Over the last decade, Africa’s economic prospects have improved significantly with 7 out of the 10 fastest growing economies in 2010. Yet Africa still faces a crisis of access to reliable energy, which some believe is holding it back from its real potential. According to the World Bank, power in Africa is “inaccessible, unaffordable, and unreliable for most people. This traps people in poverty – students find it difficult to read after dark, clinics cannot refrigerate vaccines and businesses have shorter operating hours.” More than two-thirds of the population in sub-Saharan Africa is without electricity and more than 85 percent living in rural areas lack access to power.
What that does this mean for U.S. global engagement? Recently, the Obama administration and Congress released initiatives that would utilize public-private partnerships to make a real impact on Africa’s ability to reach its full potential. While on his trip to Senegal, South Africa and Tanzania, President Obama announced the “Power Africa” initiative. Showcasing the importance of the continent to U.S. foreign policy in the coming years and the value of American global engagement, he explained the purpose of the “Power Africa” initiative is “to pave the way for investment and growth” to lift Africa out of its energy crisis.
In Cape Town, President Obama said, “Access to electricity is fundamental to opportunity in this age. It’s the light that children study by; the energy that allows an idea to be transformed into a real business. It’s the lifeline for families to meet their most basic needs. And it’s the connection that’s needed to plug Africa into the grid of the global economy.” However, this has the potential to be not just good for Africa, but good for U.S. businesses as well. U.S. Trade Representative Michael Froman recently highlighted trade and investment as “force multipliers” to improving Africa’s economic growth, as well as creating “jobs and exports and growth back here in the United States.”
The U.S. will partner with seven African nations that have “set ambitious goals” for generating power in their countries. The initiative will include a $7 billion commitment from U.S. aid agencies over the next five years, but the key will be public-private partnerships with commitments totaling $9 billion from the private sector. Examples of these partnerships with U.S. companies include, General Electric assisting with providing new affordable energy by utilizing expertise and capital from Tanzania and Ghana and Symbion Power supporting 1,500 megawatts in new and innovative energy projects.
It’s not just the Executive Branch that is focusing on the African energy crisis and opportunities for America. Congress recently introduced new legislation, which would call on the U.S. create a comprehensive policy to encourage access to electricity in sub-Saharan Africa. House Foreign Affairs Committee Chairman Ed Royce (R-CA) and Ranking Member Rep. Eliot Engel (D-NY), the key sponsors of the Electrify Africa Act of 2013, both argued that the legislation would help to eliminate the access to reliable energy as “one of the biggest impediments to economic growth on the continent.”
The “Power Africa” initiative and Congress’s Electrify Africa Act highlight the impact of private sector investment in Africa, but also demonstrate the potential of effective foreign assistance. Prior to his departure for Africa, President Obama told a press gaggle, “if you look at the bang for the buck that we’re getting when [foreign assistance is] done right, when it’s well designed, and when it’s scaled at the local level with input from local folks, it can really make a huge difference.” And make a difference it can. Innovative public-private collaboration on energy may be the next step in “powering” Africa to its potential greatness.