African countries must ‘trade in energy’ to tackle electricity shortages

With over 600 million Africans estimated not to have access to electricity in their homes, there is a call for countries on the continent to engage in energy trading in order to address electricity shortages and stimulate economic growth.

This was the call made by various panelists on Tuesday at the three-day Africa Energy Indaba, taking place at the Cape Town International Convention Centre this week.

Africa Energy Indaba

Dr Kandeh Yumkella, an economist and a Sierra Leonean parliamentarian, said electricity shortages – particularly in Sub-Saharan Africa – were a stumbling block for economic development, with West Africa being one of the worst energy deficit regions on the continent.

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Yumkella said Sierra Leoneans, for example, had 15 to 20% access to electricity, and one of the ways to address this challenge was for African countries to trade in energy which involves products like crude oil, electricity, natural gas, and wind power.

He said energy trade between countries was being explored by several West African states, and this would bring a number of opportunities in the energy sector.

“Energy trade for West Africa, but particularly the rest of Africa, is a big issue if we can do the interconnections, we can trade energy quite a bit,” said Yumkella.

He was speaking at a panel discussion on African energy and policies for growth that included Central Energy Fund (CEF) group CEO Dr Ishmael Poolo, Malawi’s Minister of Energy Ibrahim Matola and Francois van Schalkwyk from the Namibia Investment Promotion and Development Board.

Deregulation

To tackle the challenge of electricity shortages, Yumkella said most countries in West Africa were focusing on renewable energy and deregulating their energy sector to bring in more private players.

“All the countries are driving heavily green expansion in their electrification strategies.

“Looking at the opportunities for renewables; a number of countries are investing, with the support of donors, in mini-grids. My country has already over 150 mini-grids [and] there is a plan to have another 150 [mini-grids] supported by the European Union, United States, and others,” he said.

Despite this, Yumkella said bringing in investment from the private sector remained a challenge due to government red tape that still remained in place.

“So, there is a big challenge in West Africa of having predictable, clear, regulatory environments to be able to attract investments.

“There is a challenge of transmission and distribution in these countries,” he said.

Decarbonisation

Yumkella said energy transmission should be more than about decarbonisation or a low-emission global economy.

He said it should be about access to reliable, affordable energy for industrilasation, job creation, and wealth on the continent.

“We need all of Africa’s resources, we need to interconnect so that we trade energy – as our friends in Europe are doing – and finally, we in Africa we will be an important part of the global transition.”

Research in renewables

Poolo said South Africa needed to invest more in renewable energy in order to meet the goals of government’s energy mix plan, which is dominated by coal.

Poolo said investment in renewable energy could be done through focusing on research and development.

“The reason for that is that we will remain price takers as Africans unless we increase budgets on search and development.

“This will ensure that we support the strong scientific community in our country and the continent through facilities equipped for conducting high-quality research that is tailored at addressing the material conditions on the ground,” he said.

Economic growth

Meanwhile, Matola underscored the importance of energy as the driver of economic growth in Africa.

He said the Malawian government was of the view that the industrial and socioeconomic development of the country depended on access to modern, reliable, and sufficient energy supply.

“You can’t talk about agriculture without energy. You can’t talk about health without energy. You can’t talk about education without energy,” said Matola.

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