I attended the London School of Economics (LSE) Africa Summit from 22 – 23 April 2016. This summit’s agenda on Africa was impressive and bound to raise interesting discussions. Pressing issues facing the African continent and stifling its growth were discussed. Over the coming days, I will write about them. I decided to start off with energy, not following the programme religiously.
I very much welcomed a panel dedicated to powering Africa at this summit. It was chaired by Okendo Lewis-Gayle, the Founder and Chairman of Harambe Entrepreneur Alliance. On the panel were Dr Ambrosie Orjiako – Chairman of Seplat Petroleum Nigeria, Dr Ernest Azudialu-Obiejesi – President & Group Managing Director for Obi Jackson Group Nigeria, Martin Bratt – Partner at McKinsey & Company UK, Oluseyi Makinde – Group Managing Director & Founder of Makon Group Nigeria and Remigious Makumbe from Zimbabwe – Director for Infrastructure & Services for Southern African Development Community (SADC).
It is recognised that Africa is the continent which is most power-deficient in terms of electricity. With millions still highly dependent on carbon-based energy sources, no subject was most important than this. According to the 2014 Africa Energy Outlook report by the International Energy Agency,only 290 million out of 915 million people in sub-Saharan Africa have access to electricity. The total number without access keeps rising with increase in population. The rapid growth in population means that solutions to be deployed will fall short of resolving electricity outages if not done correctly and strategically. This in turn will affect the environment for business and entrepreneurship, further slowing social and economic growth much needed for the continent to work its way out of poverty.
The panel raised the hindrances they faced in various projects they worked on to improve electricity generation. One of the major issues related to signing documents to kickstart a power construction project. One example illustrated was a case where it took six years to sort out and sign the documents. Another problem raised was logistics – an issue which many on the continent may not be aware of. For example, to start a project in Nigeria, partners in Chad could not fly directly into Nigeria and often had to fly into Europe before being able to get a flight back into other African countries. Ridiculous much? Yes and it happens. In order to get things moving, team meetings have had to be held in South Africa to ease logistics. This ends up raising project costs. The panellists, especially those who had worked on energy projects talked of the difficulty they faced in trying to plan appropriately for projects.
Project lengths for electricity varied depending on whether they were independent or regional power projects. It was identified that cost-effective tariffs would be a good incentive which is lacking. The audience was keen to understand how indigenous populations gained from having the power lines constructed on their lands and in some cases had their farmlands destroyed.
The panel agreed that it was never an easy decision as sometimes it was a necessary step to take and that they tried as much as they could to involve the communities. They bemoaned the fact that if they had to compensate every single village along the route of the power lines, there would be no money left for the project. The expense in some cases crippled projects before they could be initiated as the demands were getting too high.
There was a strong sentiment in the audience that nuclear power would ensure a more steady supply of electricity. Some on the panel argued that nuclear was too expensive and why engage in such an expensive venture when nature had blessed most African countries with coal, low in sulphite? What was encouraged was for governments to improve modes of transporting the coal to power generating plants.
Some in the audience advocated the use of renewables and solar as a friendlier energy option. When the costs were evaluated, they seemed expensive. Though Dayo Olopade in her book ‘The Bright Continent: Breaking Rules and Making Change in Modern Africa‘ would disagree to some extent.
The main continent-wide solution identified was the use of mixed power generation. The panel advocated a coal and hydroelectric combo was most cost-effective. Nuclear power was seen as a solution to be visited a lot later in the future as it was too expensive. The panel concluded the electricity needs of Africa were diverse and varied from rural to urban areas.