19-05-08 The power supply crisis in sub-Saharan Africa is definitely a constraint to economic growth, the International Monetary Fund (IMF) has warned.
Andrew Berg, an adviser in the policy wing of the IMF's Africa department, said there was insufficient investment in the energy sector, which was of concern to the IMF. He was speaking at the release of the IMF's latest regional economic outlook report for sub-Saharan Africa.

The report says unreliable supply adds to costs with African manufacturing enterprises reporting power outages about 56 days a year, costing firms 5 % to 6 % of revenues.
The IMF stresses that deficient power infrastructure dampens economic growth and weakens competitiveness, for example, through the detrimental effect on productivity. It says one study found that in most sub-Saharan African countries, infrastructure accounted for 30 % to 60 % of the adverse effect on firm productivity, which was ahead of factors like red tape and corruption.

The report says the power sector challenges facing sub-Saharan African countries are arguably the most severe of the major infrastructure challenges facing the region. Not only is the region's energy infrastructure meagre compared with other regions but electricity service is costly and unreliable.
More than 30 of the 48 countries in the region have suffered acute energy crises in recent years. It says the entire generation capacity of the 48 countries in the region at 63 GW is comparable to that of Spain. It falls to 28 GW if South Africa is excluded.

The report says the region's generating capacity has been stagnant for many years with growth rates barely half those in other developing regions and, to make matters worse, as much as one-fourth of the plant is currently not operating.
There are abundant sources of power, significant levels of government funding and notable efforts at reform but electricity access rates are very low compared with other developing regions, prices are high and the power supply is inefficient and unreliable.