One of the less-discussed reasons why the agricultural and agribusiness sector in Sub-Saharan Africa lags behind other developing regions of the world is the lack of reliable access to electricity. According to estimates of the International Energy Agency (IEA), nearly 760 million people worldwide lacked such access in 2022, and nearly 80 percent of them, or 600 million reside in Sub-Saharan Africa. In contrast, almost 1 billion people have gained access to electricity in developing Asia since 2010, with 97% of the region having access in 2022 compared with 79% in 2010.
Most Americans take access to electricity for granted. However, power outages due to storms that persist past a few hours can have devastating effects on people’s lives and their livelihood. During the severe cold snap in the winter of 2021 that hit the state of Texas for nine days, as many as 10 million people lost power at the peak outage. The state’s department of health services reported at least 200 people lost their lives as a result of the extreme weather and the subsequent loss of power, and lost economic activity during the period was valued at around $130 billion in Texas alone.
Broad access to electrical power in the United States was made possible by one of the many programs geared to supporting rural areas that was part of President Franklin D. Roosevelt’s ‘New Deal’ during his first term in office. The Rural Electrification program was first established under an Executive Order by FDR in 1935, and enacted into law by Congress in 1936. In 1934, only 11 percent of American farm households had access to electricity. The program commissioned companies to lay power lines in the countryside, and offered low-interest loans to rural households averaging about $950, to get the power to their farmsteads. By the time the program was wound down in 1950, more than 90 percent of rural U.S. households had electricity.
In Sub-Saharan Africa, smallholder farming households would greatly benefit from the expansion of availability of electricity. On the farmstead, such access would allow them to undertake certain household tasks at night, such as young students doing their homework, freeing up daytime hours for tasks related to raising crops and livestock. If they can afford it, they can install electric appliances such as refrigerators and stoves, allowing them to eat better diets and avoid the indoor pollution caused by cookfires. According to the IEA, 500,000 African women die prematurely each year from prolonged exposure to smoke from cooking with firewood or charcoal.
Without reliable access to electricity, companies processing raw agricultural commodities into food products are loathe to locate facilities in rural areas, so those commodities are typically shipped into urban areas or even overseas, imposing greater transportation basis costs on producers. Other small manufacturing firms producing agricultural inputs or household goods would face similar obstacles, leading to a dearth of alternative employment opportunities for members of farm households.
As of 2023, the publication Africa Business reported that farmers in Africa produce 60 percent of the global supply of cashews, an increasingly popular food due to its relatively high protein content, but only has the capacity to process ten percent of the raw cashews produced within the region. The remainder is exported in raw form to other countries such as India and Vietnam, leaving perhaps billions of dollars of potential value added revenue to be captured by other countries. More reliable access to electricity would be an important step to encouraging more processing capacity across the region.
In 2013, the U.S. government established the Power Africa initiative to help the people of Sub-Saharan Africa end ‘energy poverty’ for millions by 2030. Over the last decade, the U.S. government has partnered with private companies to leverage $1.05 billion in financing for power projects, including both unifying 12 national power grids in West African countries and a substantial investment ($362 million) in off-grid energy investments. About 33 million people gained access to electricity for the first time under this initiative.
One of the Power Africa projects that involved agriculture provided resources to Senegal’s Delegation for Rapid Entrepreneurship of Youth and Women, which piloted solar irrigation and agri-processing in 53 off-grid villages in the commune of Medina Cherif, where women’s farmers’ groups will use the new equipment to boost crop yields and improve livelihoods.
Earlier this year, the World Bank and African Development Bank jointly announced a new ambitious effort to connect an additional 300 million people in Africa to electricity by 2030, to be known as Mission 300. Besides the two banks investing additional capital, this effort involves working with national governments in the continent to implement regulatory changes that are aimed at making the environment more friendly to private investments.
With these initiatives in place, expanded access to electricity should be taking place over the next several years, which should help improve the agri-food sector in Africa, which currently employs about 42 percent of the entire labor force in the continent.
