Energy, the way to go in developing Africa

July 27 2016

ALTHOUGH the African continent is well endowed with fossil fuels and renewable resources, these are not consistently distributed, creating windfall profits for some countries and worsening the crisis in others.

Shortcomings in the power sector threaten Africa’s long-term economic growth and competitiveness.

The cost of load shedding to the economy for the continent is equivalent to 2.1 percent of Gross Domestic Product (GDP) on average.

To this effect, over 400,000 brain masterminds from across the world led by the African Development Bank (AfDB) met to discuss on the way forward in ensuring that Africa’s all forms of energy potential was tapped.

The delegates who met at the 51st AfDB annual meetings and the 42nd meetings of the board of governors of the African Development Fund (ADF) focused on the growth path of the Bank and the continent which included Zambia at the Mulungushi International Conference Centre in Lusaka from 23rd-27th May, 2016.

The meetings which Zambia first held in 1973 were under the theme “Energy and Climate Change”, and drew on one of the Bank’s “High 5” priority areas, namely to “Light up and Power Africa”.

It also reflected the Bank’s New Deal on Energy and the key resolutions from the recent UN climate talks (COP21) on global warming.

Participants included heads of State and Government, Governors, Alternate Governors, members of the boards of directors, delegates, business leaders, and representatives of the private sector, civil society organisations, the media, observers, as well as Bank staff.

These meetings focussed on 5 main issues namely the High 5s and these are: light up and power Africa, Feed Africa, Industrialise Africa, Integrate Africa and improve the quality of life of the people of Africa.

On the first day of the meetings, the 2016 African Economic Outlook, a flagship publication produced each year by the Bank in partnership with the OECD Development Centre and the United Nations Development Programme was launched indicating positive growth of the continent.

According to its prudent forecast, the continent’s average growth was expected at 3.7 percent in 2016 and pick up to 4.5 percent in 2017, provided the world economy strengthened and commodity prices gradually recovered.

AfDB acting director, development research department Abebe Shimeles said Africa’s economic growth was expected to remain moderate and rebound in 2017 registering growth of 4.5 percent.

Mr Shimeles said African countries had shown remarkable resilience in the face of global economic adversity.

And Mr Shimeles said the oil prices on the continent were expected to recover in 2017 but at a slower rate.

On the same day, AfDB president Dr. Akinwumi Adesina and John Kufuor, former President of Ghana and co-chair of the Global Panel on Agriculture and Food Systems for Nutrition, outlined their intention to create the African Leaders for Nutrition (ALN).

The ALN aims at championing and increasing investment in nutrition across the continent.

Mr Annan, Chair of the Kofi Annan Foundation, and Bill Gates, co-chair of the Bill & Melinda Gates Foundation, applauded the initiative and joined the call for increased nutrition investments across Africa.

AfDB director of the Agriculture and Agro-Industry Department, Chiji Ojukwu also unveiled an ambitious seven-point plan to transform the agriculture sector and empower small-scale farmers and youths.

He said the goal was to ramp up productivity and investment in hard and soft infrastructure.

On the second day which was also the official opening of the meetings, AfDB launched a programme for Africa to close the energy finance gap of US$55 billion annually in the sub-Saharan region.
The programme dubbed "The New Deal on Energy for Africa and the Transformative Partnership on Energy for Africa" would act as a central coordination point for all the ongoing initiatives which were not fully aligned with each other.

The financing goal is to add 160 Gigawatt (GW) of new generation capacity through the grid and to deliver 130 million new on-grid and 75 million off-grid connections.

According to recent trends, over 60 percent of sub-Saharan Africans will still lack access to electricity by 2020.

Africa has an average electrification rate of 24 percent while the rate in the rest of the developing world lies closer to 40 percent.

Even in the areas covered by the electrical grid, power is often unreliable.

Among the sessions held on the second day of the meetings were: The Road to Agricultural Transformation in Africa and Jobs for African Youth.

In his presentation on Tuesday, at a session on Jobs for African Youth, Dr. Adesina underscored the need to invest in skills development to facilitate job creation.

The Bank has taken bold steps to turn Africa's phenomenal youth bulge into an economic dividend by developing a strategy that would create 25 million jobs for youth on the continent and equip an additional 50 million in the next decade.

President Edgar Lungu who officiated at the meetings named the principles as raising aspirations to solve Africa’s energy challenges establishing a transformative partnership on energy for Africa.

The Head of State added that mobilising domestic and international capital for innovative financing in Africa’s energy sector, supporting African governments in strengthening energy policy, regulations and sector governance and increasing the African development bank’s investment in energy and climate financing.

“Clearly, these objectives will enable us to take stock of the current state of Africa’s energy and critically examine the energy policies being pursued by our countries,” he said.

The President also participated at the African leaders roundtable discussions on energy and climate change.

During the financial presentation, AfDB vice-president for Finance, Charles Boamah, and Treasurer, Hassatou N'Sele, underscored the Bank's strong financial standing and Africa's resilience at a time when frontline global economies were struggling.

In a session on "Africa's Energy: What's the New Deal?", influential world leaders and senior business executives endorsed President Dr. Adesina's "New Deal on Energy", a vehicle through which the AfDB will invest in delivering electricity for all Africans, by 2025.

Minister of energy and water development, Dora Siliya also present at the meetings said Government would in the next fortnight meet the AfDB resident representative Damoni Kitabire to discuss modalities of supporting local entrepreneurs seeking to develop renewable energy projects.

Ms Siliya said Government was keen on working with the AfDB to empower local entrepreneurs of small and medium enterprises with the capacity to explore avenues of how the power deficit that hit the country could generate renewable energy.

The Bank and African Civil Society Organisations (CSOs) made a commitment to work together to achieve the High 5s.

Dr Adesina said "The aim of this year's (CSO) Forum is to meet these ambitious development plans by finding a new way to work and coordinate with civil society."

AfDB further launched a programme for women in Africa to mobilise funding of up to US$300 million finance in addressing the financing gap.

The “Affirmative Finance Action for Women in Africa (AFAWA)” would comprise four components with the AfDB expected to provide part of the financing which would in turn catalyse additional funding from other investors.

Zambia Development Agency (ZDA) also on the last day of the conference help an investment forum which saw participants from the energy sector both local and foreign sharing ideas on the panel.

At the forum, minister of commerce, trade and industry Margaret Mwanakatwe urged both local and foreign investors to take advantage of Zambia's liberalised economy by investing in the much needed energy sector among others.
She said Zambia's liberalised economy presented a stable investment climate, thereby making it a new frontier for investments not only in Africa but in the World at large.

She was speaking in a speech read by her deputy Raymond Mpundu at the Zambia investment forum on the sidelines of the African Development Bank (AfDB) annual meetings in Lusaka.

"I wish to urge you all to take advantage of Zambia's favourable investment opportunities in sectors such as mining, agriculture and ICT among others," she said.
She said investing in the energy was critical because electricity was the key driver for all sectors.

Building on momentum of the 2016 Annual Meetings, the implementation of the Bank's High 5 agenda would be seen in the months to come as countries would see the benefits.

Brain geniuses who attended the meetings included, former Germany president Horst Koehler Zambia’s Finance Minister and chairperson of the AfDB boards of Governors Alexander Chikwanda.

Others were President of the Republic of Chad and Chairperson of the African Union Mr Idriss Deby Itno, Rwandan president Paul Kageme and acting secretary general of the African Development Bank Mr Ossey-Olivier Litumba Pinzi.

All these are expected to meet again from May 22-26, 2017, in Ahmedabad, India where the next conference would take place to discuss progress made over the issues discussed in Lusaka.
It is indeed Africa’s hope that the measures and strategies discussed at the meetings would yield positive results.