Tag: development

When young talents lead innovation and development in Africa

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“Solving Africa’s complex challenges will require innovative solutions including those developed by young inventors from the African continent. It is important that we create the necessary environment to discover them.”

Sixteen young African investors weree recently shortlisted as finalists of the Africa Prize for Engineering Innovation awarded by the Royal Academy of Engineering.  While the overall winner and three runners up will receive cash funding, all the finalists will receive training and the mentoring they need to scale up their inventions and ultimately translate them into commercial products. The inventions that range from a vertical farm to an online vaccination platform to a device that can convert air into drinking water using solar technology, are bound to deliver practical solutions to Africa’s challenges, including food insecurity.

Indeed, Africa’s recurrent challenges can benefit from many inventions coming off the African continent. Moreover, Africa stands to make more headways when its young people, who represent 60 per cent of its current population, take the lead.

But to pave way for many more inventions from Africa’s young minds, the continent must invest in creating an environment that makes it easy to discoverer these inventors. So how can the African continent pave the way so that many more young inventors are discovered?

Beginning at a young age, when students are attending elementary and high schools, the African education system should make room for young students to be creative, problem solvers and critical thinkers. Currently, the education system, in many countries, including my native country Kenya, and South Africa, is poor quality and mostly focuses on content mastery. I know. The primary and high school I attended in Kenya, for example, focused on teaching theories and materials we needed to pass our national examinations. None of the teachers ever challenged my peers and me to think and create. It was all about mastering the contents and regurgitating them back in the exams. Further, we also lacked other resources including textbooks, libraries, science labs and other resources to help create a conducive environment.

Across Africa, stakeholders investing in education operate under the assumption that passing national examinations gauged by the grades students get is clear evidence that investments in education have paid off. The caveat to this approach is that it does not necessarily prepare students to be inventors or problem solvers and to meaningfully participate in developing our global world.

Moving forward, if Africa wants to reap the dividends of inventions by African students and its young minds, African schools should adopt action-oriented teaching approaches that hone critical thinking skills, creativity and innovation. Africa’s young minds should consistently be challenged to identify local problems, seek out relevant information and resources, and to design authentic plans and solutions to solve the challenges they have identified.

Once discovered, future inventors must be supported through training and mentoring. They must also be funded. Doing so will allow them to fully develop their inventions and translate them into products that offer solutions to the challenges many African citizens face.

The Royal Academy of Engineering prize of mentoring and training support and funding will definitely allow these innovators to translate their inventions into products and to scale up and widely disseminate them. The good news is that, presently, across Africa, there are several programs including The Anzisha Prize, Made in Tony Elumelu Entrepreneurship Programme and the Innovation Prize for Africa that are actively supporting, mentoring and funding  young African inventors.  This needs to continue.

Moreover, as we aim to pave the way for many African inventors to rise up, while strengthening the overall African innovation ecosystem, we must protect these ideas and ensure that people adhere to intellectual property rights. Before the young inventors’ ideas are shared, they should have the opportunity to trademark and protect them. At the moment, many African countries, research institutions, and universities and other institutions where inventions are born do not understand quite well how to manage intellectual property assets including knowing the available options when they want to protect and translate their inventions into commercial products for national, regional and international markets.

Eventually, when these inventions are translated into products, governments should create market opportunities for their products to ensure that they thrive. For example, government hospitals can buy and install the vertical gardens in hospitals, and these could be used to grow the food to feed patients. The Kenyan Government could use the Chanjo Plus online vaccination platform and roll it out across the country. Further, these inventors must be funded so that they can build industries that further support the production of the products they have created. Such support would further lead to economic empowerment and job creation by the youth and for the youth.

Solving Africa’s complex challenges will require innovative solutions including those developed by young inventors from the African continent. It is important that we create the necessary environment to discover them. Once discovered, we must nurture the inventors, celebrate them, support, and fund their ideas all the way, until they have products and companies to manufacture these products. It is the right thing to do.

Written by Dr Esther Ngumbi,  a distinguished post doctoral researcher at the Entomology Department, University of Illinois at Urbana Champaign. She is also a food security fellow with the Aspen Institute New Voices.

How e-commerce supports African business growth

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Africa’s booming e-commerce sector can not only jump-start small businesses but also help large companies enter a market full of energized consumers.

Africa has one of the most digitally connected populations on the planet, with 400 million internet users. Sacha Poignonnec, co-founder and co-CEO of Jumia, Africa’s largest internet group, discusses why the e-commerce opportunity in Africa is so great for companies large and small in this interview with McKinsey’s Georges Desvaux. An edited transcript of his remarks follows.

There are more than 400 million internet users in Africa, which is the second-largest internet-user population on the planet, just after China. And yet distribution for goods and services is challenging. And it’s notorious that in Africa, for consumers, it’s more difficult to find goods and it’s more difficult to shop. Because of mobile and because of the internet, consumers now have a way to access goods and services in a more efficient way.

Understanding Africa’s consumers

Consumers in Africa want the same thing as consumers everywhere else: they want good products at a good price, good quality. It’s the same thing. I speak to a lot of business partners who are thinking about Africa and how different it is. There are some things which are the same everywhere. And for us, consumers want to save time and save money.

In terms of consumer segments, what is surprising is we have a lot of consumers who are not necessarily in the big urban areas. From an outsider, one could think, “OK, e-commerce is for the inhabitants of Lagos and Cairo and Nairobi.” We have a lot of consumers who live in the small villages and in the small cities. Why? Because they see a lot of choice on Jumia, and they don’t really have that choice in the areas where they live. For them, it’s very difficult to have access to the goods.

Overcoming barriers to business

One of the barriers, obviously, of e-commerce is the logistics because we have to move the products from the merchants who are selling the products to the consumer who is ordering the product. And logistics is obviously a big challenge for whoever knows Africa.

In Africa, there’s no address system in most of the cities. For someone to find a consumer, you need to have a local partner who knows where the consumer is, based on very subjective information. And, for example, if you say in a city in Africa, “I live in the third street by the church with the blue door,” that’s the address.

Building Africa’s business ecosystem

I very much believe e-commerce provides a much safer and cheaper way for small businesses to grow, because the investment required is smaller, and yet you are able to reach so many consumers. For example, one of our largest sellers in Tunisia is a person who started from scratch, and he was designing T-shirts. Then he started to sell them online. And then he was selling more T-shirts, and he hired one person to help him with the production of the T-shirts, and now he has 20 employees. And he is selling maybe 80 percent of his merchandise online, and now he opened a store.

This is one of the many examples that we see where someone can start from zero and grow. Start small, invest, and from there you grow, and then you go from online to offline instead of doing the same thing as in Europe or the US, where the merchants go offline to online.

Credits to:

Georges Desvaux is a senior partner in McKinsey’s Hong Kong office. 

Sacha Poignonnec is cofounder and co-CEO of Jumia.

Ethiopia: How Investment in Irrigation Is Paying Off for Ethiopia’s Economy

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After rapid economic growth averaging 10%every year between 2004 and 2014, Ethiopia has emerged as an engine of development in Africa.

And there are no signs that ambitions for further growth are fading. This is clear from the government’s blueprint to achieve middle-income status – or gross national income of at least US$1006 per capita – by 2025. This would see a rapid increase in per capita income in Ethiopia, which is currently US$783, according to the World Bank.

Ethiopia’s growth has been propelled by at least two factors: the prioritisation of agriculture as a key contributor to development and the fast-paced adoption of new technologies to boost the sector.

A third of Ethiopia’s GDP is generated through agriculture, and more than 12 million households rely on small-scale farming for their livelihoods.

One of the drivers of growth in the agricultural sector has been the expansion of irrigation. The country has seen the fastest growth in irrigation of any African country. The area under irrigation increased by almost 52% between 2002 and 2014.

This was achieved by investing in the sector, and by harnessing technology to expand irrigation to farmers who traditionally relied on rainfall to water their crops. This boosted productivity and income for farmers by helping them extend the growing season and become more consistent in their production.

Meanwhile, only 6% of arable land is currently irrigated across the whole of Africa. This means that there’s huge potential to expand irrigation and unlock economic growth.

These factors are highlighted by a new report from the Malabo Montpellier Panel. The panel convenes experts in agriculture, ecology, nutrition and food security to guide policy choices by African governments. The aim is to help the continent accelerate progress towards food security and improved nutrition.

The panel’s latest report analyses progress – and highlights best practice – in irrigation in six countries. These include Kenya, Mali, Morocco, Niger and South Africa. Other African countries can draw lessons from the report’s insights.

Reasons for success

The report identified a number of common factors in countries where significant progress has been made to expand irrigation, including key policy and institutional innovations.

In the case of Ethiopia, one of the main reasons for its success is that agriculture and irrigation have been featured on the Ethiopian policy agenda since 1991. In addition, specialised institutions have been set up with clear commitments to maximise the benefits of water control and irrigation systems.

In addition, the government has invested in the sector and has plans to continue doing so. It aims to allocate US$15 billion to irrigation development by 2020.

The investment is expected to deliver a number of returns. These include: more efficient use of fertilisers, a reduction in the seasonal variability in productivity and better yields from irrigated crops grown.

Another major area of development has been the collection of data. This is an invaluable asset that allows for careful monitoring and management of resources such as water, especially in times of drought.

In 2013, Ethiopia’s Agricultural Transformation Agency began mapping more than 32,400 sq kms to identify water resources, particularly shallow groundwater, with the potential for irrigation development.

The final results of this mapping in 89 districts revealed nearly 3 billion cubic metres of water at a depth of less than 30 meters. This could allow approximately 100,000 hectares of land to be brought under irrigation, benefiting 376,000 families.

Finally, Ethiopia has harnessed the value of a full range of irrigation technologies. These have ranged small-scale interventions to large infrastructure.

A joint project between the Ethiopian Bureau of Agriculture, local extension officers, and an NGO called Farm Africa, for example, helped women and young people adopt small-scale irrigation. This was part of an initiative to increase their incomes and improve their nutrition.

Overall, the project reached nearly 6,400 women and landless people. The irrigation project also benefited 700 farming families.

NALYSIS By Gebisa Ejeta

Chinese firms to construct Economic Zone in central Zambia

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A consortium of Chinese firms will construct a Multi-Facility Economic Zone in central Zambia’s Chibombo district, with President Edgar Lungu saying the project will go a long way in helping the country in its endeavor to ensure value addition to local products.

The groundbreaking ceremony of the Jiangxi Multi-Facility Economic Zone was held in Chibombo district on Wednesday. It will cover 600 hectares of land, with an initial investment of 300 million U.S. dollars in the first phase which will create more than 5,000 jobs.

Speaking during the groundbreaking ceremony, the Zambian leader said the project by a consortium of Chines companies — the Jiangxi United Industrial Development Limited, marked another symbol of the strong relationship between the two countries which dates to pre-independence period.

The Zambian leader said the project was one of the fruits from his recent visit to China where he attended the Forum on China-Africa Cooperation (FOCAC) summit held in Beijing in September.

Zambia, he said, has already started benefiting from the 60 billion U.S. dollars in funding support pledged by Chinese President Xi Jinping at the summit to serve China-Africa cooperative projects, as evidenced by the industrial park project.

According to him, the Economic Zone was also a culmination of a business forum the Zambia delegation attended in east China’s Jiangxi Province on the sidelines of the FOCAC summit.

“It is indeed a great mark of achievement to see that it’s not long ago that we visited China, but we are already witnessing the fruits of our visit. This is an indication of the importance that People’s Republic of China attaches to the bilateral cooperation with Zambia,” he said.

The Zambian leader further reaffirmed his government’s commitment to create a conducive business environment for their operations and commended the provincial administration in Jiangxi Province to ensure the actualization of the Economic Zone.

He further said his government will continue to encourage the development of multi-facility economic zones, industrial parks and farm blocks in order to foster industrialization and value addition.

Li Jie, Chinese Ambassador to Zambia, said the economic and trade cooperation zone plays an important role in pushing forward the Belt and Road Initiative and industrial capacity cooperation between China and Zambia.

“We believe that the project will fully take the location advantages of Central Province to promote the agriculture, manufacturing and food processing industries, which will contribute to local economic development and regional industrial upgrading,” he said.

Xu Guojian, a representative of all shareholders, said the project was the fulfillment of one of the eight major initiatives proposed by the Chinese president at the 2018 FOCAC Beijing summit where Chinese firms were encouraged to expand their investment in Africa by establishing and upgrading a number of economic and trade cooperation zones.

Source: Xinhua

Rwanda: The Emerging Economy To Watch

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In recent years, Rwanda has proven to be a role model for the continent.

During her November 2018 visit to Rwanda, World Bank CEO Kristalina Georgieva described the country as one that has enjoyed impressive growth and often has bold ambitions.

At business summits across the world, it’s not uncommon to hear such praise about Rwanda. Various speakers have singled it out as one of the emerging economies to look out for in terms of investment opportunities, value for money and economic growth.

The statistics explain why Rwanda has become Africa’s poster child for progress. The country has reduced reliance on donations and currently, domestically funds about 84% of the budget up from about 36% two decades ago.

In the last fiscal year (2017-2018), the economy grew by 8.9%.

Barely 24 years after the horrific genocide against the Tutsi, when the East African nation lost over a million lives and the devastation left a trail of trauma and economic ruin, its achievements have often been described as miraculous.

At the center of the tiny country’s recovery is President Paul Kagame, who led the revolt that ended the genocide.

Kagame has led his country from penury to prosperity. His government has co-invested alongside private capital to reduce risk and create a more appealing proposition.

For instance, when one of Africa’s leading telecoms groups, MTN, was keen on entering the Rwandan market in 1998, the government boosted their confidence by purchasing a 20% stake in the company.

This was driven by an ambition to not only attract the firm to the country but to ensure citizens have access to affordable telecom services. Years later, the government offloaded its stake in the firm through an initial public offering, allowing citizens to be part of a meaningful income-generating firm.

MTN is just one example of the strategic approaches taken by the Kagame-led government. The same has been replicated in multiple sectors, including finance and agriculture.

The last two decades on the Rwandan economic front have also been characterized by improving the investment ecosystem to create interest from the international and local business community.

While most would concentrate on the odds against the country, such as its small size, and its landlocked location, amidst a volatile region, Kagame sought to give investors every reason to put their money in Rwanda.

In a continent that has always been associated with corruption, the Rwandan government adopted a zero-tolerance stance on graft.

This was paired with the improvement of service delivery across all sectors, eliminating the need for bribes to access public services.

The most recent Corruption Perceptions Index by Transparency International placed Rwanda as third least corrupt country in Africa.

The reforms have for the last two decades addressed challenges that have often kept investors up at night. Steps that are cumbersome in countries across the world, such as business registration, were eased to a six-hour activity, while tax declaration and registration were simplified to online processes.

The World Bank ranked Rwanda 29th globally in its 2018 Ease Of Doing Business Report and put it second in Africa. The index tracks business efficiency across the wd

Statistics from the RDB indicate there were about 10,488 hotel rooms in the country in 2017, while aviation traffic is expected to grow to about 1,151,300 in 2018, from 926,571 in 2017.

The trend is expected to persist going forward. Rwanda will by the end of 2020 have a new modern airport located in the Bugesera District, a 25-minute drive from the capital.

While pursuing externally-driven growth, Kagame has not forgotten about the home front. This led his government to adopt a ‘Made in Rwanda’ strategy in 2016, which has reduced the trade deficit by about 36% and increased the value of total exports by about 69% from about $558 million to $943 million. Local producers have fast become empowered to produce for the local and export market.

The Rwandan leader has turned his attention to regional integration in the six-member East African Community to counter complaints about Africa’s small, fragmented markets.

The consolidated market of over 200 million citizens is more reassuring to investors and makes a business case for joint infrastructure projects such as the Standard Gauge Railway, which will connect the major Kenyan centers of Mombasa and Nairobi.

Lisa Kaestner, a practice manager for finance competitiveness and innovation at the International Finance Corporation, says: “I see Rwanda is keen on this and trying to support through the East African Community. This is one way to reduce the cost of doing business. If you look at it through the doing business lenses, all countries are trying to improve.”

Kagame’s continental mission has been evident in his various roles at the African Union (AU).

As the chairperson of the AU Reforms team, Kagame has advocated for less donor dependency and more sustainable funding by African states.

He has often challenged African countries who contribute less than 30% of the AU’s budget and turn to external donors with a begging bowl, which has been blamed for influencing the body’s decisions and priorities.

As  AU chair, Kagame has sought an adjustment of terms between Africa and the rest of the world for mutual benefit. This, he has argued, is more sustainable in the long run and presents an avenue for growth among all parties, as opposed to aid, which maintains dependence.

Months after assuming the chairmanship of the AU, in March 2018, Kagame hosted over 50 African heads of state and government in Kigali for the signing of the African Continental Free Trade Area.

As a trade bloc, the trade agreement envisions a continental market of 1.2 billion people, with a combined gross domestic product of more than $3.4 trillion.

So far, 49 countries have signed the agreement, with nine ratifications. The development is a huge step towards encouraging industrialization and job creation across Africa.

Peter Mathuki, Executive Director of the East African Business Council, says: “The country’s leadership is on the grip to lift the EAC country to middle-income level faster than most African countries. The fast economic growth is premised on pillars of good governance, easy-to-do business climate and zero tolerance to corruption… Rwanda is indeed Africa’s rising star and driver for economic transformation.”

Credits to Collins Mwai and the publication in Forbes

Kenya hosts the “Sustainable Blue Economy Conference”

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From the 26th to the 28th of November, Kenya is hosting a historic conference that has to do with environmental protection.

The three-day conference has high global support with over twenty world leaders in Nairobi for the event. A number of environment-friendly civil society organizations are also in attendance.

The major highlights of Nairobi Sustainable Blue Economy Conference are as follow:

  • After years of advocacy in the area, this is the first conference on Sustainable Blue Economy.
  • It is taking place across three continents. Kenya is hosting it with Canada and Japan as co-hosts.
  • There are 17,000 plus participants from some 184 countries involved in the conference.
  • It is under the theme: ‘The Blue Economy and the 2030 Agenda for Sustainable Development.’
  • It pools under one roof political leaders and government representatives from across the world, the African Union, United Nations organs and Commonwealth are also participating.
  • Other interested parties are as follow: The World Wildlife Fund, WWF; International Maritime Organization, IMO; International Seabed Authority, ISA; the World Bank; AFRIEXIMBANK; Ocean Foundation etc.

The Blue Economy and its importance

The Blue Economy is the economic benefit and value we realize from the Earth’s coastal and marine environment.

Sustainable Blue Economy is a marine-based economy that provides social and economic benefits for current and future generations, restores, protects and maintains the diversity, productivity and resilience of marine ecosystems, and is based on clean technologies, renewable energy, and circular material flows.

The website dedicated to the conference said: “The world has rallied around the enormous pressures facing our oceans and waters, from plastic pollution to the impacts of climate change.

“At the same time, there is international recognition that we need to develop our waters in an inclusive and sustainable manner for the benefit of all.

“The Sustainable Blue Economy Conference builds on the momentum of the UN’s 2030 Agenda for Sustainable Development, the 2015 Climate Change Conference in Paris and the UN Ocean Conference 2017 ‘Call to Action.‘”

The multi-pronged conference will primarily:

1. Identify how to harness the potential of the blue economy to create jobs and combat poverty and hunger.
2. Show how economic development and healthy waters go hand in hand.
3. Capture commitments and practical actions that can be taken today.
4. Bring together the players needed to transition to a blue economy

“Overfishing and its ecosystem impacts are increasingly becoming an equity and humanitarian issue; global leaders must urgently act together – with a strong sense of urgency –

“… to take the necessary, tangible steps towards an inclusive, sustainable blue economy, in the interest of the people of the region and the environment that supports them,” Frederick Kwame, Regional Director WWF Africa has stressed.

Africa Investment Forum (AIF) boosts dealmaking

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The African Development Bank (AfDB) has often been criticised for the time it takes to approve projects, but it responded at the Africa Investment Forum (AIF) in Johannesburg in November by bringing to the table a pipeline of 61 projects with a value of $40bn.

According to the organizers, of the 61 projects put forward, there was investment interest in 45, representing a total deal value of a little under $32bn, in sectors including energy, transport, logistics, and agriculture. The AIF sent a clear message that demand for bankable projects exists alongside the available capital to finance them. The pipeline was aggregated by the AfDB in collaboration with African development finance institutions, including the Trade and Development Bank, Afreximbank and the Africa Finance Corporation.

In the past, a common complaint has been a dearth of bankable projects and the extended timeframes to deal closure. While the Chinese are able to fast-track projects and add 120 GW of installed power capacity a year, Africa has too few projects it can showcase to reduce its energy gap. A handful of successful flagships projects still command attention, even if they took many years to see the light of day.

Accelerating deals

The AIF aimed to show that the continent can accelerate dealmaking at scale by linking funding to an existing pipeline of projects. Alain Ebobissé, CEO of Africa 50, said that the forum showed that if you bring well-structured projects to the table, an appetite for dealmaking will follow. Financial institutions are often guarded about projects and their pipeline of deals, even if they collaborate on loan syndications and project finance. However, at the forum, they threw their weight behind new projects. The president of Afreximbank, Benedict Oramah, revealed that they had 60 meetings and developed a project pipeline of $15bn.

Yet Admassu Tadesse, the president of Trade and Development Bank, whose own bank’s balance sheet has increased 50% in the past two years to nearly $6bn, said that new sources of finance must be found if the momentum of the AIF is to be maintained.

It is estimated that global funds under management represent $133 trillion, with pension and sovereign wealth funds representing $56 trillion. The AfDB’s High Fives initiative aims to unlock $170bn – less than 0.3% of those accessible assets under management. African pension and sovereign funds alone represent some $1.1 trillion, according to NEPAD, which is planning to boost African funds’ allocations into infrastructure to around 5%.

Africa’s risk profile

Much of the discussion about how to access these funds revolved around Africa’s risk profile, with the perception of risk on the continent thought by many investors to be much higher than reality, leading to a higher cost of capital and difficulty meeting some of the stringent investment criteria that foreign funds are subject to.

In response, AIF delegates discussed the ways in which investments in a number of sectors are often held back by an inadequate policy framework. While some governments are beginning to recognise that the private sector needs to be allowed to take a lead in financing and developing projects, others are too slow to reform. The Ibrahim Index of African Governance 2018 found that the average African score for business environment has declined by almost five points over the last 10 years, showing that the regulatory and policy framework does not always provide the enabling environment to unlock investment in infrastructure and agriculture.

AfDB president Akinwumi Adesina insisted that attitudes are changing among heads of government, who he argued were now encouraging growth through fiscal incentives and engaging the private sector as a key partner.

“[Heads of government] have come to realise that private sector is not the enemy and they can carry the load,” Adesina told the media. “There is a much more friendly tone in their conversations.”

To ensure that the AIF is a platform for the future and that dealmaking momentum is maintained, the AfDB will launch the Africa Investment Forum Marketplace on 1 December, an open-source digital platform that the bank has developed with the Inter-American Development Bank to publish and connect real time projects with developers and investors.

For, now the AfDB hopes that the Africa Investment Forum sent a crucial message: the continent is open to dealmaking. Finance exists and investors are increasingly passionate about the continent, if the right enabling environments can be found. Yet financiers and projects need to be linked together in forums across the continent if Africa is to rise to its huge infrastructure challenge.

Trade and Development Bank president Tadesse says that the AIF was just the first step in an ongoing process of making this happen.

“News travels, and this will help change the narrative out there.”

Ethiopia PM opens industrial park in Oromia region

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Ethiopia’s latest industrial park is located in the Oromia region – the largest and most populous, and home region of Prime Minister Abiy Ahmed.

Abiy was back home to inaugurate the Adama Industrial Park. The parks are central to the country’s economic plans and were started years back. Also in attendance was President of the Oromia region, Lemma Megerssa and other regional officials.

 

The PM’s chief of staff wrote on Twitter that the park is “an important addition to a network of world-class, sustainable eco-industrial parks in Ethiopia ready for plug and play investment. Productive investments strengthen the base of our economy and generate sustainable jobs.”

According to the Ethiopian Investment Commission, EIC, these parks are set up for specific sectors such as textile and apparel, leather and leather products, pharmaceutical, agro-processing and more.

The Adama Park joins others like the flagship Hawassa Industrial Park and the Bole Lemi I Industrial Park. Its scope will be the textile, apparel, vehicle assembly and food processing cluster. It is expected to open up a million job vacancies.

Adama, also known as Nazreth, is a city in central Ethiopia and the previous capital of the Oromia. Adama forms a Special Zone of Oromia.

Other upcoming industrial parks include Dire Dawa, Mekelle, Kombolcha, Kilinto, Arerti, Bole Lemi II and Debre Berhan Industrial Parks.

Ethiopian government has often taken high-profile visitors to tour these parks. The International Monetary Fund chief, Christine Lagarde; Rwandan president Paul Kagame and President Isaias Afwerki of Eritrea have all visited these parks whiles in the country.

by Abdur Rahman Alfa Shaban

 

Special Supplement: African Energy – A vibrant market

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First the good news. Analysis of the 5,300-plus operating, under-construction and planned generation plants now recorded by African Energy Live Data shows installed capacity on the continent will increase by almost 50% from 2018 to 2022, should all announced commercial operations dates be met. The majority of the growth will come from gas and liquid fuel-fired projects, but investment in renewable energy (RE) is increasing quickly.

It is of little surprise that Africa’s largest economies and most populous countries have the largest amount of power generation under construction. With the exception of Ethiopia – which is developing the 6 GW Grand Ethiopia Renaissance Dam (Gerd), East Africa has relatively few megawatts under construction, particularly in troubled areas such as Somalia and South Sudan. However, the region’s ambitious transmission plans point to considerable potential for power trading and, away from established grids, East Africa has proved the crucible in forging innovative off-grid solutions, as it has for other transformative technologies such as mobile banking.

Despite significant gas and hydroelectric power (HEP) resources available in West Africa, of the 6,838 MW under construction in the region, 4,102 MW is taking place in Nigeria. Gambia, Guinea-Bissau, Sierra Leone, Liberia and Burkina Faso are witnessing very little progress and have seen little new capacity come online in the past few years.

South Africa and Angola account for 92% of new generation being built in Southern Africa. In North Africa, Egypt and Algeria also account for 92% of the under construction megawatts, although Morocco and Tunisia also have major renewable energy (RE) and thermal construction projects.

Almost half of the under-construction power generation is located in North Africa (18.5 GW in Egypt and 11.4 GW in Algeria). West, East and Southern Africa have more modest levels of new capacity being built, while only 814 MW is recorded as under construction in Central Africa.

 

Live Data is an innovative and interactive data platform that allows investors and developers to identify and evaluate power projects across the continent. The platform contains detailed information on more than 5,300 projects and 4,500 organisations as of May 2018, with data points on everything ranging from fuels and technology to shareholders, financing and background information. Live Data’s sophisticated Data Tool aggregates project data to provide insight into the structure and outlook of the power sector at a country, regional and continental level.

 

Renewables breakthrough

Tumbling prices for solar and wind technologies, coupled with enthusiastic support from programmes such as the World Bank Group’s Scaling Solar and any number of bilateral initiatives from RE enthusiasts such as Germany, have contributed to ever more economies turning to RE solutions. Should the pipeline recorded by Live Data be realised, the share of renewables in the energy mix across Africa will grow from 21% by end-2018 to 25% in 2022.

Broken down regionally, the share of renewables (which includes HEP) in Central Africa will increase from 64.4% to 68.8%, in East Africa from 59% to 65%, in Southern Africa from 25.5% to 28.1%, and in West Africa from 20.4% to 25.9%. RE as a share of the gas-dependent North African electricity supply industries (ESIs) will only moderately increase, from 8.7% in 2018 to 10.2% in 2022.

 

Jon Marks is editorial director and David Slater is senior project manager at African Energy (www.africa-energy.com).