Access to stable and affordable electricity will be Africa’s magic wand for development and decent living

To expand intra-continental trade and boost global competitiveness at all levels, in 2012 African countries made the decision to establish a Continental Free Trade Area (CFTA) to bring together 54 African nations to join common forces.

This decision certainly has a leg to stand on, considering the rapid urbanization that many African nations are experiencing. According an Economic report on urbanization and industrialization made by UN Economic Commission for Africa, by 2035 the continent’s urban population is expected to reach nearly 50%, which is going to present considerable demands for employment and additional infrastructure. The pace of urbanization in many cases exceeds and moves far faster than the current pace of economic and industrial growth.

Thus, African cities very often face low productivity and high rates of unemployment. Unless resolved, these impediments will undermine Africa’s potential for structural transformation. African countries need to focus on structural transformation by harnessing the rapid urban transition to promote economic diversification, with a special focus on industrialization that will create jobs, enhance access to basic services and reduce inequality and poverty.

As middle class and urban consumption are on the rise, demand for goods and services are also increasing due to changing consumption patterns, which in turn creates opportunities for industrialization.

According to the Plan of Action for the Accelerated Industrial Development of Africa (AIDA) supported by the African Union, African Development Bank and other organizations, successful industrialization depends on four pillars:

  • Infrastructure, energy and transportation development
  • Research development
  • Adaptation of new technologies
  • Promotion of small and medium businesses

The energy sector is especially important in shaping industrial development, as the successful operation of nearly all economic spheres is driven by unhindered access to stable electricity.

The countries of Sub-Saharan Africa have sustained strong economic growth over the past 15 years, except for recent years which have been negatively affected by global stagnation. Nevertheless, despite the economic turmoil of recent years, energy demand has been resilient throughout the recession, driven primarily by rapidly growing consumption in developing sectors.

However, in order to maintain the existing annual growth rate of average 5-6%, African countries need to ensure that power infrastructure is developed at a far greater rate.

Access to stable and affordable electricity has become an indispensable precondition for securing sustainable development and decent living standards. The energy industry is undoubtedly an engine of growth, as its products serve as inputs into just about every good and service imaginable.

Today the development of the energy sector may facilitate creation of new jobs and trigger process of industrialization.

For these reasons, the direct interdependence of the industrial sector on energy is of major concern for developing African countries, and is shaping current and future energy and industrial development. The size and structure of industry determines the amount and type of energy needed to secure economic development. Similarly, the affordability and availability of supplied electricity will have a direct impact on the attraction of new industry and the growth of existing industry.

According to the World Economic Forum report on energy growth, relatively lower and stable energy prices help stimulate the economy. Firstly, lower energy prices reduce expenses for consumers and businesses, increasing disposable income that can be spent in other ways. Secondly, lower energy prices reduce input costs for nearly all goods and services in the economy, thus making them more affordable and competitive on a global market.

Sustainable development needs the same type of energy development.

Today it is important to address two of Sustainable Development Goals at the same time – to achieve a low carbon energy mix and guarantee affordable energy for social and economic development. This goal is difficult, but is not unsurmountable.

African counties can deviate from traditional sources of energy to gradually include nuclear and renewable energy sources to eliminate power shortages, bring electricity and development opportunities to rural villages that have never enjoyed those benefits, boost industrial growth, create entrepreneurs, and support increased prosperity across the continent.

As for climate change benefits, both nuclear and renewable energy sources are considered important pillars to guarantee the world’s growing energy needs while reducing CO2 emissions and the average temperature.

In this case nuclear energy coupled with hydropower and renewables can become the foundation of the future clean and low-carbon global energy mix. As for today, nuclear power sources have proven their technological advantages and readiness for immediate deployment to guarantee sustainable and affordable baseload energy supply.

Solar, wind, hydro and nuclear power can work in harmony to become the base for the world’s future carbon-free energy mix.

Advanced and innovative technologies call for new materials and skills that can be applied in other sectors of the economy and bring additional benefits. Global experience has demonstrated that the development of nuclear power has contributed to substantial technical progress in numerous social and economic fields.

The development of nuclear also encourages the creation of high-tech sectors in the economy. It is capable of, improving the quality of education, creating new highly-paid jobs and the emergence of new specialists.

A nuclear science and technology cluster may include the manufacture of special-purpose and civil products, such as equipment for the transport industry as well as the fuel and energy industry, systems for monitoring, diagnostics and control, metallurgy products, control and measuring devices and medical equipment.

Moreover, the cluster ensures the growth of the added value by increasing the competitiveness of manufactured products on the domestic and foreign markets. Experience has also shown that marketing and engineering infrastructure facilities as well as small enterprises operating in related fields begin to emerge near the “core” of the cluster after its creation. In symbiosis with the “core”, they increase the investment attractiveness of the region and of the entire country.

The integration of new enterprises into a single complex will enable national players to strengthen their positions in the domestic market and to increase their competitiveness on a global level.