According to the African Development Bank, more than 640 million people in Sub Saharan Africa have limited or no access to reliable, affordable energy and that’s not just a fetter on the continent’s economic development but a block too on the success of initiatives over recent years to improve public services: air conditioning units are just so much scrap metal if there isn’t anything to plug them into, and even the most rudimentary operating theatres, schools, and office buildings need lights. So those 640 Million people, 43% of the continent’s population, are becoming a priority in more ways than one and to its great credit, Africa is rising to the challenge like never before.
Not least because there is now a real recognition that the infrastructure required to deliver power to under or non-resourced areas can be a real game-changer in itself: the sheer scale of the networks and facilities required to meet the needs of 640 Million people (ten times the population of the United Kingdom) will call for an unprecedented scale of investment at all levels. Just remember what New Deal projects like the Tennessee Valley Program did for recession-hit America and you’ll get some idea of the economic potential a full electrification programme can bring about for Africa.
The Global Wind Energy Council has estimated that the Southern African Development Community (made up of fifteen African States including Botswana, Mozambique, Malawi, and South Africa) has potential by itself to generate 18GW of wind-generated energy by 2030: more than a third of the current power requirements of the region. And hard on the heels of recent horror stories of China’s seeming obsession with disfiguring Kenya’s precious and vulnerable coastline with coal-fired power stations, that point is not without its importance too. A new political will has emerged across Africa, placing a greater emphasis on renewable energy sources as part of its economic renaissance.
The point was made succinctly by South Africa’s Minister of Mineral Resources and Energy, Gwede Mantashe speaking at this year’s Windaba Conference: “Renewable energy must play a significant part in the industrialisation agenda. Climate change rationale aside, wind technologies could create the green economy jobs that are needed: this will boost economic growth and job creation, two priorities across the African region”.
A combination of that sort of resolute determination to meet pressing social needs whilst at the same time embracing environmental challenges sits at the very heart of Sub Saharan Africa’s new economic ambition: emboldened by recent initiatives such as the AfCFTA Trade Treaty, creating the largest Free Trade Area in the World and recognising the fact that aggregate GDP across Africa is expected to reach $2.5 trillion within the next five years, with a growing and increasingly middle-class population looking to buy more and with the means to make their aspirations a reality.
Now that’s something worth plugging into…
The SLC African Fund aims to build on the opportunities offered by sub-Saharan African Markets and deliver long term capital growth as well as income distribution: working to solve social and environmental challenges and at the same time deliver sustainable profits for investors.
Infrastructure Investment has always been a solid and reliable basis for economic growth, and I’m personally very pleased to learn that countries across Sub Saharan Africa are now looking to adopt such projects as a much-needed vehicle for delivering access to affordable energy across the continent; particularly as they will be using renewable environmentally friendly platforms, which have always been a cornerstone of my personal investment philosophy.
Especially within the context of the new AfCFTA Trade Treaty, the potential of these initiatives to deliver explosive growth is almost limitless.
I can’t wait to see what happens next.