AFRICA’S ENERGY SHORTAGE – OPPORTUNITY AND CHALLENGE FOR GERMAN INDUSTRY

The energy market of the African continent is struggling with enormous challenges. On the one hand, fossil fuels such as coal and oil continue to shape Africa’s energy landscape, while on the other hand, approaches and solutions for a climate-neutral energy transition are developing across Africa, whereby not only renewable energies such as wind and solar, but also natural gas are to be implemented in the African energy sector in a sustainable and climate-friendly manner. The outbreak of the COVID-19 pandemic put many of these modern approaches under massive pressure, as the African continent lacks the financial resources to expand an efficient, sustainable energy sector. For German industry and politics, it is an opportunity to drive the energy transition globally and create a basis for future prosperity development in Africa.

A recent Reuters news agency headline reads: „German energy industry defies Corona – billions in investment planned“. 1 The German government is administering a hefty financial injection to Germany post-COVID in terms of climate protection and sustainable recovery of the German energy industry. Undoubtedly, many of these investments will help to further drive energy supply and decarbonisation in 21st century Germany. In my adopted country of South Africa, the future prospects in the energy sector are less encouraging: Many areas of this African industrial nation are drowning in energy poverty, and the energy supply per capita is at a humanely inadequate level. Many South Africans are denied access to electricity, while the government continues to rely on fossil fuel coal, by far the worst energy source in terms of climate balance. The South African coal belt contributes massively to the country’s groundwater and air pollution and the associated damage to the health of the population, which was also highlighted this year by the NGO „Human Rights Watch“, for example. 2 Compared to South Africa, however, most African countries are much worse off: in Nigeria, for example, one of the largest economies on the African continent, more than 80 million people live without electricity. According to the International Energy Agency, around 700 million Africans are affected by energy poverty, and the COVID-19 pandemic has made the current situation much worse. 3

Lack of energy is the most critical obstacle to development in Africa, and thus the biggest block to Africa’s recovery from the economic consequences of the COVID 19 crisis, as well as the environmental impacts of climate change. Without electricity, one cannot fight pandemics and the consequences of global warming. In many development policy circles, Africa is predicted to make the great leap, the so-called „leapfrogging“, towards renewable energies. The reality on the ground often looks different: Natural gas is increasingly turning out to be a transition fuel in Africa, simultaneously accompanying Africa on the path towards electrification and decarbonisation. Many regions of sub-Saharan Africa, especially the coastal countries of East Africa and the Gulf of Guinea, have vast natural gas reserves. More importantly, they already have, especially in West Africa, the export and processing infrastructure that is essential for natural and liquefied gas. Gas is giving hope to many parts of Africa, where it is becoming the driving force behind the industrialisation of entire regions. In a very natural way, an „energy consensus“ is being established in many African countries between investors, climate change activists, development policy makers and local governments, guided by economic, social and environmental sustainability. Instead of a post-colonial development policy, African voices should be heard more in the African climate and development debate. For example, NJ Ayuk, patron of a pan-African energy association, stated at the World Economic Forum 2020 in Davos that African countries should not be deprived of the industrialisation from which the Northern Hemisphere and Asia have benefited for centuries or decades. 4

The fight against Africa’s systemic energy poverty is continually ignored in Germany’s politics because it contains a simple but hard-to-accept truth: Climate protection and energy investment must not be adversaries in Africa, but complementary. Sun and wind are the energy sources of the future, but without fossil fuels like natural gas, the African continent will not be able to establish a sustainable and climate-friendly energy sector with simultaneous prosperity development of its own population. In order to one day implement renewable energies across the board, Africa still needs fossil fuels today. People in South Africa’s coal belt would like nothing better than to see the coal shafts disappear as soon as possible and be replaced by more sustainable, environmentally friendly alternatives. But the complete absence of an electrified life robs them of the last glimmer of hope as well.

Africa’s energy shortage is Germany’s opportunity and challenge in the global energy transition: Since the beginning of the industrial revolution, Germany used hard coal to get to where it is today. The electrification of the northern hemisphere with fossil fuels is considered one of the greatest scientific achievements of the 20th century. In the 21st century, this achievement must not be denied to the African population.

About the author: Sebastian Wagner is co-founder of the Germany Africa Business Forum, a private association that promotes socio-economic relations between Germany and Africa.

1 https://www.onvista.de/news/energiewirtschaft-trotzt-corona-milliardeninvestitionen-geplant-370092349

2 https://www.hrw.org/news/2021/05/14/south-africas-deadly-air-case-highlights-health-risks-coal

3 https://www.iea.org/reports/sdg7-data-and-projections/access-to-electricity

4 https://www.weforum.org/agenda/2020/01/africa-oil-gas-development