If Africa is to make sustained progress in meeting development goals, it must address energy poverty. To do so in the current environment will require deft macroeconomic management - says Antoinette M. Sayeh, director of the African Department of the IMF From an article published in the Financial TImes (London) by Antoinette Sayeh, director of the African Department of the International Monetary Fund on October 31 2008
"If Africa is to make sustained progress in meeting development goals, it must address energy poverty. To do so in the current environment will require deft macroeconomic management.
Africa’s growth boom since about the mid-1990s has intensified and underscored energy poverty. The continent’s diverse and often abundant energy sources are underdeveloped and poorly-utilised. Increasingly, energy bottlenecks are an obstacle for a continuation of the otherwise encouraging growth story. The scale of needed investments presents the continent with tremendous challenges, which have become even larger following the oil and food price shocks, and the financial market turmoil.
To illustrate, electricity output in sub-Saharan Africa (excluding South Africa) has been stagnant for years and, as a result, the entire region, with close to 700m people, generates only as much power as Argentina, with 40m. Only about a quarter of the sub-Saharan African population has access to electricity, power plants are not in good shape, and average charges are high.
The IMF’s focus is on the macroeconomic aspects of this issue and these have now been magnified by oil, food, and financial market turbulence. While the rise in energy prices until earlier this year has presented opportunities for oil exporters, for oil importers it represents an important challenge to foster growth and reduce poverty. According to estimates in our Regional Economic Outlook for sub-Saharan Africa, 17 countries have been hard hit by the fuel and oil price shock. However, the recent decline in oil prices, if sustained, could provide some relief."
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