A reliable and financially sustainable electricity supply is a pre-requisite for successful development, in Africa, as elsewhere. Yet, despite decades of donor support and investment, Africa’s power sector has persistently failed to deliver – households and businesses are poorly served, the budgets of key players in the supply chain are strained to breaking point, and the burden of underwriting the sector’s losses poses a persistent threat to public sector finances.

So why the failure? Meeting demand for electricity is a complex technical and organisational challenge, requiring a degree of expertise and capacity that is not always available in poorer parts of the world. However, these inherent difficulties are compounded by political and economic incentives that often steer African countries away from the long-term investments and policy reforms that the sector needs. Amongst donors, there is now a growing recognition that solutions to Africa’s power sector problems can only be pursued in the context of a better understanding of the underlying political economy.

This policy brief examines what we mean by political economy, how it influences performance in the African power sector, and what guidance political economy analysis can give in the design of interventions aimed at improving that performance.