Funsho Balogun
At the ongoing World Economic Forum in Davos, Switzerland, Akinwumi Adesina, President of the African Development Bank, AfDB has highlighted the role and target of the institution towards promoting economic advancement across the continent. Akinwumi stated this today at the forum that there will be a new deal on energy for Africa with a goal of ensuring that the continent boasts universal access to electricity.
The AfDB president who was Nigeria’s Minister for Agriculture in the last administration pointed out that the mission is quite achievable with the support and commitment of other stakeholders and not by the sole effort of the AfDB. Contributors towards the realization of the feat would include the AfDB, World Bank, United States government, African countries and the private sector. And the big task is to put in place 164 gigawatts of new grid systems to enable the connection of 135 million people to the grid with an additional off grid system connection for 75 million people.
‘’On the part of the AfDB, we will put in $12 billion dollars over five years, part of which would be used to support the efforts to reform utilities in the countries and a lot will also be put in to derisk the energy banks,” Akinwumi stated, adding that this could be in terms of partial risk guarantees or credit enhancement schemes that would bring in the private sector. He stressed the importance of supporting power and gas projects agreements. ‘’At the end of the day, without having those things, nothing works,” Akinwumi said.
The AfDB President, who believes miraculous things can be achieved in Africa’s power sector says the AfDB, World Bank and other stakeholders would be joining forces to push for fundamental reforms of the energy sector. ‘’We have a huge amount of potential but we have to take it as a business, a cost reflective tariff has to be there for investors to put in money and we are going to be doing this as part of the overall improvement of the governance structure of the energy sector in Africa,” he said.
Akinwumi noted that although the AfDB had actually been doing a lot in the energy sector, it is set to up its game by doing things on a larger scale and faster. According to him, it is unacceptable that Africa has been unable to compete with the rest of the world through adding value and industrialization simply because it has failed to invest appropriately into the provision of adequate power. ‘’ We are talking here at the World Economic Forum about the fourth industrial revolution, whether it is first, third second or fiftieth industrial revolution, the condition is the same; without electricity, you have nothing,” he said.
At the forum, Akinwumi asked all the partners involved to work with the African governments to leverage their domestic resources, since it will require an investment of about $40 -70 billion dollars yearly. Although it is a staggering amount, the AfDB President says it can be raised, through the commitment of African countries concerned.
”If the countries simply increase the share of their GDP that is devoted to the energy sector from the current 0.3 percent to 3.4 percent, that will unlock $50 billion dollars a year, enough to get things done, ” Akinwumi said.