Obama puts $7 billion behind increasing electricity access in sub-Saharan Africa

Obama takes the stage in Cape Town.
Obama takes the stage in Cape Town.
Ari Shapiro

Amid all the attention on the health status of former South African President Nelson Mandela, President Obama unveiled a new initiative during his sub-Saharan African tour that will increase access to power in the region.

The President outlined a plan for engaging with Africa on the fronts of trade and democracy. US support for trade comes with a new $7 billion packaged called Power Africa.

The United States will partner with Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania to increase power capacity and bring electricity to at least 20 million new households.

The plan also includes partnerships with Uganda and Mozambique to support the nations’ management of their oil and gas resources.

“Access to electricity is fundamental to opportunity in this age.  It’s the light that children study by; the energy that allows an idea to be transformed into a real business,” said President Obama at the University of Cape Town on Sunday.

“It’s the lifeline for families to meet their most basic needs.  And it’s the connection that’s needed to plug Africa into the grid of the global economy.  You’ve got to have power.”

Electricity is an issue that the World Bank recently took up. An estimated two-thirds of people living in sub-Saharan Africa lack access to electricity. Electricity is an integral part of development says the World Bank. The developing country lender announced its ambitious goal to achieve universal electricity access by 2030. That means connecting 1.2 billion people in less than 20 years.

“The goal in Africa has to be rapid scale up of access to energy. There’s just going to be no way that Africa is going to be able to lift its people out of poverty without access to energy,” World Bank President Jim Kim to Humanosphere in April.

Achieving universal access to electricity in sub-Saharan Africa by 2030 will cost an estimated $300 billion in investments, says the White House. The five year commitment of $7 billion will be amplified by another $9 billion in investments from the private sector. General Electric made a commitment to bring 5,000 megawatts of new and affordable energy to Tanzania and Ghana. Other private sector commitments come from the likes of Symbion Power, Heirs Holdings and more.

Money from the United States will be spent in many different ways, but leans heavily on the side of trade investments and supporting innovation. The US African Development Foundation will launch an Off-Grid Energy Challenge that supports African-owned and operated enterprises with as much as $100,000.

Forbes noted General Electric will be one of the biggest beneficiaries of this plan aimed at energizing the energy poor continent:

The lion’s share of the $7 billion appears to be directed by the U.S. Export-Import Bank, which will “make available $5 billion in support of U.S. exports for the development of power projects.”

Not consulted on the plan was Donald Trump, also quoted in Forbes, who attacked the Power Africa plan perhaps because of Obama’s push for renewable energy. Trump is in a spat with Scotland over wind turbines.

“Every penny of the $7 billion going to Africa as per Obama will be stolen,” Trump tweeted. “Corruption is rampant!”

President Obama’s remarks served as a call to action for African youth. He praised ailing former leader Nelson Mandela discussing the impact of his family’s visit to Robben Island, where Mandela was held for 27 years. Using the example of Mandela, he urged people to take control of their own destinies.

“Ultimately, I believe that Africans should make up their own minds about what serves African interests.  We trust your judgment, the judgment of ordinary people.  We believe that when you control your destiny, if you’ve got a handle on your governments, then governments will promote freedom and opportunity, because that will serve you.”

President Obama and President Zuma of South Africa.
President Obama and President Zuma of South Africa.
Ari Shapiro

The announcement is a part of a broader effort by the president to engage the continent. Experts and critics have pointed out that the US is lagging behind countries like China in terms of investing in and working with African nations. Some have described the trip as a rebuff towards China and an opportunity for the United States to re-engage through big projects like Power Africa. President Obama acknowledged this need in his remarks on Sunday.

“I’m calling for America to up our game when it comes to Africa.  We’re bringing together business leaders from America and Africa to deepen our engagement.  We’re going to launch new trade missions, and promote investment from companies back home,” said Obama.

Obama made a more pointed comment when speaking at a press conference in Johannesburg. There he warned African leaders to be sure that investors have the country’s best interest in mind when doing work. Though he did not specify China, the veiled remarks certainly could be construed to be a jab at the nation’s emerging presence in Africa.

“Make sure it’s a good deal for Africa. Somebody says they want to come build something here, are they hiring African workers? Somebody says that they want to help you develop your natural resources, how much of the money is staying in Africa?” said Obama.

Achieving the vision laid out by President Obama will be challenging, but it will be the countries that will have to ensure that connectivity to electricity can propel development stresses Siddhartha Mitter in the Africa is a Country blog.

“Making sure those new plants become actual development assets—particularly ones for broad-based development—is the hard part. That task will fall, rightly, to the governments of those countries, held accountable by civic and media scrutiny,” writes Mitter.

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Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.