Thank you to everyone who attended Franklin Street’s first policy salon of 2016! We kicked off this year on a positive note and focused our discussion on Sub-Saharan Africa’s past successes and potential for 2016. We chose three particularly exciting opportunity areas: the solar power revolution, tech-enabled development, and the rise of sustainable tourism in the region.
Below are key distillations from the evening’s discussion. We’ve also tacked on a few extra reading recommendations for those interested in exploring these topics further.
Sub-Saharan Africa: Past Successes and Potential for 2016 with the Solar Energy Revolution, Tech-Enabled Development, and Sustainable Tourism
Tech is King, but is IT Enough?
Much of the innovation driving development these days is thanks to a synergistic alignment of new technology finally able to meet customer demand and not-so-new technology whose infrastructure was previously too expensive to expand to every market. Now, like mobile technology did for telecommunications and mobile payments, energy technology is helping an otherwise infrastructure-heavy sector leapfrog those costly hardware installations and micro-deliver alternative energy to individuals, households, and communities.
Yet with such tech-centered (and therefore energy-dependent) development, do these solutions truly extend all the way to that last mile and its bottom billion? What kind of scale can you really achieve with a few LED lights and some cell phone chargers? The answer is, a lot... but maybe it’s not enough.
You Say You Want a (Solar) Revolution
Energy needs are at the core of many challenges and their solutions in Sub-Saharan Africa, and solar energy is poised to help the region skip over fossil fuel-based development with its “quiet solar revolution.” Technological advances in solar power have made extending energy utility to the last mile not only financially feasible but potentially lucrative as social and conventional enterprises, development and commercial banks, and utilities eye the untapped market at the bottom of the pyramid. Private companies are competing to provide low-cost energy to potentially millions of people who currently make up the 70-80% of the world’s poorest who live without electrification or consistent access to electricity for basic necessities like lights and charging sources for cell phones and computers.
Long-Game or Short Gain?
Though the energy buzz in Sub-Saharan Africa is all about renewable and alternative energy, the truth is that most of the region (and the world) is still powered by fossil fuels. The struggle between the ability to develop right now versus long-term environmental concerns heated up our conversation. At the center of the debate is that money from extracted natural resources often does not translate into catalytic investment in local economies. Rather, it tends to favor moneyed investors and elites. Despite the overwhelmingly clear opportunity in the region (and the rest of the developing world), two obstacles that continue to stand in the way of sustainable development are corruption and security. These make sustainably taking advantage of the continent’s abundance of natural resources more precarious.
As long as the potential for substantial profits from oil exploration exceeds the potential from sustainable development, there will be continued threats to the environment and national parks, such as Congo’s Virunga, just as sustainable tourism is taking off as an industry. There is a US$1.1 billion potential for Virunga National Park to be used for hydropower, ecotourism, and sustainable agriculture. But to meet that potential, the country must settle the security, infrastructure, and governance hurdles that keep the park at its current valuation of about US$50 million annually. Most recently, grassroots activism compelled UK oil company SOCO to halt its oil exploration plans in Virunga and relinquish its exploration rights, though it is likely only a matter of time until another company takes its place.
We asked whether there is a way to work with oil companies to determine new technologies that would enable exploration and are less damaging to the environment – that is, the most efficient use of fossil fuel with the least detrimental environmental and social footprint – while collaborating on developing sustainable energy sources and development in the areas around extraction sites. Is there a way to change the calculus so that energy development is not a zero-sum game? It would be necessary for the government to support such a program, establish and enforce a regulatory system to prevent excesses, and create a profit incentive that is aligned with community needs.
It’s Not Always Sunny...
Again, corruption continues to be an obstacle to security, stability, and sustainable economic growth. Our members’ collective experience prompted a lengthy dive into the Rwanda-Singapore comparison that is frequently made. In Rwanda, for example, a zero-tolerance policy for corruption comes with the price of quasi-authoritarian governance “tendencies” that may lead to civil unrest in the future when a political transition is imminent. As the country continues to bill itself as the “Singapore of Africa,” some of the same criticisms that marred Singapore’s own development under authoritarian rule and continue to provoke civic debate among its citizenry also plague Africa’s darling of the development and foreign direct investment communities. Regardless, Rwanda has focused on investments in technology to move ahead of the curve and become one of the continent’s most business-friendly countries. It has an electronic business registration that enables businesses to set up within three days, and the country just announced it’s building the world’s first “drone port” for civilian and commercial use. This will enable the “Land of a Thousand Hills” to literally overcome obstacles in the road to its development. Given the 2015 coup and ongoing crisis in neighboring Burundi as well as the continued conflict in eastern Congo (in which Rwanda has been implicated), the group pondered whether even a commercial drone port might not pose risks for the Great Lakes region.
All in all, an excellent, thought provoking discussion with lots of successes to celebrate and still some challenges to overcome… leaving us plenty of fodder upcoming salons and scrums, where we hope you will join us.
For further reading ...
If you’re looking for a deeper dive on these issues, we recommend these three reports:
Brighter Africa: The Growth Potential of the Sub-Saharan Electricity Sector
Africa Progress Panel Report 2015
The Economic Value of Virunga National Park
Also, check out the award-winning documentary on Virunga, the true story of a group of people who risked their lives to build a better future in the Democratic Republic of the Congo.
Our discussion and final thoughts drew from the following readings:
Africa's quiet solar revolution
Leapfrogging infrastructure development in Africa?
Oil exploration threatens Africa's billion dollar World Heritage Site
Please feel free to share any additional thoughts or feedback by emailing us at ideas(at)franklinstreetpolicygrp(dot)nyc.