With rigorous economic research and practical policy solutions, we focus on the issues and institutions that are critical to global development. Explore our core themes and topics to learn more about our work.
In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
We know very little about what a Trump administration will do about longstanding US efforts to combat global hunger, disease, and poverty. Until we see key appointments, we don’t know what’s next for development policy to promote jobs, stability, and economic growth either. What is, for instance, the future of Power Africa?
The Trump campaign said little about these questions, and I could find no mention of Power Africa in campaign materials. The sole data point is one three-year old tweet after the launch of Power Africa claiming that $7 billion going to Africa would be stolen. I’m loathe to assume a single tweet tells us anything about future policy. Nevertheless, speculation is rife that the new administration will cancel the initiative. But here are five reasons Power Africa should appeal to a new White House team presumably focused on cutting waste and promoting business:
Power Africa is about private investment. The initiative has never been about handing over money to foreign governments or even paying for power projects with US tax dollars. It was always designed to catalyze private capital to help build power plants, expand grids, and deploy other energy systems. The private investment tally is $40 billion so far and counting. That’s leverage.
Power Africa saves America money. The initial $7 billion public sector pledge (presumably the figure referenced in the tweet) was nearly entirely comprised of anticipated loans to US companies and investors, mainly export credits from ExIm and project finance from OPIC. The modest grant elements are mostly for US transaction advisors and other technical assistance to help private power projects reach completion. That’s why the non-partisan Congressional Budget Office scored the supporting legislation as earning a positive return for taxpayers of $86 million over five years.
Power Africa creates American jobs. Both ExIm and OPIC are explicitly barred from activities that harm American jobs. If anything, new electricity in places like sub-Saharan Africa will help to generate millions of new consumers in fast-growing markets, which are all potential customers for American exporters.
We will know if we’re getting results or not. The initiative’s goals are simple and clear: help generate 30,000 megawatts of new capacity and 60 million new connections to homes and businesses. These are trackable. So far the initiative is off to a promising start.
Power Africa already has broad Republican support with leadership from Chairmen Corker and Royce. It’s much more than a presidential initiative. Power Africa has supportive legislation, the Electrify Africa Act, that was introduced by Chairman Bob Corker (R-TN) in the Senate and Chairman Edward Royce (R-CA) in the House and co-sponsored by a broad bipartisan group that included eight Republican senators and eighteen GOP members in the House. The bill then passed unanimously in February 2016.
Power Africa was always aimed at working with our allies in Africa—those countries that we are counting on to help us fight terrorists—to tackle one of their principal constraints to economic growth. It is already paying diplomatic and humanitarian dividends. Over time, it will also help bolster American prosperity and security too. Once the new team is in place and they take the time to look at the details of Power Africa—the goals, the tools, the costs, and the potential benefits to the United States—they should find plenty to love.
Are some countries too poor to consume a lot more energy? Or is income growth being held back by a lack of reliable and affordable electricity? While there is a strong relationship between energy consumption and income, the direction of causality is often far less clear. One way to estimate unmet demand may be to try to compare pairs of countries—e.g., how much additional energy does Kenya need to reach the level of Tunisia?
Power Africa has barely gotten started and now faces a whole new administration, with its own ideas and its own priorities. The biggest risk to Power Africa is loss of momentum. As a progress check, an early analysis of the transactions pipeline, and input to the next White House, CGD assessed Power Africa along eight dimensions. Here’s a summary.