Feb 19, 2014
Peace is breaking out on Capitol Hill? Can it be true? My guests this week, Tom Hart, the US executive director of the ONE Campaign, and Todd Moss, chief operating officer and senior fellow at CGD, discuss why President Obama’s Power Africa initiative and the complementary Royce-Engel bill have the potential to not only be a great success for Congress and the Obama administration, but also to radically transform the quality of life for the millions of Africans living without access to power.
Two thirds of people in African do not have any kind of modern electricity. For example, the average Ethiopian only has 52 kilowatt hours per year. While Todd had long been aware of these numbers, he says that they suddenly took on greater meaning for him when he went to buy a new refrigerator.
“I was in a store buying a new refrigerator and I noticed that my new fridge uses about 400 kilowatt-hours per year and I thought: this is crazy that my fridge would use more power than a person would.” Todd produced a chart that helped many people to better understand the extent of energy poverty in Africa.
Lack of modern energy in Africa touches every aspect of life from small entrepreneurs who are unable to grow their businesses to dramatic impacts on education and health.
“Not having electricity in Africa means kids can’t study after the sun goes down, so it impacts education, and something like 70-75% of schools don’t have electricity. It means moms cook on open fires inside their homes,” says Tom Hart. ONE has worked for years on the fight against AIDS, malaria, and other communicable diseases in Africa. Tom asserts that this has been crucially important work but adds: “More people die from the inhalation of toxic smoke fumes than from AIDS and malaria combined.”
Given these bleak figures, Tom and Todd say that they are encouraged by the Obama administration’s Power Africa initiative. They also agree, however, that complementary legislation, theElectrify Africa Act introduced by Congressmen Royce and Engel, includes adjustments that would set more ambitious targets and provide more efficient tools to meet them.
One such tweak involves modernizing policies governing the US Overseas Private Investment Corporation.
“They need multi-year authorization” and permission to retain a slice of their profits to increase staff levels and do more deals,” Todd explains. “They’re actually sitting on a lot of cash. They have paid profits back into the US treasury for thirty years, including about $250 million dollars last year. They’ve already got the capital and the systems in place for the investments. They just need the people to make that happen. I know that sounds very minor but that’s actually the main sticking point. “
Todd emphasizes that while limited staff is a significant obstacle to OPIC’s effectiveness in Africa, it is not the only obstacle. OPIC needs more flexibility to invest in fossil-fuel projects, including natural gas that Todd says are necessary to make rapid progress in bringing modern energy to Africa. The issue has become more pressing as several African countries are on the brink of oil and gas booms that will see them become energy exporters—even as their own populations lack for electricity.
“Given the current policies, OPIC would not be allowed to participate in natural gas power plants where Ghana would turn its own natural gas into electricity for its own people,” Todd explains. “We think that some flexibility for very poor countries—we’re not talking about letting OPIC invests in coal plants in Brazil—we’re talking about natural gas in poor African countries, they should be allowed a little extra flexibility,” he says.
I tell him that even a climate hawk like me finds such arguments persuasive. But what about Capitol Hill? Is this another good idea that will fall victim to a combative and stagnant Congress?
Tom is hopeful. “We have yet to have a bad meeting about [the Electrify Africa Act] on the Hill,” he says. “It has been introduced by leading Republicans and leading Democrats, and the House Foreign Affairs Committee, as well as the Africa subcommittees. It’s got 44 co-sponsors on both sides of the aisle. It’s quite tremendous when you see both Republicans and Democrats want to do something good and powerful, potentially transformative, that does not have a negative impact on the federal budget.”
Todd says he shares Tom’s optimism, viewing the Royce-Engel legislation as, “a very impressive and long-lasting legacy for the United States and for the Obama administration in sub-Saharan Africa which is after all, becoming increasingly important to us just at a time when we’re losing a lot of our influence in that region.”
Tune in to the full Wonkcast to hear from Tom what ONE volunteers will be doing over the next two weeks to help speed along this bipartisan, low-cost, and potentially transformative bill.