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LAGOS (Capital Markets in Africa) – Welcome to the April edition of INTO AFRICA, the publication with fresh insight into Africa’s emerging capital markets. Please download by clicking: INTO AFRICA PUBLICATION: APRIL 2017 EDITION.
Africa has one of the fastest growing populations, by the year 2050, annual increases will exceed 42 million people per year and total population will have doubled to 2.4 billion, according to the United Nations Population Division. Of the 2.37 billion increases in population expected worldwide by 2050, Africa alone will contribute 54%. Nevertheless, electrification rates are among the lowest in the World and the main inhibitor to growth on the African continent is the lack of access to reliable and cost effective power supply for homes and businesses. In quantifying the impact, the World Bank Group reported that load shedding costs the continent 2.1 percent of its GDP on average per year.
This revelation prompted President Obama to launch Power Africa in 2013 via an executive order and was reinforced when U.S Congress passed the Electrify Africa Act of 2015. The act ensures U.S. involvement in power projects until at least 2020 and the Power Africa aims to double Africa’s energy output by 2030.
To emphasise the urgency, African Development Bank Group President Dr. Akinwumi Adesina, in his address at Emerging Markets Forum, Abidjan stated:
“Some 645 million people in Africa do not have access to electricity. Power must be at the top of everyone’s to-do list.” To solve this, he said the Bank Group has committed to invest $12 billion over the next five years in Africa’s power sector. “We expect to leverage another $45-$50 billion in co-financing for energy projects in the region during the same period”.
We at Capital Markets in Africa are of the opinion that African governments and their partners need to move faster to bridge the continent’s huge energy gap by adopting every available solution, on and off the grid. At the same time, governments need to make power projects viable, feasible and bankable by providing an enabling environment for private sector participation.
Please download by clicking: INTO AFRICA PUBLICATION: APRIL 2017 EDITION.