How electricity problems are limiting growth in many African countries

A lot of the chatter about Africa’s moment of economic lift-off have revolved around the mobile revolution happening in the region. But true economic transformation, the kind that will lift all boats, will only happen once the continent solves its power problems. The lack of reliable power is causing huge difficulties for entrepreneurs in the region, raising their costs of doing business, and dampening investor confidence.

Despite strong economic growth – the World Bank estimates Sub-saharan Africa’s growth this year to stand at 4.0% – access to electricity remains a struggle. Data by the International Energy Agency’s World Energy Outlook 2014 shows there are 622 million people on the continent without electricity, which is close to half of Africa’s population. While the urban areas have a 68% electrification rate, the numbers for rural parts are just 26%.

Comparing Africa’s power generation rates with the rest of the world, there is a pretty significant gap.

The concern is, as data by the International Energy Statistics points out, the gap between Africa and the rest of the world is widening when it comes to electricity production.

The gap does not exist in production alone. In terms of per capita consumption of power, African countries, with the exception of South Africa, lag behind nations from other regions, such as India.

Ghana has one of the highest rates of electrification in sub-saharan Africa but has in the last year been struggling with ongoing power cuts across the country. Nigeria’s decades-long electricity problems have worsened in recent years. The situation in the country worsened last month due to a severe fuel shortage which saw Africa’s largest economy shut down.