Podcast
Questions and Answers
Which continent does Africa trail in key measures such as electric power consumption per capita, rail density, and road density?
Which continent does Africa trail in key measures such as electric power consumption per capita, rail density, and road density?
- Asia
- BRIC countries (Brazil, Russia, India, and China) (correct)
- Europe
- North America
What has the AfDB committed to energy projects between 2017 and 2022?
What has the AfDB committed to energy projects between 2017 and 2022?
- $12 million
- $12 billion (correct)
- $45 billion
- $45 million
What is the goal of Africa50 in creating an attractive asset class for institutional investors?
What is the goal of Africa50 in creating an attractive asset class for institutional investors?
- To promote sustainable agriculture
- To secure international aid
- To increase government investment
- To generate returns from infrastructure projects (correct)
What is hindering economic development and business operations in Africa?
What is hindering economic development and business operations in Africa?
Why do one-third of surveyed executives in sub-Saharan Africa generate their own power or have backup generators?
Why do one-third of surveyed executives in sub-Saharan Africa generate their own power or have backup generators?
Which sector can play a critical role in delivering new infrastructure in Africa?
Which sector can play a critical role in delivering new infrastructure in Africa?
What approach does GE's distributed power business allow companies to take?
What approach does GE's distributed power business allow companies to take?
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Study Notes
- Sub-Saharan Africa has a significant electricity gap, with per-person consumption in countries like Ethiopia, Kenya, and Nigeria being less than one-tenth that of BRIC countries.
- Nearly 600 million people in sub-Saharan Africa lack access to electricity altogether, with many communities living half their lives in the dark.
- The power gap imposes high costs on businesses, with one-third of surveyed executives generating their own power or having backup generators. Mobile phone provider MTN, for example, runs generators at every base station in many African countries.
- The cost of generator-based power is three to six times higher than grid power, leading to significant expenses for companies.
- The demand for electricity in Africa is projected to quadruple between 2010 and 2040.
- Infrastructure investment in Africa has remained around 3.5% of GDP since 2000, but it is estimated that this will need to increase to 4.5% to close the infrastructure gap.
- Total infrastructure investment in Africa reached $80 billion in 2015, with a significant portion coming from China's state-linked institutions.
- The private sector can play a critical role in delivering new infrastructure, with companies like GE signing agreements with African governments to finance, design, and build vital infrastructure.
- GE's approach includes a commitment from the government to long-term infrastructure development and the willingness to solve bottlenecks.
- GE also has a large-scale distributed power business, allowing companies to generate their own power at the point of use.
- Tidjane Thiam, CEO of Credit Suisse, believes private-sector investments and innovations could be catalytic for infrastructure development in Africa.
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