Electricity: Powering the Vision of AfCFTA
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By Adebayo Abubakar
The significance of the Micro, Small and Medium Scale Enterprises, as the driver of any given national economy can never be overemphasised. This is because they serve as a sponge to mop up millions of able-bodied men and women, who are willing to work but unable to secure White or Blue-Collar jobs in offices whether in the public or private sector. They out-number the large-scale industries, some of which are multinationals, in terms of how many they are, and the number of people who manage to escape being in the labour market through them. This is talking about the informal sector, where artisans, petty traders, sole proprietors and many other business concerns that do not have large capital, and are small in net worth, are very common features.
In some instances, one finds the partnership type of businesses, and even private limited liability companies, in their midst. When a business concern is micro in nature, the staff strength is usually, between one and nine employees, while small usually comprises between 10 and 49 workers, and medium would always have between 50 and about 200 workers.
Dr. Sidi O. Tah, Director General, Arab Bank for the Economic Development of Africa (BADEA), in an article titled “Promoting Micro, Small and Medium Enterprises (MSMEs) in Africa: “A Holistic Approach Is a Must!”, argued that, globally, micro, small and medium enterprises (MSMEs) account for about 90 percent of business enterprises and more than 50 percent of employment. He also opines that MSMEs are a vital part of the economic fabric of Africa. But he believes that they account for no less than 70% of the GDP of some countries, such as Ghana.
Credit: Ventureburn
MSMEs, according to Next Generation Africa, form the backbone of Africa’s economies, and are essential to the Continent’s ambition to drive job creation for its young people. MSMEs account for 38% of Africa’s GDP and account for 70% of the region’s employment. What this entails is that, if AfCFTA must stand on a solid footing, the sector expected to drive its vision must be made to stand on a solid footing.
Thus, the importance of MSMEs in this circumstance is not a subject of debate here. The issue is getting this critical sector of the continent’s economic superstructure to function at maximum capacity, to help drive the vision of the African Continental Free Trade Area. One of the most critical infrastructures needed to energise MSMEs is electricity. Many of these categories of businesses depend on one source of power or the other to become operational. Let’s take for instance, operators of hairdressing and barbing salons, furniture makers, panel beaters, pharmaceutical industries, welders, vulcanizers, operators of bakeries, among others, depend on affordable and accessible electricity. Even, electricity is needed to preserve agricultural produce, using refrigerators. But unfortunately, very few African countries have actually been able to meet up with the electricity requirements of this very critical sector of the economy.
After South Africa (with installed capacity of 58,095Mega watts but which has dropped by 8.8% since 2010), the countries with the highest installed capacity are; Nigeria with, 12,522MW (although only around 3,000MW of this is being distributed most days); Ghana with 4,399MW, Ethiopia at 4,244MW, Kenya with 2,819MW, DRC with 2,677MW, Zimbabwe with 2,240MW, Botswana with 920MW and Senegal with 864MW. On the other end of the scale, Chad has 125MW of installed capacity, Rwanda has 218MW, and South Sudan generates 130MW. As a result of the vast disparities between generation capacity across Sub-Saharan Africa, and the largely rural nature of many communities. According to, ESI Africa over 600 million people are without access to energy. Chief among these are South Sudan (5.1% access), Chad (6.4%) and Burundi (6.5%).
Similarly, in North Africa, lack of diversification of energy sources still remains an issue that needs to be addressed, despite the availability of different energy sources. According to a 2018-report by African Energy Commission, AFREC, renewable energies only accounted for 4.6% of the North Africa’s [except Egypt] average electricity production (compared to 25% globally), even though the region has conditions (among the most favourable in the world) for the region. The report went further to say that exploitation of solar energy and a “significant” wind potential along the coasts are some of the advantages of the region. The report, however, identifies strong disparities between the 5 countries studied: Morocco, where almost 20% of electricity production comes from renewable energies, was identified as a standard-bearer for renewable sectors in the region (focusing among other things on thermodynamic solar energy).
The reason, capacity is this abysmally low, relative to the needs ahead, is that, [leaders in] Africa, as indicated above, have shown little or no creativity in the drive towards powering the economy in line with the vision of AfCFTA. I am talking about creativity, in terms of bringing on board, different energy mix. What do I mean? Some African leaders focus more on generating electricity from only hydrological, gas turbine or other outdated sources, rather than going for an energy mix that would include renewable energies like solar, wind, geothermal, bioenergy, and so on and so forth. But the time has come for African leaders to begin to look at generating energy the creative way to bring about the required wattage to “energise” the vision of AfCFTA. This has become more necessary especially now that the UK has cut tariffs on goods imported from Africa, as reported by The Cable, and also, in the aftermath of supply gaps created by the conflict between Ukraine and Russia, in the area of grains.
It would be tantamount to sitting on a keg of gunpowder, if Africa fails to provide the needed quantum of energy [and other infrastructures] that would enable businesses to thrive, such that industries will be able to absorb the rising army of unemployed youths on the continent. Otherwise, by the time the negative effects begin to manifest, it might be too catastrophic, to imagine. The consequences are capable of driving the continent backward by at least 5 decades.
Grethchen Knoth in his 2013 article, titled; “4 Ways Electricity can Jumpstart African Economic Development”, explained that: By 2045, Africa’s youth population is expected to double and exceed that of China and India. So, Africa has an unprecedented opportunity to strengthen its economy and combat poverty”.
African leaders must, therefore, make it a matter of priority to provide energy to power the “midriff” of her economy, such that it makes the achievement of AfCFTA’s aims and objectives much easily achievable.
Adebayo Abubakar is a Nigerian journalist. You can reach him via, marxbayour@gmail.com