US President-Elect Urged to Build Power and Roads in Africa - PART 5 of 5 | Voice of America - English
An international development expert says the new president of the United States will have an ?unprecedented opportunity? to help Africa in its quest for ?high and sustainable? growth. Research done by Vijaya Ramachandran of the Center for Global Development (CGD) in Washington, D.C., indicates that the lack of power and adequate roads are the major obstacles to Africa?s prosperity.
?Powershuts off for several hours during the day in the majority of countries wesurveyed in Africa. Power outages occur from anywhere from 50 to 150 days inthe year. This is a?chronic, ongoing problem that they all have to deal with interms of trying to keep their businesses running,? says Ramachandran, an expertin foreign direct investment, entrepreneurship and private sector development,who?s also worked on projects at the World Bank and the United Nations. Sherecently led a CGD study that surveyed the effect of poor power and roads on11,000 businesses across Africa. ?We?vediscovered that power emerges as a very major constraint in Africa. Over halfof the businesses we surveyed say that it?s their most serious constraint,?Ramachandran told VOA. Shesays perhaps no country in Africa is more affected by lack of power thanNigeria. ?Nigeriahas a very complicated mix of problems that has resulted in a very, very badproblem in terms of power. Almost everybody (there) says they have poweroutages every single day of the year; sometimes power is out for days on end,particularly outside of the major cities.? Ramachandransays the ?root causes? of Nigeria?s power dilemma are similar to thoseelsewhere in Africa. ?Therejust isn?t enough power generated to meet demand, but there?s also chronicmismanagement of power delivery by the government power authorities. So it?s aproblem of weak governance ? a regulatory problem ? as well as a chronicundersupply.? Ramachandransays Africa is home to a sixth of the world?s population, yet her investigationshows that the continent generates only about four per cent of its electricity ? three-quarters of which is used by South Africa andnorthern Africa. In a recent CGD paper, she writes, ?The need forelectricity (in Africa) is both enormous and unmet, with many cities and townsexperiencing blackouts several times a day.? The consequences of lack of power for Africa aremyriad, including environmental degradation, children unable to learn properly,massive economic losses because of business and factory shutdowns, and thelarge-scale waste of fuel used in emergency generators. Ramachandran cites WorldBank data that 500 million Africans ? or two-thirds of the continent?s totalpopulation ? don?t have access to ?modern energy.? ?The Bank says?. about $17billion is spent every year by the ?energy poor? in Africa on fuel-basedlighting systems, such as kerosene lamps, that are expensive, provide poorlighting, and create indoor air pollution.? As a result of the fact thatmany people don?t have power in Africa, they cut down vast areas of forest forwood to burn so that they?re able to cook, light and heat their homes. ?Biomass ? mostly firewood ?constitutes about 56 per cent of all energy use in sub-Saharan Africa?. Suchfuels also accelerate deforestation,? says Ramachandran. Her study shows the ?worstcases? of power undersupply in Africa to be Nigeria, the Democratic Republic ofCongo, the Gambia, and Guinea. In each of these, she says, there are at least170 days a year during which citizens experience significant power outages.Next are Rwanda, Tanzania and Uganda, where power supply is interrupted 120days a year. Most other African countries, says Ramachandran, endure outages onmore than 50 days in the year. However, she writes in herpaper, six countries ? Guinea-Bissau, Lesotho, Mali, Senegal, Swaziland andZambia ? fare better, reporting outages on between 10 and 50 days. ?Only a handful of countries? Botswana, Mauritius, Namibia ? report outages on less than 10 days a year,?Ramachandran says. Power cuts result in an?overwhelmingly? negative impact on economies in Africa, she maintains. ?Smallerbusinesses simply shut down and wait for the power to come back on?. It?s agreat burden, especially on small and medium-sized enterprises. Larger firmsare able to cope with the problem. Almost every large firm we surveyed inAfrica had a private generator, and they cope in that way,? Ramachandran explains. Butshe adds that the larger firms also suffer big financial losses running intomillions of dollars as a result of the situation. ?Thecost of power generated using a private generator is anywhere from two to fourtimes the cost of power delivered from a good public grid.? Ramachandransays energy in Africa is so expensive that, even when it?s available, manycan?t afford it. Herstudy reveals that in China, the cost of energy is three per cent of total cost forbusinesses, whereas only one country in Africa, South Africa, shows acomparable share. But even this is changing in Africa?s largesteconomy, with cities in South Africa for the past year experiencing ?rollingblackouts. Even more troublesome is the fact that this situation will likelydeteriorate further before it improves,? says Ramachandran. The result is that the cost of power in South Africais increasing at a rapid rate. Ramachandransays part of the reason why energy?s so expensive in Africa is that it?s invery short supply. ?Wehave seen probably three decades now of extreme underinvestment in powerprojects in Africa. The international community has only woken up to thisproblem in the last five or so years, and has now started to increase itsattention and investment in power plants. Also, I don?t want to underestimatethe regulatory problems, the governance problems, the corruption problems.Those have also driven up prices.? Inorder to ease Africa?s energy crises, Ramachandran advises the next man in theWhite House to help American businesses to invest on the continent, ?both interms of renewable energy projects and larger power plant projects.? Shesays Africa needs ?huge investments in regional power plants ? hydroelectricpower systems or other types of systems that can supply multiple countries atthe same time. And there are a number of these projects that are on the drawingboard or that have great potential, and I think the US government can help get themoff the ground.? TheAmerican assistance doesn?t necessarily have to be in the form of directfinancial aid, Ramachandran asserts, but should ?facilitate US investment inAfrica? in the near future. ?(Washingtoncould) provide investment guarantees, for example, to get American businessesinvolved in investing in these power projects. And that will help address thepower problems in the major (African) cities; it will help South Africa, forexample, (to) alleviate its power problems. (That country) really is in asituation now where it needs extra generation capacity in a very urgentmanner.? Ramachandran?s unequivocalthat the next US president should announce a ?Clean Infrastructure Initiative?to end Africa?s power and transportation problems. ?This initiative should have two main objectives:harnessing innovations in clean energy for Africa, and financing theconstruction and maintenance of infrastructure through multilateralinstitutions,? she writes in her recent essay. Thenew American administration should help Africa to provide electricity that?s?off the public grid,? Ramachandran states. ?By that I mean solar projects,small-scale wind energy projects, small-scale hydro projects, that will supplyelectricity to small towns or a few villages or even a single village.? Shesays some of these small-scale technologies are focused on renewable energy andare being developed in the US, and that there?s ?great scope for the UnitedStates to facilitate the transfer of those technologies to particularly smallercities and rural areas in Africa where there is no public grid.? Ramachandrandescribes Africa?s potential to produce renewable energy, with US guidance andsupport, as ?enormous? ? particularly with regard to large-scale hydroelectricpower. ?Thereare large rivers in central Africa which can be harnessed to provide a massiveamount of power to multiple African countries,? the development expertcomments. Ramachandranadds that there?s also ?huge scope? for other power sources in Africa. ?Africagets an enormous amount of solar radiation ? perhaps the highest in the world.None of that is tapped. There?s potential for geothermal energy along the RiftValley. There?s potential for wind energy, particularly on the north west coastof Africa. So there?s huge potential, huge resources of untapped energy (inAfrica).? To achieve the initiativeshe?s suggesting, Ramachandran says the new occupant of the Oval Office mustsupport a $1billion Clean Energy Fund for Africa. Such a fund, she continues, should befacilitated by the Overseas Private Investment Corporation to enable thetransfer of clean technology, including renewable energy, from the US toAfrica. Washington, she writes in her paper, must ?encourage the AfricanDevelopment Bank to focus on regional clean infrastructure projects only, inreturn for which the United States should increase its capital contribution tothe organization by 25 percent a year for each of the next four years.? Ramachandran?sresearch shows that Africa has the worst roads in the world. ?Thingsare in incredible disrepair and, again, a chronic undersupply and a lack ofattention (has been) paid to this problem for the last several decades,? shesays. Ramachandransays most countries in sub-Saharan Africa ?lag far behind every other region inthe world in paved-road mileage and modern freight and passenger transportationsystems. This lack of adequate transportation affects the level of businessactivity by lowering productivity and limiting the entry of new enterprises.? Shepoints out that poor or even non-existent roads mean that many Africanenterprises are forced to ?either supply only to fragmented regional markets orrestrict themselves to market opportunities with profits large enough to coverhigh transportation costs.? Ramachandransays the negative effects of bad roads are difficult to reverse because, unlikethe power supply, which can improve or deteriorate rapidly, ?transportationbottlenecks are typically long-term ? badroads and limited transnational links have kept markets and businesses highlysegmented for decades in Africa.? Nevertheless,she again sees opportunities for the next administration in America to easeAfrica?s roads crisis, stating, ?US technology and US investment can play avery significant role in increasing the supply of roads? on the continent. ?Theadvent of toll roads (in Africa) provides scope for private investment that theUS can underwrite or facilitate or help transfer,? she adds. Ramachandranacknowledges that many good roads have been constructed around Africa in pastdecades?. But they?ve deteriorated drastically because they haven?t beenmaintained. Shesays in the future Africa must make use of US expertise to ensure that roadsremain in good condition. ?There?slots of advice available from international authorities on what?s needed toensure that well-built roads are kept in good shape and how to provide for therecurring costs of road maintenance. These can be built into contracts forinfrastructure development. This is as true for power projects as it is forroad projects. There are mechanisms by which this can be done, how tax revenuescan be used, and toll money allocated, for the maintenance of these roads,?Ramachandran explains. She maintains that US businesses have thetechnology and the knowledge and must be given the opportunity to compete onbids to develop Africa?s power and roads. Ramachandran says, ?The expertise of(American) power companies?. can be harnessed to address the shortage ofelectricity in Africa. And construction companies can help to build roads,using the best of US technology and human resources. These efforts will benefitthe African people as well as the (American) companies and employees whoprovide infrastructure services.?