PHOTO ESSAY: President Obama Visits Senegal

Dar es Salaam — When President Obama announced that the United States will invest $7 billion dollars in sub-Saharan African over the next five years, with the aim of doubling access to power, he signaled his administration's commitment and willingness to participate in the continent's future in a meaningful way.

His two predecessors also introduced programmes aimed largely at African development. President Bill Clinton introduced a trade initiative, the African Growth and Opportunity Act. George W. Bush launched the Millennium Challenge Corporation, to make development assistance more effective, as well as two large-scale health programs, the President's Plan for Emergency AIDS Relief and the President's Malaria Initiative. Electricity may become President Obama's legacy to Africa.

Power Africa is an ambitious undertaking that partners the U.S. government with the governments of Nigeria, Ghana, Tanzania, Liberia, Kenya and Ethiopia, as well as with the African private sector – which is considered vital to the realization of the goal. Some seven in 10 Africans lack access to modern electricity.

But on this, as on other projects, the Americans have been playing catch-up to China, which has been pouring money into Africa in recent years, including into infrastructure projects of all kinds. Widely published reports suggest that China has committed tens of billions of dollars to the African power sector.

The International Energy Agency has estimated that $300 billion is required to provide universal electricity access across Africa by 2030. An initial $7 billion from the United States, plus an additional $9 billion from the private sector, is arguably a drop in the ocean.

However, given the dire lack of capacity, efficiency and productivity in the power sector in many African nations, any amount of investment helps - particularly if it is done in close collaboration with African partners who are stakeholders and who provide insight, guidance and leadership to the Americans, rather than the other way around.

Nigeria alone – which has a population of some 150 million people - has less than one quarter - 4,000 megawatts - of the generating capacity of New York City, which has 13,000 megawatts for a population of less than 10 million.

"If we double the amount of electricity in Africa, we'll double our GDP. Power is critical to growth and development," says businessman Tony Elumelu. Heirs Holdings, his investment company, has pledged to invest $2.5 billion in Power Africa, the largest single private-sector commitment to the project.

"Power is a long-term, capital-intensive investment," Elumelu says. "but there is no competition. So the return, when it comes, will be high. It is the most catalytic and strategic investment to make in Africa right now."

The Heirs Holding chairman has recently invested in Nigeria's Ughelli power plant, with the aim of doubling its capacity by 2015, increasing to 1000 megawatts by 2017.

Elumelu's "Africapitalism" philosophy rests on the belief that the private sector should use its entrepreneurial vision to not only create profits but to benefit society at large. He hopes other Africans will make substantial investments in electricity generation and other infrastructure and job-creating programs.

"It's a partnership," Elumelu asserts, during an interview in Tanzania, where he met President Obama to champion the power initiative. "You need American government, African governments, development NGO's, America and African private sector."

"We need to work together to make this happen," he says. "This is why I believe the president has chosen these six or seven countries – these have shown transformational leadership so others can see 'if you want your country to improve, put the right policies and environment in place'. That also becomes a subtle signal to the political people to make sure their environments are competitive."

He believes the investment environment is crucial to success. " If you don't have the right policies, the willingness of the government to put in these frameworks and policies that will unlock the opportunities in that sector, money will not go there."

President Obama also stressed the need for effective policies. "Those who are involved in this process," he said, "they continually tell us the problem is not going to be private-sector financing. The problem is going to be getting the rules right, creating the framework whereby we can build to scale rapidly. That's what we're committed to doing."

Th e African Development Bank is also working closely with governments to ensure that there is policy reform and regulatory reform to enable investments in power plants to be productive.

Some critics have called the Power Africa initiative too little and too late. Elumulu dismisses that notion.

"It can never be too late when dealing with infrastructure and power," he says. On the contrary, he praises Obama's approach. "He has made the theme of his trip trade and investment, [particularly] investment in the power sector. You can decide to take on everything on earth and do nothing. But to take power alone and give it a strong push means that in the next 5 years this continent can totally transform. It's not the number of [Obama's] visits that make it important; it's the seriousness with which he engages. I think for once America got it right for hitting the real development challenge that Africa has and approaching it from a new perspective."

Ultimately, execution is key to Power Africa's effectiveness. Critics and champions alike will be watching closely to see if implementation and results match the lofty language. If they do – if the will is truly there from both policy makers and private investors – Africa's transformation can be a reality rather than a dream.