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Powering up Africa’s Renewable Energy Revolution

Makhtar Diop's picture
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As African Presidents, Prime Ministers, and business leaders arrive in Washington to attend the first US-Africa Summit, one topic that will be paramount in their discussions with President Obama and his Cabinet is: how governments and families can access affordable electricity across the African continent.

Consider the facts: one in three Africans, that’s 600 million people, has no access to electricity. Neither do some 10 million small and medium-sized enterprises. Those homes and businesses fortunate enough to have power pay three times as much as those in the United States and Europe; furthermore, they routinely endure power outages that cost their countries from one to four percent in lost GDP every year.

Akosombo Dam in Ghana, June 18, 2006. (Photo by Jonathan Ernst)Despite the fact that Africa is blessed with some of the world’s largest hydropower and geothermal resources (10-15 GW of geothermal potential in the Rift Valley alone), bountiful solar and wind resources, as well as significant natural gas reserves, total power generation capacity in Africa is about 80,000 megawatts (MW) (including South Africa), roughly the same as that of Spain or South Korea.

As Africa enters its 20th consecutive year of economic expansion, with the World Bank forecasting that Africa’s GDP growth will remain steady at 4.7 percent in 2014, and strengthening to 5.1 percent in each of 2015 and 2016, the continent needs more electric power. Specifically, Africa needs to add 7,000 MW of generation capacity each year to meet the projected growth in demand, yet it has achieved only 1,000 MW of additional power generation annually.

Over the last week I visited Cameroon and the Democratic Republic of the Congo, two of Africa’s so-called ‘fountain states.’  The resources in these two countries – along with Guinea, Ethiopia, and Uganda – can generate enough hydroelectricity to satisfy the growing demand in Africa. I saw the range of applications for which this power is needed, and I saw clear solutions.

In Eastern Cameroon I visited the construction site for the Lom Pangar hydropower project. Once construction is complete and the reservoir is filled in the next couple of years, this new dam on the Sanaga River will improve the reliability of power supply and lower the cost for up to five million Cameroonians. The Lom Pangar project will also pave the way for developing the full 6,000 MW of hydropower potential of the Sanaga River by regulating the flow of the river.      
 
In the Democratic Republic of Congo, last week, I visited the Inga hydropower site on the mighty Congo River. DRC’s overall hydropower potential is estimated at 100,000 MW, the third largest in the world behind China and Russia, yet only 2.5% of this key resource has been developed. With 40,000 MW of generation potential, Inga is the world’s largest hydropower site. Its proper development can make Inga the African continent’s most cost-effective, renewable source of energy with an estimated generation cost of US$ 0.03 per kilowatt hour with little or no carbon footprint--a significant added virtue.

Learning from your peers: A lesson from Uganda and Senegal

Joseph Oryokot's picture

 Sarah Farhat, World Bank Group
















Despite Africa’s great diversity of cultures and climates, countries on the continent often speak the same language when it comes to tackling common development challenges. Senegal and Uganda recently did just that, teaming up to exchange best practices to boost agricultural productivity and employment on both sides of the continent.

I witnessed this knowledge exchange firsthand as I accompanied a Ugandan delegation led by Hon. Maria Kiwanuka, Uganda’s minister of finance, planning, and economic development, on its visit to Senegal. Their core mission was to seek out innovative ways to boost economic growth and create job opportunities for the country’s burgeoning youth, a challenge faced by Uganda and Senegal alike. As both countries continue to experience an increase in urbanization and population growth, and currently have economies that are predominantly based on agriculture, one common answer to this rising challenge is the enhancement of agricultural productivity and the development of agricultural value chains.

Big vs. small firms: one size does not fit all

Jacques Morisset's picture



Is bigger always better? Economists have long debated what size firms are more likely to drive business expansion and job creation. In industrial countries like the United States, small (young) firms contribute up to two-thirds of all net job creation and account for a predominant share of innovation. (Source: McKinsey, Restarting the US small-business growth engine, November 2012). In developing countries, evidence from Ethiopia, Ghana and Madagascar shows that the vast majority of small operators remain small, and so are unlikely to create many decent jobs over time [Source: World Bank, Youth Employment, 2014]. By contrast, ‘big’ enterprises are seen as the best providers of employment opportunities and new technologies.

The difference in role and performance of small firms in developing and industrial countries reflects to a large extent their owners’ characteristics. In the US, small firm owners are generally more educated and wealthier than the average worker, while the opposite is true in most developing countries. This point was emphasized by E. Duflo and A. Banerjee in their famous book ‘Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty’ (Penguin, 2011). Most business owners in developing countries are considered to be ‘reluctant’ entrepreneurs; essentially unskilled workers that are pushed into entrepreneurship for lack of other feasible options for employment.

This is also very much a reality in Tanzania where small business owners have few skills and limited financial and physical assets. Of the three million non-farm businesses operating in the country, almost 90% of business owners are confined in self-employment. Only 3% of business owners possess post-secondary level education. As a result, their businesses are generally small, informal, unspecialized, young and unproductive. They also tend to be extremely fragile with high exit rates, and operate sporadically during the year. Put simply, most small businesses are not well equipped to expand and become competitive.

Using Knowledge to Fight Poverty in Africa

Kathleen Beegle's picture

Photo Credit: @Gates Foundation. A girl plays with a bicycle tire in the slum of Korogocho, one of the largest slum neighborhoods of Nairobi, Kenya
 
Although sub-Saharan Africa has had sustained economic growth for almost two decades, the incidence of extreme poverty in the region remains staggeringly high. Our best estimate is that in 2010 almost one in every two (49%) Africans lived on less than U$1.25 per day (at 2005 prices).

This is an impressive decrease from 58% in 1999, but at the same time there is a general sense that progress has been too slow. Africa is rising, with GDP growth rates upwards of 6% between 2003 and 2013 (if one excludes richer and less dynamic South Africa) but the poor’s living standards are not rising as fast as GDP.

Putting poverty on the map

Kathleen Beegle's picture

The expansion of household surveys in Africa can now show us the number of poor people in most countries in the region. This data is a powerful tool for understanding the challenges of poverty reduction. Due to the costs and complexity of these surveys, the data usually does not show us estimates of poverty at “local” levels. That is, they provide limited sub-national poverty estimates.
For example, maybe we can measure district or regional poverty in Malawi and Tanzania from the surveys, but what is more challenging is estimating poverty across areas within the districts or regions (known as “traditional authorities” in Malawi and “wards” in Tanzania).
 
To address this shortfall, several years ago a research team from the World Bank developed a technique for combining household surveys with population census data, and poverty maps were born.  Poverty maps can be used to help governments and development partners not only monitor progress, but also plan how resources are allocated. These maps depend on having access to census data that is somewhat close in time to the household survey data.  But what if there is no recent census (they are usually done every 10 years) or the census data cannot be obtained? (I will resist naming and shaming any specific country): we are left with no map.  Can we fill in the knowledge gaps in our maps?

Nollywood star Stella Damasus invites you to join a live discussion on gender based violence

Anne Dronnier's picture


A multi-disciplinary art exhibition on the topic of gender based violence (GBV) is opening today at the World Bank in Washington, DC. The exhibition is entitled “1 in 3,” since an estimated one in three women worldwide will be beaten, coerced into sex or otherwise abused in her lifetime. “1 in 3” includes art from around the world - photographs, paintings, drawings, sculpture; films and videos; posters from advertising campaigns against GBV, and performing art. 

Building pro-growth coalition for reforms: The Caribbean Growth Forum

Andrea Gallina's picture

Nighttime in St George's, Grenada

What does it take to make reforms work in small island countries?

At the end of June 2013, twelve Caribbean countries presented a roadmap for growth in three areas -logistics and connectivity, investment climate, skills and productivity- to a broad audience of private sector representatives, international development institutions, regional organization, civil society and media. That event culminated a 7-month long phase during which policy-making was not the result of close-doors meetings, but a process of intense negotiation, consultations, and consensus building among all actors of each Caribbean country’s societies. All of which was documented in real time and in a transparent fashion by each government. Yes, business was not “business as usual”.
 
Reforms priorities were agreed and a calendar for implementation brushed on a power point slide in the wonderful framework of five stars Bahamian hotel…After the workshop lights, projects and microphones shut down, many of us went home with a familiar sound in our ears: and now what? Was it another “talkshop”?

A Safety Net for Stella

Kavita Watsa's picture
Bold Steps to Reduce Extreme Poverty in Tanzania
The government is supporting Tanzania's poorest families in an effort to reach those left behind by the country's largely urban growth.

Mtoto mzuri sana. Stella’s face lights up as I admire her baby, but she doesn’t reply. We are in the primary school compound in Chehembe, a village about 50 kilometers from Tanzania’s administrative capital, Dodoma. Stella is waiting to be registered in the country’s social safety net program, which is meant to cushion very poor households against sudden losses of income. And we are waiting to hear Stella’s story, to ask her how many children she has, and how she earns a living.

Rich Countries, Poor People: Will Africa’s commodity boom benefit the poor?

Anand Rajaram's picture

Travelling across Africa these days you are likely to run into increasing numbers of mining, oil, and gas industry personnel engaged in exploration, drilling, and extraction across the continent. Although commodity prices are moderating, the discoveries being made in Africa offer the real prospect of significant revenue to many cash-poor, aid-dependent governments in the decade ahead. If you care about development, the question is whether these revenues will catalyze broad economic development and whether they will benefit the poor in Africa.

The importance of linking development to peace and security

Makhtar Diop's picture
During the last week, we traveled in the Sahel region with UN Secretary-General Ban Ki-moon and the leaders of the African Union Commission, the African Development Bank, and the European Union. The result was exciting. Please watch my video blog to learn more.
VP Diop: Sahel trip shows importance of development linked to peace, security

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