7 Questions
Which continent does Africa trail in key measures such as electric power consumption per capita, rail density, and road density?
BRIC countries (Brazil, Russia, India, and China)
What has the AfDB committed to energy projects between 2017 and 2022?
$12 billion
What is the goal of Africa50 in creating an attractive asset class for institutional investors?
To generate returns from infrastructure projects
What is hindering economic development and business operations in Africa?
Infrastructure gaps in areas like water and logistics
Why do one-third of surveyed executives in sub-Saharan Africa generate their own power or have backup generators?
High costs of grid power
Which sector can play a critical role in delivering new infrastructure in Africa?
Private sector
What approach does GE's distributed power business allow companies to take?
Generate their own power at the point of use
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.
Explore the challenges of Africa's infrastructure gap and the potential economic opportunities it presents for businesses. Learn about the perspectives of influential figures like Jack Ma and the potential for innovation and growth in addressing these gaps.
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