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Cov Africa

Ghana Set to Ban Non-Degradable Plastics

Posted in Consumer Products and Goods, Current Events, Public Policy and Government Affairs

According to news reports, the Ghanaian Ministry of Environment, Science, Technology and Innovations will “sanction a directive in two weeks” banning the production and importation of non-degradable plastic products.

Like many countries, Ghana’s rapid development has put significant pressure on sanitation management systems in the country’s urban centers.  However, the issue became a national priority when waste-clogged drains and gutters contributed to last month’s tragic floods in the capital city of Accra.  The proposed ban follows weeks of comments from President John Mahama, Vice-President Kwesi Amissah-Arthur and the general public about the role that plastic waste in particular played in the disaster.

Ghana will be joining a host of other African countries that have instituted similar measures to curb or outright ban the import, manufacture and/or use of plastics especially very thin plastics.  The list of countries that have instituted similar measures includes  Botswana, Burundi, Kenya, Mauritania, Tanzania, Rwanda, Senegal, South Africa, and Uganda.

Africa and the Global Entrepreneurship Summit: A Natural Fit

Posted in Uncategorized

In remarks delivered over six years ago in Cairo, Egypt, President Obama elevated entrepreneurship on the U.S. engagement agenda and the global agenda more generally.  One of the most significant announcements was the creation of a Summit on Entrepreneurship.  Each year, the Global Entrepreneurship Summit (“GES”) serves as “a global platform connecting emerging entrepreneurs with leaders from business, international organizations, and governments looking to support them.”  It is part of a larger network of U.S. government programs that are advancing global entrepreneurship in Sub-Saharan Africa under the President’s Spark initiative.

Co-hosted by the Government of Kenya, the 2015 GES will mark the first time that the event will take place in Sub-Saharan Africa.  It will be one of the highlights of President Obama’s trip to the region later this week.

The objectives of the GES align with the unique socioeconomic demographics in Sub-Saharan Africa in light of the role of small and medium-sized enterprises (“SMEs”),  the sizeable youth population, and the ongoing gender gap.  Representing up to 90% of all businesses in the region, SMEs are critical economic drivers that spur innovation, job creation, employment and poverty alleviation.  Sub-Saharan Africa is home to the youngest population in the world and this population of nearly 200 million people aged between 15 and 24 is projected to double by 2045.  Finally, although there has been impressive progress in political empowerment (Rwanda has the highest percentage of female parliamentarians in the world), there still is considerable work to be done to close the gender gap with respect to economic participation, income, education and health.  In recognition of these issues, both financing and also generating opportunities for women and youth are at the top of the agenda for this year’s GES.

In addition, holding the GES in Sub-Saharan Africa recognizes the role that innovation has played in surmounting the development challenges in the region.  Mobile money systems and alternative data are promoting financial inclusion.  More generally, mobile telephony is revolutionizing service delivery in the agricultural, healthcare, and other sectors.  And the home battery and other decentralized energy storage options are positioned to increase vastly the accessibility and affordability of electricity and power across the continent.

Innovation and entrepreneurship has been — and continues to be — a pillar of the ongoing socioeconomic development in Sub-Saharan Africa.  Hosting the GES in the region is a natural fit.

President Buhari Comes to Washington

Posted in Current Events, Public Policy and Government Affairs

Next week, Nigeria’s President Muhammadu Buhari travels to Washington for a two-day visit, which culminates in an Oval Office meeting with President Obama on July 20.  Buhari is expected to travel light — not on luggage, but advisors.  Since he has appointed no ministers as of yet, only a handful or two of advisors is expected to make the trip.  Dubbed an “official working visit,” the meeting of the two presidents comes at an important time for Nigeria with its faltering economy and a renewed Boko Haram now teaming up with ISIS.  These two important issues promise to be front and center in the discussions.

What else will be on the agenda?  A lot of the spade work was done last week in Nigeria.  Deputy Secretary of State Tony Blinken, along with senior officials from the Departments of State, Defense, and Treasury spent a few days in Nigeria with their Nigerian counterparts hammering out an agenda for the Obama meeting.  Blinken explained to the Nigerian press that the U.S. wanted to hear from the new government what assistance needs it has and its ideas on future engagement, rather than the U.S. offering up expanded programs, especially in the North.  Insecurity and underdevelopment in the Northeast states need careful thought as a winning strategy against Boko Haram has to encompass more than a military campaign.  Rather, local governments need to govern better, health care and education need to be significantly expanded and improved, and the youth need jobs.  Finding funds for these priorities will prove difficult, however, given Nigeria’s financial crisis.

Corruption in the public sector will no doubt be discussed.  President Buhari campaigned on a promise of rooting out corruption, and the energy sector seems to be his first target.  Approximately, 200,000 barrels per day are lost through “bunkering” and subsequent illegal sales.  Some have even speculated that the president will retain control of the Petroleum Ministry and the oil portfolio, as he did when he was head of state in the early 1980s.

A fourth topic on the agenda will be transparency and accountability of government.  In a highly decentralized federal system, such as Nigeria’s, state governments and local government authorities control substantial budgets, yet oversight of local spending remains weak.  A strong vibrant civil society can often serve as a check on government, and so the two sides may use the visit to explore ideas on cooperation in that area.  As for the downturn in the economy, the parties will seek ways of accelerating the diversification of the economy.  Oil revenue accounts for 70 percent of overall government revenue, and with oil prices still in the $50 a barrel range, Nigeria is experiencing a fiscal crisis that affects not just the federal government, but also state governments, which rely on national pass-downs to pay salaries and other expenses.  Former Nigerian Ministers Adesina and Aganga pursued smart policies and good programs to grow the agricultural and industrial sectors, but more is needed to diversify further.

The power sector is on the brink of crisis, as new deals have stalled.  Private developers are anxiously sitting on the sidelines watching what happens with the $900 million, 450 MW, Azura-Nedo project.  The project was about to close at the end of 2014, but the former Attorney General decided not to authorize a sovereign guarantee to back the project.  Five Power Africa private sector partners have invested millions of dollars to date to develop a project whose fate is unclear.  This issue may rise to the level of the two presidents, both of whom are committed to expanding access to power for the tens of millions who lack reliable power in Nigeria.

It is a rich and full agenda, and the hope is that the visit will pave the way for improved cooperation on many fronts.

Welcome to Washington, President Buhari.

A Reauthorized U.S. Export-Import Bank is Central to U.S. Commercial Success in Africa

Posted in Corporate and Investment, Current Events, Public Policy and Government Affairs

If the U.S. Export-Import Bank (Ex-Im) is not reauthorized, U.S. efforts to deepen commercial ties to Africa will be significantly impeded. Not only would this put U.S. companies at a commercial disadvantage to companies from the European Union, China, Russia, India and elsewhere, it would impact negatively on the contribution that many American companies make to economic development on the continent through job creation, technology transfers and skills development.

Last month’s extension of the African Growth and Opportunity Act (AGOA) for ten years ushers in a new era of stability and predictability in U.S.-African commercial relations. Without Ex-Im’s renewal, however, AGOA’s impact will not be fully realized.

According to the Commerce Department, the U.S. exports about $22.5 billion worth of manufactured goods to Sub-Saharan Africa. This translates into support for about 120,000 jobs in the U.S. According to Ex-Im’s annual report, the agency approved more than $6.3 billion in financing for U.S. exports to Africa over the last five years, including a record of $2.1 billion of authorizations in FY 2014.

The loan guarantees financed the sale of nearly 300 GE electric-diesel locomotives from its plant in Erie and Grove City, PA., to South Africa, supporting nearly 2,500 jobs in Pennsylvania and other states. The guarantees also supported the sale of Boeing aircraft to Ethiopian Airlines, Kenya Airways and the Angolan national airlines, making Boeing the market leader on the continent and supporting more than 5,400 jobs in the U.S. In fact, in 2013, Ex-Im financed 188 transactions in Africa from small, medium and large U.S. companies to 35 of the 49 countries in Sub-Saharan Africa.

Critics charge that Exim is a “corporate welfare slush fund,” or a “bridge to nowhere,” in the words of Representative Jim Jordan (R-OH). Such criticisms are hard to sustain, however, given that Ex-Im generated a surplus of $674.7 million for U.S. taxpayers in 2014 and, since1992, a surplus of $7 billion for the U.S. Treasury. In short, for every dollar that Ex-Im invests in a transaction, taxpayers receive $1.71 in return.

The reality is that Ex-Im supports U.S. exports to markets that few other U.S. financial institutions will finance. The agency is extremely important to U.S. competitiveness globally, and, especially, in the emerging markets.

Hopefully, there is a light at the end of the tunnel. Press reports indicate that there are now enough votes in the Senate to reauthorize Ex-Im. Majority Leader, Senator Mitch McConnell, said that he will permit the vote to take place. The expectation is that supporters in the Senate will try to attach Ex-Im reauthorization to the “must-pass” bill replenishing the Highway Trust fund.

Africa’s Middle Class: Not Hype But Challenging To Get Right

Posted in Consumer Products and Goods, Corporate and Investment

The expanding middle class has been one of the cornerstones of the “Africa rising” narrative.  Discussion of that topic has been particularly lively over the past few weeks.  From a private sector perspective, this debate presents an interesting lesson about doing business in Africa’s consumer goods sector.

As an initial matter, it is important to keep in mind that there is no universally-used definition of middle class.  Although the phrase often is defined by an individual’s income, it also can be defined by other factors such as an individual’s wealth (i.e., savings or investments) or consumption (i.e., how much one spends).  For this reason, the African Development Bank’s use of income and purchasing power parities results in a prediction that the African middle class will reach half a billion people by 2030.  Yet, at the same time, Standard Bank’s use of South Africa’s Living Standard Measure results in a prediction that the African middle class in the eleven countries that combined account for half of sub-Saharan Africa’s total GDP (as well as over half of the total population) will reach 22 million people by 2030.  Despite the seemingly wide chasm between these two estimates, both the African Development Bank and Standard Bank are bullish on Africa’s burgeoning consumer market.

However, if a company is going to pursue opportunities in this market, then it first must appreciate just how diverse the African consumer market is.  Accenture has partitioned the market into five consumer segments: basic survivors, working families, rising strivers, cosmopolitan professionals, and the affluent.  Nielsen has partitioned the market into seven consumer segments: female conservatives, wannabe bachelors, evolving juniors, struggling traditionals, balanced seniors, trendy aspirants, and progressive affluents.  Whichever way a company chooses to splice the market, it is essential to identify the consumer segment(s) to which it wishes to sell and then tailor the products to suit the buying behaviors, needs and preferences of the chosen segment(s).  As with any other consumer market, price, brand loyalty, quality (and sometimes other factors) are all relevant considerations but each segment weighs these factors differently.  Equally as important is determining the supply chain and distribution network that best serves the chosen segment while still keeping transaction costs down.  In addition, advertising should be strategic with respect to both its content and its placement.  For example, recognizing that affordable and reliable Internet access is not a given across the continent, companies have begun to tailor their online advertising to pique consumers’ interests but also be compatible with potential access barriers.

So, no, there is no reason to give up on the African middle class nor the consumer class more generally.  However, in order to succeed in the market, it is essential to appreciate the diversity in the African consumer market, understand the African consumer segments which one wishes to engage, and then select and tailor the products and routes to market accordingly.

Africa’s Tripartite Agreement: Another Step toward Integration?

Posted in Current Events, Public Policy and Government Affairs, Trade Controls and Policy

Considerable attention has been paid to the recent signing of the Tripartite Free Trade Agreement (TFTA) which will bind three of Africa’s regional economic communities (RECs) together into one large free trade market of 26 countries, accounting for nearly 60 percent of the continent’s GDP.  How significant the Agreement will prove to be lies in the (implementation) details.  The parties to the Agreement chose a path toward integration that involves a gradual phased approach whereby each REC develops its own framework and blueprint.  However, the three RECs — the East Africa Community (EAC), the Common Market for Eastern and Southern Africa (COMESA ) and the Southern African Development Community (SADC ) — are at very different levels of progress in this regard.

Although the EAC was (re-)formed only in 2000, this community of five nations has accomplished far more than its REC peers.  A few of the many accomplishments include the adoption of an external tariff, an expansion and improvement of the port infrastructure in Kenya and Tanzania, prioritization of regional transport systems, and the adoption of common sanitary and phytosanitary measures.

Moreover, the EAC also has focused on important, but less flashy, process and systems improvements, such as harmonization of customs procedures, one-stop border crossings, and a system that allows sharing of customs clearance information.  It is far from perfect, but the metrics show significant improvements, reducing the number of days of transit time from Mombasa to Kigali from twenty-one days to just six, for example.

In contrast, neither COMESA nor SADC has advanced its respective customs and trade agenda.  COMESA, for example, has to build consensus among nineteen African member states — from Egypt to Swaziland — while doing so in three major languages (i.e. Arabic, English, and French).  COMESA itself has recognized a “lagging behind” in meeting its regional commitments and is placing greater emphasis on monitoring implementation of policies on the part of member states.  For the EAC, which comprises five member states, implementation and monitoring of agreements is much more manageable.  SADC has made remarkable strides in regional integration through a competitive, interconnected power market, known as the South African Power Pool.  However, it too has run into many barriers in establishing a functional customs union.

Some trade experts have commented that African countries should spend less time on “unachievable” agreements and more resources on regional infrastructure.  Well, actually they need to do both: good roads and ports are meaningless if efficient clearance systems are not in place.  At a minimum, implementation of the TFTA should focus on harmonizing the three member RECs’ external tariffs, customs procedures and standards.  Introducing commonality and removing contradictions will be particularly important for Kenya and other countries that belong to two or more RECs.

The AU still has its sights set on signing a continent-wide free trade agreement (CFTA) by 2017.  EAC Secretary General Richard Sezibera, usually cautious and careful, was enthusiastic about its prospects saying, “all that’s left is bringing in [the Economic Community of West African States], which shouldn’t be difficult.” In the end it all comes down to implementation, and that implementation for the TFTA will fall upon the “Tripartite Task Force of the Secretariats.”  Whoever fills their ranks, they have an enormous task.

Nigeria Sends Clear Signal of Getting Serious about Tax Enforcement

Posted in Corporate and Investment, Public Policy and Government Affairs

Over the past few years, Nigeria has reformed its transfer pricing regulations, introduced mechanisms to tackle tax evasion and pursued other revenue enhancing initiatives.  With revenue from petroleum taxes at its lowest point in fifteen years, the country is under even more pressure to increase its tax enforcement efforts.  At the same time, there have been reports alleging that the African continent loses over $50 billion every year to illicit financial flows has brought increasing attention to the need to strengthen the capacity of tax authorities in Nigeria and other countries.  Thus, it is a major development that the Nigerian government finally has ratified the Convention on Mutual Administrative Assistance in Tax Matters (“the Convention”).

The Convention is “the most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion and avoidance.”  Under the Convention, States agree to provide administrative assistance — in the form of information exchange, recovery assistance and service of documents — to each other in tax matters.  (Where appropriate, this assistance may involve measures by judicial bodies.)  The Convention applies not only to income taxes but also taxes imposed by political subdivisions or local tax authorities, compulsory social security contributions, and other categories (e.g., property taxes, value added taxes, excise taxes).

As a party to the Convention, Nigeria now has access to the tax and other information that a revenue authority either has or can obtain in the over 60 countries that have ratified the Convention, a group that includes not only the majority of the G20 countries but also an increasing number of developing countries.  Nigeria can request this information or, with respect to certain categories of cases, enter into agreements for the information to be exchanged automatically.  In addition, there is a spontaneous exchange of information provision under which other States shall forward certain information without prior request from Nigeria.  This provision is triggered by a variety of circumstances, most of which pertain to situations where there may have been a tax loss to Nigeria.  Tax savings that may have resulted from “ within groups of enterprises” — in other words, from inappropriate transfer pricing — is one of these situations.

Nigeria also stands to benefit considerably from the enforcement support provided for by the Convention.  Upon a recovery assistance request from Nigeria, other States are obligated to “take the necessary steps to recover tax claims […] as if they were its own tax claims” unless they have made a reservation in respect of this provision.  Nigeria also can request other States to effect service of “documents, including those relating to judicial decisions” on its behalf.

Ratification of the Convention is a clear sign that Nigeria intends to pay far closer attention to the income-generating activities, and subsequent tax liabilities, of multinational corporations and other taxpayers.

Kaberuka’s Last AfDB Annual Meeting Begins and Ends on High Notes

Posted in Corporate and Investment, Current Events, Public Policy and Government Affairs

The election of a new president to head the African Development Bank captured the headlines out of Abidjan last week, but the Annual AfDB Programme and meetings were more than electing Africa’s new leading voice on development and inclusive economic growth.  Thousands of people attended this year’s Annual meetings from government, the private sector, and development institutions to witness or participate in discussions of the most important development issues on the continent.  With the theme of “Africa and the New Global Landscape”, experts debated topics as diverse as “strengthening health systems to prevent the next outbreak” to more familiar themes of the Bank, such as regional integration and energy.

Outgoing President Kaberuka frequently says that Africa’s improving, yet still poor, infrastructure costs the continent at least two percent of Africa’s annual growth, and the Bank, while it cannot alone fill the infrastructure gap, it can and should play a leading role in mobilizing investment in infrastructure.  New models for mobilizing this investment are needed, however.  In the energy panel (“Energy: The Next Revolution”), Africa Finance Corporation’s Andrew Ali sparked some concern by declaring the current private power delivery model as unworkable and ineffective, with projects taking on average seven years to close and only two projects closing a year in Sub-Saharan Africa.

But more help is on the way.  The “Africa50 Fund”, announced by the Bank only a year ago in Kigali, has raised more than $700 million and is expected to reach $1 billion before the end of this month.  The new CEO, Alassane Ba, believes the independent structure of the fund will allow for quicker investments and with its own project development facility he expects project development lead times to be cut in half.  The Indian government is entering into a novel partnership with the AfDB through the creation of the “Kukuza Project Development Company.”  Kukuza, which means “to grow” in Swahili, will target and grow projects that are in early-stage development, and once grown will sell them off to developers.  It uses a model that worked well in India, and according to Sanjay Ghag, Senior Vice President of Infrastructure Leasing & Financial Services Ltd (IL&FS), the facility will include a stable of proven experts who know the pitfalls of project development and will be able to fast-track projects.  IL&FS will serve as the main sponsor , and other partners include India’s Exim Bank, State Bank of India, Allied Investment Partners (of Abu Dhabi), and the AfDB.  And, Power Africa plans to deploy more transactions advisors to the continent to help with project development.

This year’s annual meetings opened on a positive but cautionary note with a discussion of the Bank’s recent research report “African Economic Outlook 2015”, which anticipates GDP growth in 2016 of 5 percent, but also lays out some of the top demographic challenges for the continent, such as growing gender inequality, a tripling of the population by 2050, and a commensurate rise in the youth population.  As some 370 million youth are expected to enter the job market in the next fifteen years, governments will be challenged to turn the “youth problem” into a “youth dividend.”

President Adesina and the Years Ahead for the African Development Bank

Posted in Current Events, Public Policy and Government Affairs

After six rounds of voting that saw off seven candidates from across the region, Nigeria’s outgoing Minister of Agriculture and Rural Development Dr. Akinwumi Adesina has been elected to serve as the next president of the African Development Bank (AfDB).

From the start, Adesina was one of the leading contenders for the role.  During his four-year tenure as Nigeria’s Agricultural Minister, Adesina has introduced the electronic wallet system and other innovations that have improved access to financing and inputs for over fourteen million smallholder farmers as well as drastically reduced corruption and other market inefficiencies.  At the core of this work has been a push for a fundamental change in the perception of agriculture from that of subsistence to business.  These accomplishments have led to him being described as “a man on a mission to help Africa feed itself” and honored with Forbes’ prestigious African of the Year award.  In addition, Adesina has served on the Economic Management Team of Nigeria, the country’s highest economic policy management body.  The fact that Adesina had strong support from both the outgoing Jonathan administration and President Buhari reflects well on Nigeria and suggests an emerging policy consensus on key issues.

Notwithstanding Adesina’s extensive service to his country, he has proven himself to be a pan-Africanist.  He has lived in more than 15 countries across the continent and is fluent in French on account of having lived and worked for over a decade in Francophone countries.  In addition, Adesina is one of 17 global leaders appointed by UN Secretary-General Ban Ki-moon to the Millennium Development Goals Advocacy Group and has served as the Vice-President for Policy and Partnerships at the Alliance for a Green Revolution in Africa.

Adesina is taking the helm at an especially critical time in the Bank’s history.  Below are four of the main challenges, opportunities and priorities that lie ahead for the incoming president.

  • Infrastructure. Africa’s infrastructure deficit is one of the region’s most significant challenges but also one of the most promising areas for private sector involvement. Over the past few years, the AfDB and other relevant actors have been implementing “specific initiatives to unlock private funding with technical assistance and targeted financial support (including for regional projects) and to make multilateral banks procedures more amenable to public-private partnerships.”  Closing the infrastructure gap and developing Africa’s private sector will require Adesina build on this work which was a cornerstone of outgoing President Kaberuka’s legacy.  It is promising that Adesina has identified smart infrastructure and private sector development as strategic priority areas for his tenure.
  • Regional integration. Increasing intra-African trade is another area of reform that is important to the public and private sectors in the region and will  be part of President Kaberuka’s legacy. Twenty-six African nations stand on the brink of launching the COMESA-EAC-SADC Tripartite Free Trade Agreement, a deal that will bring together over 600 million people, approximately 56% of Africa’s economic activity and over $1 trillion in GDP.  This agreement has been years in the making and implementation will require support from a broad range of actors.  It is essential that Adesina and the AfDB play a leading role in ensuring the success of this monumental undertaking.
  • Economic diversification. Although Africa’s GDP growth is expected to increase to 4.5% this year and 5% in 2016, a prolonging of the current state of low commodity prices may impact government spending (and, in turn, economic growth) in the region’s largest markets including Nigeria and Angola. The AfDB should support economic diversification and related initiatives to improve the economic resilience of the region’s more resource-dependent countries.  In this regard, Adesina’s experience in transforming Nigeria’s agricultural sector is one of his strongest assets.
  • Fragile states. Political stability has been one of the main reasons that the African continent has enjoyed robust economic growth since the early 2000’s. However, the current unrest in Burundi is an immediate reminder of the fragility of some of the continent’s newer democracies.  In addition, political instability, as well as conflict and climate change, is a primary contributor to the food insecurity that persists in a number of countries in the region. Fragile states are a high priority for the AfDB which is currently implementing a five-year strategy for addressing fragility and building resilience by strengthening institutions and addressing other root causes.  The situation in Burundi may reach resolution before Adesina begins his first term in September but the elections in the Democratic Republic of Congo and Rwanda are right around the corner.

Dr. Adesina has his work cut out for him but his track record suggests that he is fully up to the task.

What the Home Battery Could Mean for Africa

Posted in Energy and Natural Resources

The African continent is revolutionizing itself as the place where no infrastructure is no problem.  This began in the telecommunications field: Africa lacks a robust system of landlines, which traditionally enable better access to desktop computers, online services, and financial institutions.  But the emergence of cellular telephony has allowed individuals across Africa to bypass this infrastructure deficiency.  Today, the Pew Research Center estimates that over two-thirds of Africans own cell phones, with adoption nearing 90% in some countries.  Now, Africa may be on the path to revolutionizing itself in a second field: electricity.  Decentralized energy storage options, like those announced by Tesla, General Electric, Samsung, LG Chem, and others, could play a significant role in enabling that revolution.

Currently, Africa’s energy situation mirrors its former telecommunications situation.  Over 600 million people live without access to electricity in Sub-Saharan Africa.  While 13% of the global population lives on the continent, they currently constitute less than 5% of global energy demand.  And the continent as a whole is rich in renewable energy resources: the Sahara Desert provides unparalleled sunlight access, the Rift Valley contains geothermal reserves, and the coasts and interior have strong wind streams.  But at present there is no way to harness or store these energy sources effectively.

Hence the potential significance of distributed generation.  By day, a home battery can be charged on renewable sources; by night, it will continue to provide power despite the setting sun or calming winds.  Most manufacturers of decentralized storage appear to provide scalable batteries—one battery could power a home or small business, and many batteries could power a town.  Home battery costs have decreased 14% since 2007, as many manufacturers currently list their home batteries at around $3,000.  Moreover, costs to consumers will likely continue declining because of the many manufacturers competing in the marketplace and Tesla’s promise to place its home battery specifications in the public domain.

When Tesla CEO Elon Musk unveiled his company’s home battery on April 30, 2015, he noted its potential value for Africa.  The alternative—installing and upgrading traditional grid infrastructure on the continent—is highly expensive.  For instance, South Africa’s government-owned utility company estimated it would cost $22 billion to improve the grid enough to meet current demand.  Decentralized energy storage that is affordable will increase the feasibility of on-site energy generation and reduce the need for a fully-developed transmission grid.  Analysts project the market for microgrids reaching $20 billion in 2020, and on-site generation of solar power becoming comparable to or cheaper than grid-supplied power.  Just like how cell phones enabled access to the internet and microfinancing, distributed generation and on-site storage could light up homes, increase technological innovation, and change the look of the African economy.

Whether a home battery built by Tesla, General Electric, Samsung, LG Chem, or another company becomes the premiere energy storage solution in Africa, distributed generation has the potential to revolutionize electricity and power throughout the continent.

Calvin Cohen is a summer associate in Covington’s Washington D.C. office and a student at Vanderbilt University Law School.