The African Development Bank (AfDB) will focus in coming years on tackling Africa's chronic power shortages to try to unlock its economic potential and end its vulnerability to fluctuations in commodity prices, its new president said.
Though it boasts nearly a billion people, sub-Saharan Africa consumes about as much power as Spain, with less than five percent that number, due to poor generating capacity and limited transmission networks. Two-thirds of Africans have no access to electricity.
The lack of reliable power grids is a major obstacle to industrialising the continent's economies at a time when Africa hopes to make a transition from commodities producer to a manufacturing hub and challenge Asia where labour costs are rising.
According to the International Energy Agency, Africa requires an additional $450 billion in power sector investment to halve blackouts and achieve electricity access for all in urban areas by 2040.
As of 2013, the bank - founded in 1964 and funded by African nations and shareholder countries outside the continent - had lent a total of 67.22 billion Units of Account or about $94 billion.
"Africa could easily be growing at double-digit GDP rates if we solve this problem of energy," said Akinwumi Adesina, a former Nigerian agriculture minister, who was sworn in as the AfDB's eighth president on Tuesday.
"Energy poverty on the continent has to be solved as a matter of urgency, as a matter of scale. This is going to be my most important priority," he told Reuters in an interview last week.
A development economist with a doctorate from Purdue University in the United States, the 55-year-old was elected in May to head the Ivory Coast-based institution for a five-year term.
"Africa has to industrialise," he said. "We have to add value ... so that (Africa) does not expose itself to the continued volatility ... of global prices for commodities."
Africa needs to mimic China and other Asian countries' use of an abundant supply of cheap labour to take advantage of globalisation and attract investment, Adesina said. And as wages rise in China and elsewhere in Asia, Africa can offer a competitive edge with its cheaper workforce.
Wages in China have increased by over 10 percent annually over the past decade, according to China's National Bureau of Statistics.
"There's a lot of opportunity in Africa today to take advantage of these wage differentials, especially in terms of light manufacturing, textiles, footwear and others," he said.