Lack of access to reliable electricity is killing jobs and growth in sub-Sharan Africa, according to a new report.
The African Economic Outlook is published each year by the African Development Bank, the region’s leading development finance organisation. This year’s Outlook finds that poor electricity access is cited by African businesses as one of the “major constraints” holding them back.
Currently, two thirds of people in Africa – 645 million – still don’t have electricity access. Around 50% of companies and entrepreneurs in the region also lack access to electricity, while those that do are burdened with high costs and regular power failures.
The report finds that countries in Sub-Saharan Africa suffer 8.5 month blackouts a month on average, with each one lasting 4 hours each. Half of all firms in the region own or share a diesel back-up generator because the local power supply is so unreliable, hugely increasing production costs and preventing them expanding.
In turn the inability of these businesses to create the jobs that Africa needs is undermining political stability. According to the report, public dissatisfaction with the state of the economy has “taken the lead role” in motivating a wave of recent protests.
This is not a problem the West can ignore. Sub-Saharan Africa’s population is growing fast, with youth unemployment currently running up 40% in some countries. Unless they can deliver millions of jobs each year, this demographic time bomb is likely to explode, with serious consequences for richer countries.