“Without electricity, clean water and basic healthcare, the talented people who will facilitate responsible, sustainable economic growth cannot do their job and may seek opportunities elsewhere”.
The Vice-Chairman and President/CEO, General Electric Global Growth & Operations, John Rice, said on Wednesday that inadequate electricity supply is still a huge setback to economic growth in six of 10 sub-Saharan Africa’s fastest growing economies.
Mr. Rice was speaking in Abuja as over 1,000 delegates were getting ready for the commencement of the 24th World Economic Forum, WEF, for Africa holding in Nigeria on the theme: “Forging Inclusive Growth, Creating Jobs”.
Noting the huge promise for growth, Mr. Rice said there is enormous potential for rapid development in sub-Saharan Africa.
Despite this potential, he said he remains struck by the contradictions and counter-forces working against the desired growth, with lack of electricity as one of the major issues.
“Without electricity, clean water and basic healthcare, the talented people who will facilitate responsible, sustainable economic growth cannot do their job and may seek opportunities elsewhere,” he said.
Citing the example of Nairobi, known to be home for booming tech communities, like iHub, and providing a base for start-ups and entrepreneurs to collaborate, Mr. Rice said about 60 per cent of the population live in slums and lack access to basic sanitation and electricity.
Though he acknowledged the efforts of governments through African companies to tackle many of these challenges, he said more still needs to be done to take the continent to where it wants to be.
Afrisol Energy, a four-year-old Kenyan power company, he said, was exploring ways to turn waste into fuel to power Nairobi’s slums and rural neighbourhoods.
The bio-digesters Afrisol, the President of GE said, would both alleviate sanitation problems and generate the electricity required by school children to read their books after dusk, or clinics to refrigerate vaccines.
“Afrisol’s work is symbolic of the inventiveness and entrepreneurial spirit that drives people to overcome structural barriers and unlock growth potential.
“The company was one of the winners of an innovation challenge launched by GE and the US-Africa Development Foundation that awarded funding to businesses working to bring sustainable, renewable energy technologies to underserved markets,” he said.
The company was one of the over 150 that showcases how many African companies’ innovations were helping resolve the region’s challenges, particularly the issue of power supply deficit.
About 74 per cent of the population in sub-Saharan Africa, he said, have no access to electricity.
With power inefficiencies costing the region about $3.2 billion annually in lost productivity, Mr. Rice said electricity consumption was only one-tenth of what is available in the developing world.
He was confident that African countries are capable of building sustained and inclusive economic growth by increasing access to reliable and affordable power supply. He used Nigeria’s policy of deregulation of the energy sector as one of the ways governments are working to pave the way for more partnerships and a market-based environment to attract private capital to supplement government investment.
GE, he said, is involved in several of the initiatives to improve power generation in the region, pledging to jointly develop 10 gigawatts of incremental power with the Nigerian government over the next decade.
He said GE was committed to increase the installed electricity capacity by more than 60 per cent, making access to electricity possible for more Nigerians.
“We (GE) are also committing to support projects in Ghana that will provide 1.3 gigawatts of additional power. Also, as one of the founding partners for the Power Africa Initiative, we are committed to help bring online 5 gigawatts of additional electric generation capacity, in cooperation with the initiative’s government and other private sector partners,” he announced.
He said the opportunities for Africa to lift itself out of energy poverty are right in front of the various stakeholders, despite the pressures on grid infrastructure, burdened with enormous demand.
Despite the effort of governments in Africa, he said about 600 million Africans are still left un-served, with distributed power as the best solution.
Distributed power systems, he said, are capable of bringing electricity to off-grid communities, while improving waste management practices and minimizing greenhouse gas emissions.
He described gas-to-power initiative as another way to make power available to people who need it.
Despite the sub-Saharan Africa’s endowment of over 400 trillion cubic feet, TCF, of gas reserves, Mr. Rice said the region still has a huge power deficit.
Nigeria, which is one of the countries with the largest gas reserves in the world, he said, has not been able to utilize the resource to her advantage, as it has only been able to generate only about 2,000MW of electricity using gas.
“Bringing these stranded assets “online” will help meet the urgent demand for electricity and provide an alternative to diesel in low-income countries,” he said.
The barriers to drawing electricity to communities and cities across the continent, he said, are increasingly becoming less physical, but more procedural.
On the other hand, technology solutions like virtual pipelines – which use compression technology to transport “containers” of natural gas –make it possible to take advantage of stranded gas resources long before physical pipelines are in place.
He stressed the need for the region to find ways of resolving issues affecting financing of energy projects, as well as how to agree to contracts more efficiently, and properly price gas once it is brought to market.
On the way forward, he said, governments, companies and the confluence of public and private capital would all be part of an equation in which the whole can be greater than the sum of the parts.
“This is a future that will no longer be limited to our imaginations, but that becomes a reality”, he assured.