Africa’s extractive sector is at a crossroads as the global energy sector shifts from fossil fuel-based systems to green energy, creating myriad challenges and new opportunities for many African countries.
Critical decisions surrounding this transition were at the heart of discussions at the first Africa Regional Extractive Industries Knowledge Hub (AFREIKH) online course, Introduction to Extractive Industry Governance: Policy and Practice, hosted by the Extractive Industries Center (EIC) at Nairobi’s Strathmore University Law School, in partnership with NRGI.
After the course concluded, participants cited the Africa-specific content and the opportunity to learn from peers and mentors as key draws. I spoke with six of our distinguished learners to find out more about what the energy transition means for development in Africa, and how to achieve good governance. These were:
Feyisayo Ayeni, from Nigeria, operations lead at NC Future Concepts
Nelly Busingye, from Uganda, development expert, civil society activist and PWYP Africa’s membership engagement manager
Bernard Kwofie, from Ghana, independent consultant
Wanjiku Manyara, from Kenya, general manager of the Petroleum Institute of East Africa based in Nairobi
Thandazile Moyo, from Zimbabwe, researcher at the Minerals to Metals Initiative, University of Cape Town
Learnmore Nyamudzanga, from Zimbabwe, independent consultant
Clockwise from upper left: Manyara, Moyo, Feyisayo, Nyamudzanga, Busingye, Kwofie.
As you’ll see below, their perspectives were candid, providing insight into what future interventions in the sector should look like. The issues facing the extractive sector are global, but some of the challenges are context-specific. This raises a question regarding the response and whether an Afrocentric approach to addressing problems in extractive sector governance is needed.
As we plan AFREIKH’s next course, we will continue to explore the insights and focus on Africa’s position in this rapidly changing environment. As countries around the world come together to join their efforts to combat climate change, Africa’s policy actors and leaders are challenged to engage in this global discussion and reshape their actions on climate change, the energy transition and the future of extractive industries to avert misgovernance of the extractive sector, mitigate climate risks and seize the opportunities from the energy transition.
Moses Kulaba: What are your thoughts about the potential impact of the energy transition on your country’s development?
Moyo: I am concerned that my country may be too slow in implementing clean energy strategies. As a Zimbabwean living in South Africa, I am familiar with the challenges associated with the use of thermal power, as both countries rely on this energy source. In addition, coal mining creates employment opportunities and contributes to the economy. Given this, I worry that these two countries may fail to take advantage of the opportunities presented by the transition.
Kwofie: Ghana has always been a resource-dependent country, and the discovery of oil and gas in commercial quantities has further increased the country’s resource base. In 2019, oil revenues accounted for nearly 10 percent of non-aid fiscal revenues, and this share is expected to double by 2022. Most households depend on liquefied petroleum gas for domestic activities, such as cooking and, in cities, lighting. Even though energy tariffs, including for electricity, are expensive, moving away from the current system to a new energy economy may lead to a wider energy gap and resource poverty. This could widen inequality and deny citizens access to affordable energy. Both the government and the economy will face fiscal challenges in the form of lost revenues from extraction, and the country will have to look for alternative sources of revenue mobilization. This may eventually impact infrastructure development and growth. The government may miss fiscal targets due to budget constraints.
Nyamudzanga: The reality is that our world is moving from fossil fuels to renewable resources and that fossil fuels have serious negative impacts on our environment. In my country, Zimbabwe, we have good policies but are not “walking the talk.” The issues around energy transition are looked at from a political point of view, which sometimes leads the government to turn a blind eye to the concrete impacts of climate change. In our country, we are experiencing droughts, heatwaves, floods and cyclones as a result of climate change, but at the same time we are celebrating investments in fossil fuels, using electricity from coal, upgrading our thermal power plants and still taking pride in new coal mining.
What should your country do in response to the quickening energy transition?
Kofie: Ghana’s government needs to develop the capacity of its experts to engage effectively with other players in the extractive sector and review its investment plans in the energy sector to focus more on renewable energy. The government should also avoid investing in long-term oil and gas projects and reconsider the national oil company’s focus on its role as an operator. And the government needs to start mobilizing private sector investment in clean energy.
Nyamudzanga: The energy transition must be phased and well managed to reduce energy poverty. Zimbabwe must begin implementing plans to replace fossil fuels with green and renewable energy, because that is the way the world is going. Climate change is real. The younger generation must lobby for this transition because they are the most affected.
Busingye: Uganda needs to facilitate debates on the energy transition. The energy transition is here with us. The various stakeholders must therefore come together to address it politically, socially and economically, so that the transition to greener energy is inclusive and just. Having completed this course, I would like to mobilize other civil society organizations to discuss the energy transition, focusing on the context of emerging producers like Uganda.
Manyara: The breadth and depth of the energy transition haven’t taken root in Kenya. As far as I can perceive, we need to sit down and create a roadmap and action plan for the country’s energy transition, which should then be entrenched and effectively implemented across all ministries’ policies. Developing an objective, pragmatic and realistic roadmap for energy transition in Kenya is paramount, and should not be done as a reaction to the approaches and views of other jurisdictions in the world. We, Kenyans, should discuss and shape this roadmap based on our own capacities and ambitions regarding energy transition.
What does energy transition mean to you and what is one message you have for leaders and policymakers in your country on what they should prioritize?
Moyo: Africa should think of “energy access,” not energy transition. Africa will provide “just energy access.”
Nyamudzanga: [We should] move away from fossil fuels such as coal, crude oil and gas and begin to use renewable energy such as hydro, wind and solar. Let us have policies that promote the use of climate-friendly renewable energy.
Ayeni: The energy transition is an opportunity for developing countries to leapfrog some of the challenges associated with fossil-based resources. I hope that our leaders and policymakers will prioritize the development of public institutions that foster better and sustainable decision-making. For my part, having taken the course, I have gained included an understanding of the specific challenges such as extractive revenue management and energy transition in the context of long-term sustainable development in resource-rich countries and the leading governance and policy strategies used to achieve this.
Respondents’ statements have been edited for length and clarity.