31 January 2016

What are the links between power, economic growth and job creation?

We commissioned ODI to carry out this research on the links between power, economic growth and job creation.

600 million people (70 per cent of the population) in sub-Saharan Africa currently lack access to electricity. Meanwhile, half of businesses say that the lack of reliable power is a major constraint.

Access to power is a major development challenge and it is included the Sustainable Development Goals. To help address the issue, in 2015 we partnered with Norfund – Norway’s development finance institution – to take direct control of Globeleq Africa to boost power generation in Africa by adding at least 5,000 megawatts of generating capacity over the next 10 years

In diverse countries such as Côte d’Ivoire, Kenya and Tanzania, we found that both GDP and employment were closely and positively correlated with increased supply and consumption
of electricity over the past decade. But we couldn’t establish whether it was the economic growth that drove increased electricity supply or vice-versa. That is why we commissioned ODI to undertake this systematic review of the evidence on the relationships between energy use, economic growth and employment.

This evaluation was published in 2015. In 2016, we published an evaluation of the links between power and job creation in Ugandan businesses as a follow-up to this review.