power in Africa. With greater public – private sector collaboration, there is light at the end of the tunnel, and we all proudly say and claim that we see the light.
• Mr. Fadeyibi is CEO, Transcorp Power, an investee company of Heirs Holdings Limited.