It is my pleasure to join you here today to discuss the importance of utilities in our continent. The proposed title of this keynote, “Improving the well-being of Africans from Durban to Dar es Salaam to Dakar”, resonated deeply with me because it simply encapsulates what The Rockefeller Foundation’s mission is—to improve the well-being of humanity everywhere. To achieve this mission, the main pillars of our strategy are: Promoting Inclusive Economies and Building Resilience.
To illustrate the strong linkage between broad and reliable provision of utilities and these two goals, let me start by drawing on your imagination. This is about your rural setting and seeing the fruit or vegetable farmer who loses about 50 percent of his/her production due to lack of access to storage solutions. He/she gains access to electricity and can now acquire small cooling storage technologies that allow her to significantly reduce the losses and increase his/her income. He/she can now invest more in education, health, etc. for his/her family and spend in the community.
Research shows that growth in agriculture has high incidence on poverty reduction. These two farmers can now improve their yields and grow their income. Consequently, they will have better nutrition where they grow food for subsistence; they will make a greater financial investment in education, health and the general well-being of their family, and also their community.
This is important, especially when we recall that 80 percent of Africa’s economy relies on agriculture. You can imagine, if the lives of farmers were so greatly improved, how it can impact yields and how that can translate into greater economic growth.
That is just an example.
Ladies and gentlemen,
In the developing world, a single health emergency can deal a catastrophic blow to the long-term prospects of a poor family. Dreams and ambitions are already limited by the harsh reality of scarce resources such as clean water, sanitation, and energy.
Any sudden disease, especially if it affects the breadwinner, has the potential to stifle productivity, and add to the struggle households already face as they try to meet their most basic needs. These needs are compromised when family income suddenly has to be channeled towards medical payments.
Open access to reliable, affordable electricity, or clean water and sanitation services, can make the difference between whether one lives or dies. Having these utilities makes the difference between a society that is marked by prosperity and expanding opportunity, and one where people struggle with poverty and vulnerability.
In an ideal world where we all had the utilities needed for quality of life, we would be able to meet our development targets very easily. However, this is not the case.
Clean water supply in Africa has been slow, if not stagnant, especially with our current population growth—it is projected that by 2050, 75 percent of the world’s population will be living in cities. This means that at current investment rates SDG targets for water supply in most urban areas are likely to be missed, and that the number of un-served households in urban areas, who are likely to be poorest and most vulnerable, is increasing.
According to the World Bank, there are 1.2 billion people without reliable power sources globally, most of them concentrated in Africa and Asia. This translates into 600 million people—70 percent of the population of sub-Saharan Africa—without electricity. There is also a heavy reliance on wood or other biomass for cooking and heating, which is a cause of indoor and outdoor air pollution attributable for millions of deaths each year. There are numerous and evident benefits to having regular, reliable access to electricity, similar to the cases I presented when I started.
Access to affordable, reliable and sustainable energy is vital to ending extreme poverty and promoting shared prosperity. Modern energy services can significantly improve the quality of life for millions around the world and is key to promoting economic development.
In the 21st century, we know that with power comes progress. It opens up opportunities for economic development in rural areas—creating more jobs and new industries—and improving access to health and education. Children’s interest and performance in school improve, households have fewer respiratory ailments, reduced exposure to noxious fumes, and household accidents.Women feel a greater sense of safety and mobility, especially at night.
Electricity can increase household per capita income by 39 percent. Businesses are able to operate at higher levels of productivity. Farmers can run irrigation systems and processing machines that improve their yields and subsequently their income. Electricity has less impact on the environment than dirty diesel fuel.
Small enterprises, such as carpenters or agri-businesses, that need electricity to operate and grow, and will pay for reliable electricity, will in turn contribute to overall economic growth and empowerment.
In our quest for the provision of reliable utilities in Africa, we will need to apply innovative approaches and partnerships. For example, last month the Foundation launched Smart Power for Rural Development, a $75 million initiative which aims to expand rural electrification and catalyze long-term economic growth for some of the most vulnerable populations in India. Together with local and national NGOs, industry leaders, and government actors, Smart Power is pursuing a solution that would promote decentralized, renewable electricity mini-grids—installations that generate and distribute electricity that can serve thousands of households.
Smart power has an initial goal of lighting 1,000 villages, and improving the lives of one million people, in three years. 1,000 villages is only the beginning, because ultimately, we want to prove that this model is viable not only in India, but in regions around the world where energy poverty persists, thus establishing new norms for power generation and management, unleashing greater opportunities for people.
Having reliable utility supply also helps to build resilience. As I mentioned earlier, by 2050 two-thirds of the world will be in urban centers, and with such rates, cities need to look closely at how they can survive and thrive against the continuing population influx.
To help cities plan for sufficient utility systems, in 2013 we launched the 100 Resilient Cities Challenge to catalyze the marketplace and provide a distribution channel for resilience innovations in products and services, technology and financing.
So far the initiative has 67 member cities, who stand to gain access to a platform of services leveraging resources significantly beyond our $100 million to support the implementation of their resilience strategies, which include data solutions to inform technology, land use planning, infrastructure design among other benefits.
Ladies and gentlemen,
Innovative partnerships can help increase coverage of water, electricity and telecommunications services by providing utilities with technical options for increasing coverage, methodologies for liaising with poor communities to develop demand-responsive infrastructure services in these areas, and methodologies for managing and monitoring service expansion programs.
Electrification needs to form a key part of our governments’ economic development agenda, through greater investment in telecommunications companies that need electricity to run their mobile phone towers and are currently relying on expensive and environmentally polluting diesel.
Governments have a key role in aligning their policies to build an enabling regulatory environment to support the creation of markets for mini-grids and opportunities for interactivity between mini-grids and the national grid.
We will need to couple Africa’s ICT [information communications technology] growth with new alternative sources of energy, including taking advantage of the African sun through greater investment in solar technologies, affordable smart meters, and more efficient battery storage. We need to be open to off-grid solutions and decrease our high dependence on fossil fuels, which makes it expensive to generate and provide electricity.
Africa is also experiencing a skills gap when it comes to exploiting opportunities in solar power and clean/wind energy, therefore lacking a good balance of electricity and energy sources.
Friends, we will need to make the requisite investment to change this situation; to spur a skills revolution, to have more solar and wind power in use, and light up more of our villages to empower more businesses, create stronger economic growth and inclusion.
Let me emphasize that we need to consider how we can support public private partnerships to and ensure African citizens—businesses as well as individuals—can access reliable, affordable and high quality utility services. Those will serve to create greater impact of all our development initiatives.
Organizations similar to ours, with risk capital for investment, can support and de-risk innovative ideas and partnerships to catalyze greater commitment by other players.
As we watch Africa rising, there is a growing global movement of investors interested in what Africa has to offer in multiple sectors; a rise of entrepreneurs and companies who are looking for new opportunities and new markets, impact investors who want investments that generate social and environmental impact, as well as a financial return.
One of the Foundation’s key initiatives in Africa is Digital Jobs Africa, a seven-year, $100 million effort to improve a million lives by connecting high-potential but disadvantaged youth in Africa to sustainable digital employment opportunities and skills training, in Kenya, Morocco, Egypt, South Africa, Nigeria, and Ghana. Having more liberalized Internet connectivity in Africa, powered by diversified energy sources, which would also power computers to enable digital skills and tasks, will enable us make a great impact, and faster.
One practice we are advocating for through Digital Jobs Africa is impact sourcing, which is a business process outsourcing (BPO) model that provides quality and cost at parity with traditional BPO services, but with optimized enhancements such as:
- A qualified trained, untapped talent pool with skillsets aligned to match client needs
- Lower attrition rates and higher employee motivation and engagement
- Opportunities to fulfill corporate social responsibility and diversity objectives while operating within a traditional BPO framework
- Helps corporations tap into identified geographic expansion targets in new global markets
Impact sourcing enables corporates to have those benefits, and through their CSR, they create jobs for the benefit of Africa’s growing youth population, many of them with high potential but with no job prospects. Many companies represented here are also outsourcers of services, or you have customer services as your organizations provide utility services; I would urge you to adopt the practice of impact sourcing as one way of having a triple bottom line—for social, financial and environmental impact.
Initiatives such as Digital Jobs Africa are riding on Africa’s ICT boom, and the dramatic proliferation of our mobile usage opens up countless opportunities for innovation, but we need to ensure that the underlying system needed to power and run these networks remain stable.
Finally ladies and gentlemen,
Now is the time for a utility revolution in Africa. Significant investments are required to improve their provision if the UN Sustainable Development Goals are to be met.
We need clear roles and responsibilities for utility provision, starting off with our policy makers who are responsible for the necessary budgetary allocation and systemic enablement. There is an urgent need to increase access to utilities by developing clear and realistic expansion programs with committed funding streams, and targeted and inclusive investments.
As we flow in the current of Africa rising, and as the world comes to us to seek investment opportunities and even in emerging sectors, let us cater for the role utilities play in the totality of our citizens’ well-being, and propose how all of Africa can be transformed holistically with the requisite investments.