Dismantling the barriers to Africa’s Renewable Energy potential

Talks about Africa’s development has been the top agenda for all political regimes spanning from pre-colonial times until this post-modern era. The development has been majorly viewed in terms of industrialization, sustainable agriculture, good governance and fair trade among others. Over the years the commitment of both international and local intellectuals and patriots in ensuring that Africa becomes economically independent and energy sufficient has not yielded much fruit. As noted by Jorge Carrasco, 2018, the underdevelopment of Africa has been hindered by various factors which are founded on reckless corruption and populism. The vision of sustainable African economy seems to be an ironical song that not a single nation across the entire continent can sing its tune. One can only wonder the type of impairment that has stuck African leaders to an extent that they cannot steer Africa to her dreams. Our last blog provides some useful insights and you can take a peek by clicking here. In this post, I will focus on how Africa can harness the potential her renewable energy resources present for clean economic development.

Like all other sectors, Africa’s renewable energy sector is largely impacted by international politics and policies. In addition to this, Dorcas Kariuki notes that an over-dependence on fossil fuels, political and regulatory barriers, technical barriers, market-related barriers, social-cultural barriers, financial and economic barriers, and geographical and ecological barriers are major constraints to the effective utilisation of renewable energy in Africa.

These challenges are not restricted to Africa. In fact, they apply to most other economies in the world. Nevertheless, depending on a country’s natural resources, a judicious attempt to develop and use them is a positive move in the direction of improving her economic and social well-being. Different regions of the world have applied specific strategies in maximizing the usefulness of natural resources. Africa can take some lessons from these countries, however, not every pole fits a square hole. African countries deserve ingenious approaches unique and realistic to the current need to help reap the benefits from their natural resources. Using the lenses of African Energy Outlook, I have suggested some strategies for Africa’s renewable energy to serve as building blocks to unravel the barriers hindering renewable energy potential. Citing a few countries as leading examples, I emphasize the possibility that lies with the realization of sustainable energy in Africa.    

1. A paradigm shift in energy investment

A better Africa’s energy outlook requires a balanced investment between non-renewable energy (fossil fuels) and renewable energy sources. The current sub-Saharan African annual energy investment is estimated at around $8 billion, equivalent to 0.5% of the continent´s GDP. This figure is much lower than the non-OECD countries with an average of 1.3% of their GDP. However, financial flows from both international and local investors in the last decades have heavily favoured the oil sector. According to World Energy Outlook 2014, the oil sector accounted for close to three-quarters of sub-Saharan African investment between 2000-2013, figures that are higher than the oil dominant economies of the Middle East and other parts of the world.

To better reap the utmost benefits from energy investments, SSA countries need to diversify their plans to encompass renewable energy productions that are expediently cheaper to produce compared to fossil fuel. From an environmental conservation standpoint, investing in renewable energy is more sustainable and practical for SSA’s small-scale delivery models. However, for this to happen, there is a need for concerted government reforms on capital flows and economic stability so as to embrace measures that foster affordable energy prices. This is what the New Policies Scenario 2040, a concept championed by AU is all about. New policies Scenario advocates for improved investment in renewable energy (up to $110 billion) to increase domestic energy availability while cutting on energy exports.

Some countries have taken lead in embracing sustainable energy reforms. For example, the Kenyan government has put in place measures to ensure affordable electricity tariffs while reducing losses. Under the flagship of ‘Last Mile Connectivity,’ electricity has reached deep rural areas in the last 5 years. The recent investments in wind energy (Lake Turkana) and solar energy (Garissa) by the Kenyan government is a good move in the right direction. Similarly, the government of South Africa has prioritized the procurement of low-carbon power generation sector to potentially favour renewable energy production and cut down the dependence on coal and its consequent pollution effects.

2. Making the most of Africa’s resources

Sub-Saharan Africa has been referred to as “resource-curse countries”. A term that hypothetically mocks the inability of African nations to tap the God-given natural resources to achieve self-development and economic well-being. Regardless of the abundant natural resources (renewable or non-renewable), Africa has the least economic growth, democracy, and the worst development outcomes compared to countries with fewer natural resources. However, the realization of the desired socio-economic benefits and maximization of these resources depend on the integrity of both the people and the institutions concerned.  

The energy potential of SSA can only be realized by proper usage of hydropower, solar, wind and geothermal sources. This cannot function in a vacuum, there is a need for sound policy and regulatory frameworks that favour both small and large-scale exploratory mechanisms. It is only by giving innovations a chance that the current productions of hydropower (23%) can be potentially fortified by other renewable energy sources to the desired 40% by 2040. Key to sustainable innovation in renewable energy is by ensuring that they are tailored and contextualized to local conditions and realities.

3. Ensuring proper government regulations

Success stories of natural resources use in other regions might not exactly apply for SSA context. Nevertheless, there are three fundamental pathways that can be used to ensure constructive economic returns on Africa’s natural resources: tax revenue, domestic use of the produced resource and incorporating local investors and companies in the supply chain. Suppose tax regimes for oil and gas industries which are dependent on foreign investors for equipment and labour are properly regulated, then a good fraction of the benefits of the exploited natural resources will be tapped by the locals.

Well, this requires long-term plans and clearly defined policies to be enacted to empower the domestic utilization of renewable energy sources. Success also greatly depends on the competency of institutions in charge in terms of their capability in designing, administering and enforcing such strategies. Incorporation of local stakeholders in devising strategies targeting natural resource use and development is crucial. Only through such active engagements of governments by locals can transparency and accountability and success ensured.

• 

4. Prudent and diversified dependence on natural resource 

One pitfall that has trapped many African countries is complete reliance on a single natural resource as the focal source of a country’s revenue. Countries like Equatorial Guinea, Nigeria and Chad with petroleum revenues of 90%, 75% and 50% respectively have often suffered the risk of overdependence on a single resource for sustained economic growth for many years. Sadly, these countries have not learnt from their experience. But is it true that relying on a single natural resource always don’t work? Borrowing a leaf from the economic success of Botswana, a country that has relied on a single natural resource (diamond) for revenues since independence seems to depict otherwise. Botswana has registered steady economic growth since independence putting it among the top countries with best economies and mature democracy in Africa. In fact, Botswana serves as an epitome of sustainable resource governance in Africa. Yes, relying on a single natural resource is not sustainable eventually especially when dealing with fossil fuels or minerals but it really matters how the exploited resources are used to meet the development and economic needs of a country.

For the case of Botswana, the economic success has been a product of collective responsibility of both the government and the citizens to nurture a culture of transparency, accountability and corruption intolerance, problems that other SSA countries are still battling. Unlike other African countries, public spending on development in Botswana is usually on a long-term basis, a strategy that is geared towards maximizing the effect of boom years in their economic cycles. This monetary and fiscal prudence is compounded by the exemplary work done by the parliament in ensuring that domestic infrastructure developments are handled by domestic developers to preserve the economy from external influence.       

5. Regional energy co-operation and integration

A united African continent can achieve greater development realities than as individual countries. This is true both for economic block bargaining powers as well as for energy development cooperation. Considering the difference in economic and natural resource endowment potentials, sustainable energy integration and regional cooperation remains to be a viable vision worth pursuing by African countries.

Currently, there are a number of proposals geared towards fostering Africa’s regional energy partnership. The most comprehensive one is the Programme for Infrastructure Development in Africa (PIDA) which is spearheaded by a consortium of organizations such as the African Union, the New Partnership for Africa’s Development and the African Development Bank. The major goal of PIDA is to ensure integrated transport, energy and information and telecommunications technologies across Africa by 2040.

Achieving this vision will make Africa overcome the trans-border constraints on energy sector development thereby facilitating an expanded energy trade across regions. Even though regional integration in various parts of the world have their success and failure stories, Africa’s energy regional integration still offers viable promises. So far, poor practices and unintegrated long-term cross border bilateral agreements greatly hamper the success of energy regional markets.    

---

---