Challenges facing sub Saharan Africa power sector

Posted on May 20, 2014 10:42 am

Power outages across the African continent are common routine with East Africa accounting for the lion share. Amid increasing demands that are raising concern the continent’s stunted generation capacity is stifling investment and economic growth. During the dry season supply always fall below peak demand while aging facilities that are every now and then shut for repairs especially in South Africa and Nigeria where most plants were built in 1960s and 70s.Delays in building new plants may slow the expansion of Africa’s second largest economy, according to an energy expert I spoke to few days ago. “It’s time to worry,” Contador Harrison. “Investors are always forward-looking and when they see projections of a potential power problem, they’ll decide to put their investments somewhere else.” The strain this year on power plants highlights how the Africa’s under-performing electricity sector threatens the continent’s economic growth, which accounts for more than half of ten world’s fastest growing economies.

Gross domestic product rose by more than 5 percent in 2013. It is poised to remain among world’s fastest expanding until 2019 according to data recently released by Economist Intelligence Unit. As the economies in Africa expand, so has the continent’s demand for electricity. Consumption jumped 80 percent in the 10 years to 2013, more than 8 times the percentage growth rate over that same period for the region’s generating capacity, according to several government data that I have seen. Most African countries have suffered from outages for years as more than half of supply comes from hydroelectric plants that are unreliable during dry season and subsidized electricity prices discourage constructing new plants. Rising temperatures are driving higher air-conditioning use. The power crisis is going to be costly and it will affect manufacturing and services, so there will be implications on production. Investors may scale back or delay investments according to the expert. With peak power demand forecast to grow about 20 percent annually on average until 2025, the continent will need more than 200,000 megawatts of additional capacity by 2025.

Contador Harrison