The economic growth of sub-Saharan Africa has been meticulously observed and analyzed on a global stage for decades. Over the years, economists and development experts have discussed the various ways to support and uplift the region’s economies at length. Yet, these discussions occurred primarily during 25 years of steady economic growth in sub-Saharan Africa.
Now, with the global coronavirus pandemic and oil crisis that are expected to push SSA into a recession, the steps taken to stimulate the region’s economies are even more critical than they were only six months ago. The pressure on sub-Saharan Africa has drastically increased. An area that has focused on growth alone must now face a daunting economic recovery.
To face such a challenge, SSA will need to use the limited resources available as efficiently as possible. This need for efficiency is what has electrification on development experts’ minds as a critical tactic for sub-Saharan Africa to pull itself back up economically. In this post, we will explore why the electrification of SSA is more crucial than ever before.
Unreliable Electricity’s Impact on Sub-Saharan Africa
Despite progress in the electrification of SSA, more than 600 million people are still without electricity, and the available electricity is costly and unreliable. According to Energy for Growth, an organization focused on energy poverty, African companies average being without power for 50 hours per month. Such outages have cost companies as much as 31% in their sales.
The lack of reliability at this capacity increases business costs and creates uncertainty surrounding overhead expenses for business owners; this makes being a business owner less accessible and desirable. In turn, it affects how many jobs business owners can provide. A World Bank report on Africa as a whole claimed that power outages in the continent limited employment opportunities in highly skilled jobs by 35-41% and limited self-employment by 32-47%. Additionally, research has shown that costly and unreliable energy is one of the primary limitations for job creation for almost every country in Africa.
Electrification for Industrialization
Although electrification can create job opportunities that are crucial for economic recovery, this is due primarily to electrification’s role in industrialization. Industrial processes require human labor, but, more importantly, industrial processes require large amounts of energy to function.
Reliable and cost-effective energy for manufacturers would positively impact SSA’s economy because it would allow for increased production volumes, profit margins, and job availability. Additionally, industrialization can bring an increase in self-reliance for economies and present opportunities for international trade—both of which are positive for economic recovery. Beyond this, manufacturing can also help a nation accumulate capital, which can be re-invested back into long-term economic growth tactics.
Electrification for Healthcare
Electrification is necessary to stimulate job creation and capital accumulation for economies in SSA, but without a healthy population of citizens, electrification can only go so far in aiding economic recovery. In order to combat the coronavirus pandemic, healthcare facilities in SSA need electricity. Only about 60% of healthcare facilities in the region have electricity. Out of the minority of facilities with electricity, only 34% of hospitals and 28% of other healthcare facilities have reliable electricity. Even if a vaccine for the virus is just around the corner, healthcare facilities without reliable electricity will not be able to keep vaccines cold—which will mean coronavirus can threaten the lives of populations in SSA until the problem is solved.
Takeaways of Reliable Electricity Access for Economic Recovery
Sub-Saharan Africa faces an upward battle to recover from the economic impact that coronavirus has had on the region. Experts have spoken out on the various tactics SSA could use to grow economically for years now, but the recession has increased the pressure to change quickly. When seeking solutions to economic recovery, the increase in access and reliability of electricity presents multi-prong benefits that make the tactic a potentially powerful use of limited resources.
At GeoPoll, we specialize in remote data collection in areas of the world that are hard to reach through traditional methods. For this reason, we conduct monitoring and evaluation campaigns for a variety of development organizations. Projects like these track progress of development initiatives, like the expansion of electricity access and reliability. To learn more about our research capabilities, contact us today.