By Rupak Chattopadhyay

October 22, 2025

Imagine a rural village in Africa where nightfall brings silence: no humming clinics, no bustling markets, with children reading by flickering oil lamps. For over 600 million people across sub-Saharan Africa, this is reality, trapped in darkness due to unreliable electricity.

Hospitals fail during power outages, students strain to study by candlelight, and entrepreneurs lose livelihoods to collapsing grids. Compounding this, many live in fragile, conflict-affected states with weak institutions, high violence, and heightened vulnerability to adverse events, driving displacement, poverty, and humanitarian crises. These challenges fuel broader problems, including food insecurity and economic fragility, often intertwined with conflict.

The demise of USAID in July 2025 and plummeting global aid budgets — sharply reduced from their 2023 peak — demand a bold reimagining of international assistance. In the November 4th federal budget, Canada can begin to strategically deploy its aid to leverage its global strengths while setting recipient countries on a path to economic stability, equity and growth.

In Africa, unreliable access to energy and decades of autocratic, centralized and ineffective government have stifled progress. Top-down and highly centralized systems of government, plagued by corruption and exclusion, have sparked ethnic strife, coups, and economic stagnation, undermining the safety and stability needed to attract investment.

Prosperity requires secure environments, skilled workforces, and dependable electricity—goals centralized models have failed to deliver for over half a century. Canada’s own experiences in both governance and energy innovation positions it well to offer expertise that can break this cycle, offering a blueprint for resilient, inclusive development that empowers communities and fuels sustainable economic growth.

Canada’s decentralized federal system based on the rule of law offers a unique template that has the potential to transform societies. While no governance model can be directly transplanted, Canada’s experience can inform and inspire others. People often forget that Canada adopted federalism precisely to avoid internal conflict that could have arisen from its regional, linguistic, and cultural diversity.

Decentralized systems, if designed well, empower communities to shape their futures, fostering vibrant political participation and bridging divides. Accountable local governments deliver tailored services — schools teaching in local languages, clinics addressing regional health needs, and policing that builds trust — unlike the distant, one-size-fits-all approaches of centralized regimes.

These systems reduce instability by resolving disputes locally, easing ethnic tensions, and promoting equity through transparent resource management. They also spark innovation, testing ideas such as local tax systems or conflict mediation councils that can scale nationally.

By enabling state or provincial governments, as well as local governments, to raise revenues and deliver services, decentralized governance can build self-reliant institutions, reducing dependence the sort of centralized decision making (often unaccountable and so more susceptible to corruption) that favors a narrow, capital-dwelling elite.

In fragile states, over-centralization has compromised both state capacity and resilience, leaving millions vulnerable, in many cases leading to state dysfunction, corruption capture or collapse. Canada’s experience and expertise can foster responsive, inclusive, and stable governance. Research shows decentralized systems have the potential to reduce conflict and boost economic performance by enabling localized solutions and equitable resource distribution, creating fertile ground for legitimate investment.

Data may be the new oil, but without access to reliable energy, nations risk exclusion from the digital future.

Equally critical is reliable power, and Canada’s expertise in hydroelectricity, natural gas, renewables, and small modular reactors (SMRs) offers transformative solutions. Energy is the gateway to the digital economy. Smartphones, e-learning, online banking, and artificial intelligence (AI) all require stable sources of electricity.

To put this in context, Nigeria’s installed electricity generation capacity, as of September 2025, was a mere 13,625 MW, for a country of 230 million people, which is less than the power available to Ontario’s 16 million residents, with an installed capacity of 40,000 MW. This underscores the level of energy poverty in many countries. Data may be the new oil, but without access to reliable energy, nations risk exclusion from the digital future.

Empowered provincial and local governments can ensure energy projects align with local priorities, connecting communities to the digital age. Responsive local governments can champion projects like solar microgrids for rural schools or hydropower for urban centers, creating jobs, boosting education, and enabling digital access.

Reliable energy, in turn, empowers local governments to deliver services like streetlights and health care while generating revenue through economic activity, attracting investors and fueling further growth.

As an energy superpower, Canada leads in hydroelectric innovation, with Hydro-Québec’s expertise capable of tapping Africa’s vast river systems to power cities and industries, slashing energy poverty. Natural gas, backed by Canada’s vast reserves has the potential to support reliable baseload power to stabilize grids in outage-prone regions. Renewables, driven by Canadian advancements in solar and wind, enable microgrids that bring affordable electricity to remote villages where centralized grids fail.

In fragile states, a hybrid approach — hydro for steady supply, gas for flexibility, renewables for accessibility — can electrify communities, hospitals, and factories. Even industries like food processing require reliable power supply.

Picture a Canadian-supported hydro project lighting up Kenyan towns, a gas-powered grid fueling Ghanaian industries, or micro-grid enabling a rural Kenyan clinic to store vaccines, all creating jobs and boosting local economies. Small modular reactors (SMRs), compact nuclear reactors generating 10 to 300 megawatts, offer the promise of scalable, reliable, long-term power with advanced safety features, ideal for Africa’s growing urban centres.

The synergy of decentralized governance and Canada’s energy expertise can be a game-changer. A Canadian aid policy focused on building stability and energy security in the developing world would leverage our strengths. Our hydro engineers, clean-tech innovators, and energy companies are among the world’s best.

Canada should not only export technology but also build genuine partnerships — training local operators, establishing regulatory frameworks, and fostering lasting capacity. With SMRs, Canada could lead a “Canadian Energy-for-Development Initiative” to transform energy access.

Such approaches, which integrate local industry into aid programs, have precedents. Norway’s Oil for Development Program builds energy and governance capacity in places like Mozambique, while Australia’s Mining for Development Initiative collaborates with universities, industry, and NGOs to deliver training, policy advice, and research. Even in Canada, the mining sector was once well-integrated into our international assistance programs.

In a post-USAID world, Canada is well-placed to lead with two urgent priorities:

1. Building Good Governance: Canada can deploy its expertise to train leaders and establish accountable national and subnational institutions. By fostering systems that deliver services, manage resources transparently, and promote stability, Canada can help create investment-ready environments. Building capacity at both national and subnational levels can foster community engagement and promote conflict resolution that empowers governments to drive lasting development.
2. Harness Energy Innovation: Leveraging its leadership in hydro, gas, renewables, and SMRs, Canada can partner with nations to deliver tailored energy solutions. By providing technical expertise, training operators, and supporting regulatory frameworks, Canada can ensure reliable, scalable power that transforms communities and builds enduring capacity. Working with multi-donor facilities, Canada can partner with industry to write-down the risks, thereby providing a catalyst for widespread investments in energy.

Aid should be a catalyst for human progress. By pairing strong, accountable local governments with Canada’s world-leading energy solutions, we can help reverse the failures of centralized systems that have trapped nations in instability and poverty. Good governance ensures energy projects are viable and locally relevant, while energy empowers local governments to deliver services, generate revenue, and attract investment.

Canada’s federal model and energy capacity and capability provide a unique edge to build resilient, responsive institutions that drive economic growth and leverage private capital for better outcomes — a virtuous cycle. In a post-USAID world, Canada can redefine international assistance, prioritizing growth that uplifts communities. In 2025, no community should remain in darkness. Canada can light the way.

Rupak Chattopadhyay is President and CEO of the Forum of Federations in Ottawa. He has contributed to mediation and governance reforms in Brazil, India Ethiopia,  Myanmar, Philippines, Nepal, Nigeria, Sri Lanka, Tunisia, and Yemen.  He is a Fellow of the Salzburg Global Seminar.