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17 Nov 2007 06:18
Africa requires massive investment in its failing energy sector to boost economic growth and meet its goal of halving poverty, a United States-Africa business summit heard on Friday.
Emerging economies required a 16% increase in energy to drive every 10% of gross domestic product (GDP) growth, Andrew Fawthrop, the Chevron energy company’s Nigerian vice-president, told the gathering of business and political leaders in Cape Town.
“That is a lot of energy that needs to be added.”
The task was not an easy one, and would require a concerted African effort to attract hitherto wary investors, he said.
“It is becoming more challenging and more expensive to develop new production sources today,” said Fawthrop. “There is going to be a need for ever increasing capital.
Continuous adjustments in incentives to attract the capital to Africa will be needed.”
The continent needs to grow its GDP by an estimated 7% a year to meet the United Nations Millennium Development Goals of halving poverty and hunger by 2015.
Ugandan President Yoweri Museveni told the conference that Africa was utilising only about 7% of its hydro-power generation potential.
The figure for fossil fuels was also under 10%, and perhaps even more given recent discoveries of petroleum and gas deposits, he said.
World Bank vice-president Obiageli Ezekwesili said the lack of access to energy was hampering African productivity.
“Studies show that at the factory level, Africa compares favourably in terms of productivity with India and China, but the cost of doing business kicks in and ... Africa cannot compete.”
The continent needed investments of about $4-billion a year in its energy sector to meet current and estimated levels of economic expansion. - Sapa-AFP
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