Africa Must Prepare for Future Growth Opportunities

Africa’s governments need to start building their infrastructure today for tomorrow’s economic boom.
Published: Tue 12 Aug 2014

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Most countries in Africa are in a catch-22 situation right now-power theft has left their pockets empty and as a result, they can’t afford to buy the technology that will reduce this theft, explains Philipp Gruner, President and CEO of KG Technologies.

In an exclusive interview with Engerati, Gruner says that many governments in Africa find it hard to justify this investment when they cannot see the immediate value. Says Gruner, “It’s difficult to convince people when hard evidence is not available.” The government is also concerned about re-election so “unnecessary” investments are avoided. In addition to this, it is also important to note that many countries are still recovering from the recent global recession.

Preparing for future growth

It is imperative that the appropriate infrastructure is in place to support future economic growth and an economic boom in the future. Without the necessary infrastructure in place, countries will not be able to reap any future benefits.

Gruner points out that while governments may find it hard to justify a full AMI/AMR rollout, other options such as prepayment are an option for energy conservations. He explains, “I always stress that making the grid more efficient is a quicker and lower cost alternative to building new power plants and therefore an updated grid should be the top priority for any country.”

Abroad, China, Japan and India are working hard to achieve a robust infrastructure in order to secure the future growth of their economies. These governments know that the countries will reap the benefits later, explains Gruner.

Since China has a one party government, there is no fear of not being re-elected so the decision to invest is not influenced by politics. Japan, on the other hand, has been forced to invest in its infrastructure which was destroyed during the Fukushima accident. The Japanese government also realises that it needs to invest in a more reliable, sustainable and secure energy supply. [Engerati-Japan’s Energy Makeover and Demand Response-Big in Japan and Japan’s Energy Gridlock.]

India’s most recent outage is a good indication to the government that their grid has to be upgraded. Also, half a billion consumers are not being billed by the utility. A smarter billing system will help to recover losses.

Because of the need to plan ahead for economic growth, the time is right now for investments into the power sector.

Gruner says that while demand side management and prepaid meters are available on the market, many African countries’ infrastructure and communication networks are not yet ready.

Says Gruner, “Demand side management and prepaid meter technology is growing but the infrastructure is not yet in place. This largely untapped African market is a definite opportunity for growth. Investors should endeavour to gain more of the market.”

Spend smartly

Before investments are made and projects carried out, it is critical that governments look at the bigger picture first, explains Gruner. He explains that many countries invest in equipment and solutions that are not used properly. “It is important that when making these investments, governments should buy features that are appropriate to their countries’ infrastructure needs. There’s no point in investing in features that won’t be used.” Gruner also points out that product quality should not be compromised as lives will be put at risk. “It’s just not worth buying an inferior product-the savings gained from a quality product, will make up for a slightly higher cost.”