A common misconception about electricity in Sub-Saharan Africa is that providing access is the main challenge. However, even in areas with access to the electricity grid, only 57% of households are actually connected. The primary goal of providing electricity is to improve people’s lives, but simply providing more people with access to electricity has not resulted in the economic transformation we had expected in the region.
Why is it that people are not connecting even when electricity is available? If the ultimate objective of electrification is to increase people’s incomes and, thereby reduce poverty, what can governments do to achieve this goal?
Our recent report, Electricity Access in Sub-Saharan Africa, explains why governments need to stop looking at access as the primary measure of progress and start thinking of electrification as one of several interdependent elements needed to generate income, reduce poverty and transform their economies.
Why isn’t having access to electricity enough?
Low consumption, high cost, and low reliability are still major challenges for the region. Electricity consumption in Africa is extremely low and the cost is high, compared with other developing regions.
In 2014, the average consumption per person was just 483 kilowatt-hours, the equivalent powering a 50-watt light bulb continuously for a year. Consider that in many African countries, it costs more than 10% of per capita gross domestic product to power a refrigerator for a year. In a region where 437 million people live on less than $1.90 a day, this is simply out of reach for most. A large number of people still cannot afford to connect or use a reasonable amount of electricity, let alone purchase appliances that help them generate income.
For many households, incomes are too unpredictable to pay connection charges or to commit to monthly fees, and many resort to sharing meters to avoid these charges. Sharing and under-consumption mean that utilities are unable to maintain or expand the electricity network.
In addition, electric supply is often unreliable. Households and businesses can be without access to power for several hours of the day and night. And, even when power is available, brownouts (intentional or unintentional drops in voltage) are frequent.
According to World Bank Enterprise Surveys data, for 25 of 29 African countries, less than one-third of firms have reliable access to electricity.
What can governments do to support productive uses of electricity to achieve economic transformation?
If African nations want to transform their economies, electricity must be tackled head-on. For the 600 million people who live without electricity—80% of who live in rural areas—governments need to do more and they need to do it better. For this, governments in Sub-Saharan Africa need to move from counting the number of people who have access to electricity to implementing policies that promote productive uses of electricity. Productive use of electricity helps generate incomes for families and firms who can then consume enough electricity to make utilities financially viable. A thriving economy and business can then support public finance through taxes for reinvestment.
What do productive uses of electricity look like?
Reliable electricity for industries and businesses is central. Imagine a new internet café able to provide reliable service for its customers; a sewing factory that employs hundreds of people with a constant power supply; or a farming business that produces in the off season because it is able to pump water. Both practitioners and academics are recognizing this issue. The Energy for Growth Hub is a leading example that aims at catalyzing efforts to help power Africa for its development. But success will require that the governments take the lead.
To find out more about how Sub-Saharan African governments can rethink its electrification strategies for economic transformation, including how off-grid solutions can be effective, read Electricity Access in Sub-Saharan Africa: Uptake, Reliability, and Complementary Factors for Economic Impact