Yemisi Izuora
African Development Bank (AfDB) has said that about 620 million inhabitants of Africa are living without electricity and estimated that as a result between $30 and $40 billion may have been incurred as costs annually basis.
The bank in its Financial Presentation and Operational Analysis for 2015 said a total of $126 million had been offered as special relief for humanitarian causes including assistance to Chibok Girls School in Nigeria, emergency assistance to control Ebola in DRC, Emergency aid to control the plague in Madagascar and assistance to the victims of drought in Somalia.
The presentation, which was jointly made by the AfDB Vice President, Finance, Charles Boamah, and Officer-in-Charge, Treasury Department of the bank, Hassatou N’sele, noted that the bank was making interventions in some of the African countries with a view to improving power sector regulatory environment as well as expand access to electricity for the local population, particularly rural dwellers.
Essentially, AfDB said, $1.9 billion energy projects were approved in 2014 with the commitment to providing reliable and affordable energy supply.
According to the bank, “half of Africa’s infrastructure needs are in electric power. Majority of countries are facing regular power outages at an economic cost of one per cent to two per cent of GDP per annum.”
The bank pointed out that its infrastructure development had benefitted from huge investments to the tune of $28 billion in the past decade compared to $18 billion invested in the sector in four decades; that is, between1964 and 2004.
Analysis has shown that despite being endowed with natural resources with nearly 30 per cent of the world’s mineral reserves in Africa, 95 per cent of its untapped hydropower; 10 per cent of oil and eight per cent of gas, the continent, the AfDB report stated, is still beset by acute impediments to growth, including high poverty rates, with over 400 million of its people living on less than $1.25 per day.
Besides, Africa, with 54 countries and micro markets, is so fragmented that the idea of developing economies of scale in most of these countries seems far-fetched. Thus, trade among and between African countries is currently estimated at 12 per cent.
Governance has also been considered to be a major development issue in Africa with its attendant negative impacts on the cost of doing business in critical ways. However, in spite of these challenges, many African countries have been on the growth path in the past decade with West and East Africa registering the highest growth rates at 6 and 7.1 per cent, respectively, in 2014.
“The factors driving such growth included increased investment in infrastructure, a growing private sector, and greater agricultural and mining production,” the bank pointed in the financial presentation.
AfDB also pointed out that Africa’s Diaspora remittances, which reached $67 billion in 2014, surpassing Official Development Assistance (ODA) and Foreign Direct Investment (FDI), both of which have been the dominant sources of investment finance to Africa in the past.