Showing posts with label Africa. Show all posts
Showing posts with label Africa. Show all posts

Thursday, December 12, 2013

What Drives Electricity Adoption? A Review of Connection Charges in Sub-Saharan Africa

By Doug Barnes
Household Electricity Meter
Picture Credit: Douglas Barnes

Today many development agencies focus on the price and physical presence of access to electricity as being the main issue for lack of electricity in developing countries.  They may want to alter their thinking.  This is not to say that physical access and the price of electricity are not important, for clearly they are very important.  But a new study on Electricity Adoption and Connection Charges in Sub-Saharan Africa finds that an equally important factor may be electricity connection charges for new consumers.  Africa is the region with the lowest electricity access rates in the world (only 1 in 8 rural households and 1 of 2 urban households have electricity) and also is the region with the highest initial service connection charges.  One question not explored in this paper is the extent to which high connection charges are an indirect way for power companies to confine service to more profitable high income electricity users and to avoid political pressure to extend electricity to poor, low electricity using households. 

For electricity companies, expanding electricity to all makes quite a bit of sense for long term business development.  Electricity would contribute to economic development, and then more people could afford electricity.  As incomes grow even poorer people would buy more appliances and increase their electricity use, making them more financially attractive for electricity companies.  Thus, in the long term policies to expand electricity service make both solid financial and economic sense.