Out of Africa: does ownership matter?

Technological systems, such as electricity or the Internet, are often portrayed as powerful, independent economic -- and even historical -- forces that work on people and society, in much the way a doctor operates on a patient. The one-way, or uni-directional, view of technological change provokes vigorous dissent, yet remains a popular way of conceptualizing how innovations influence human behavior at many levels.

Because techno-determinism is epecially popular with engineers, designers and inventors -- in short, the very people who create new technologies -- there is sometimes insufficient attention given to who owns a given technological system and what might be the benefits of new ownership arrangements.

In the arena of electricity generation in Africa, such a question is urgent and interesting. One fresh look suggests that private ownership of Africa's national electricity systems may in some cases result in healthier, more innovation and better managed systems.

Unlike the U.S., where private ownership of electricity generation is the norm, in Africa government tends to operate and own electricity companies. The standard of government ownership partly results from default: few private investors are willing to take on the responsibility and costs associated with providing one of the most social of all technological goods, electricity.

In only one instance in sub-Saharan Africa -- the world's most energy-poor region of the world -- does a private corporation own an entire national electricity grid. The country is Cameroon and the owner is AES Corp.

Seven years ago, in 2001, AES purchased a controlling share of Cameroon's government-owned electricity company, which relied chiefly on hydro-electricity, drawn from two large dams. The deal made AES the largest private employer in Cameroon, and one of the largest single investors anywhere in Africa outside of the oil, gas and mining sectors.

AES inherited a broken company. Theft of electricity was widespread. Employees corruptedly colluded in these thefts. And the heavy reliance on hydro-electricity left Cameroon, a well-endowed West African country with two major cities, chronically short of power.

At first, AES seemed to make things worse, suggesting that critics of electricity privitization, of which there are many in Africa, were correct. The company, which had never operated in the region before, misunderstood the extent of the problems and failed to recognize that Cameroonians would ultimately fix them -- not imported international managers and technicians.

They shift to an Africanized leadership worked well. In a new report by the government of Cameroon, AES receives acclaim for expanding generating capacity, improving the condition of technological systems and investing in local talent.

Today, AES employs 2,500 people in Cameroon and supplies electricity to more than half a million customers.

The relative success of AES in Cameroon is still fragile; the company must run hard simply to keep the lid on social pressures that compel many poor people to perceive the electricity company as a source of pillage -- and exploiter who puts profits ahead of public services.

Yet because electricity service has improved in Cameroon, advocates of private ownership of national electricity grids can point to one working example of their theory. Even skeptics of the conclusion are reminded by Cameroon's experience that who owns a technological system can matter a lot.


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