Millions in African countries need power: ‘What can we do?’

AP , Saturday 25 Mar 2023

From Zimbabwe, where many must work at night because it’s the only time there is power, to Nigeria where collapses of the grid are frequent, the reliable supply of electricity remains elusive across Africa.

Johannesburg, South Africa
File Photo: The land is plowed under electrical pylons leading from a coal-powered electricity-generating plant east of Johannesburg, South Africa, on Nov. 17, 2022. AP

The electricity shortages that plague many of Africa’s 54 countries are a serious drain on the continent’s economic growth, energy experts warn.

In recent years South Africa’s power generation has become so inadequate that the continent’s most developed economy must cope with rolling power blackouts of eight to 10 hours per day.

Africa’s sprawling cities have erratic supplies of electricity but large swaths of the continent’s rural areas have no power at all. In 2021, 43% of Africans — about 600 million people — lacked access to electricity with 590 million of them in sub‐Saharan Africa, according to the International Energy Agency.

Investments of nearly $20 billion are required annually to achieve universal electrification across sub-Saharan Africa, according to World Bank estimates. Of that figure nearly $10 billion is needed annually bring power and keep it on in West and Central Africa.

There are many reasons for Africa’s dire delivery of electricity including ageing infrastructure, lack of government oversight and a shortage of skills to maintain the national grids, according to Andrew Lawrence, an energy expert at the Witwatersrand University Business School in Johannesburg.

A historical problem is that many colonial regimes built electrical systems largely reserved for the minority white population and which excluded large parts of the Black population.

Today many African countries rely on state-owned power utilities.

Much attention has focused in the past two years on the Western-funded “Just Energy Transition,” in which France, Germany, the United Kingdom, the United States and the European Union are offering funds to help poorer countries move from highly polluting coal-fired power generation to renewable, environmentally-friendly sources of power. Africa as a region should be among the major beneficiaries in order to expand electricity access on the continent and improve the struggling power grids, said Lawrence.

“The transition should target rural access and place at the forefront the electrification of the continent as a whole. This is something that is technically possible,” he said.

The Western powers vowed to make $8.5 billion available to help South Africa move away from its coal-fired power plants, which produce 80% of the country’s power.

As a result of its dependence upon coal, South Africa is among the top 20 highest emitters of planet-warming greenhouse gases in the world and accounts for nearly a third of all of Africa’s emissions, according to experts.

South Africa’s plan to move away from coal, however, is hampered by its pressing need to produce as much power as possible each day.

The East African nation of Uganda for years has also grappled with power cuts despite massive investment in electricity generation.

Nigeria, Africa’s most populous country, has grappled with an inadequate power supply for many years, generating just 4,000 megawatts though the population of more than 210 million people needs 30,000 megawatts, say experts. The oil-rich but energy-poor West African nation has ramped up investments in the power sector but endemic corruption and mismanagement have resulted in little gains.

In Zimbabwe, electricity shortages that have plagued the country for years have worsened as the state authority that manages Kariba, the country’s biggest dam, has limited power generation due to low water levels.

Successive droughts have reduced Lake Kariba’s level so much that the Kariba South Hydro Power Station, which provides Zimbabwe with about 70% of its electricity, is currently producing just 300 megawatts, far less than its capacity of 1,050 megawatts.

Zimbabwe’s coal-fired power stations that also provide some electricity have become unreliable due to aging infrastructure marked by frequent breakdowns. The country’s solar potential is yet to be fully developed to meaningfully augment supply.

This means that Harare barber Omar Chienda never knows when he’ll have the power needed to run his electric clippers.

“What can we do? We just have to wait until electricity is back but most of the time it comes back at night,” said Chienda, a 39-year-old father of three. “That means I can’t work, my family goes hungry.”

In Nigeria’s capital city of Abuja, restaurant owner Favour Ben, 29, said she spends a large part of her monthly budget on electricity bills and on petrol for her generator, but adds that she gets only an average of 7 hours of power daily.

“It has been very difficult, especially after paying your electricity bill and they don’t give you light.” said Ben. “Most times, I prepare customers’ orders but if there is no light (power for a refrigerator), it turns bad the next day (and) I have lost money for that.”

Businesses in Nigeria suffer an annual loss of $29 billion as a result of unreliable electricity, the World Bank said, with providers of essential services often struggling to keep their operations afloat on generators.

As delegates gathered in Cape Town this month to discuss Africa’s energy challenges, there was a resounding sentiment that drawn-out power shortages on the continent had to be addressed urgently. There was some hope that the Western-funded “Just Energy Transition” would create some opportunities, but many remained skeptical.

Among the biggest critics of efforts to have countries like South Africa to transition quickly from the use of coal to cleaner energy is South Africa’s Minister of Mineral Resources and Energy Gwede Mantashe.

He is among those advocating that Africa use all sources available to it to produce adequate power for the continent, including natural gas, solar, wind, hydropower and especially coal.

“Coal will be with us for many years to come. Those who see it as corruption or a road to whatever, they are going to be disappointed for many, many years,” said Mantashe. “Coal is going to outlive many of us.”

World Bank agrees $7 bln, 5-year partnership with Egypt

CAIRO, March 22 (Reuters) – The World Bank said on Wednesday it had approved a new $7 billion partnership agreement with Egypt for 2023-2027 with a focus on boosting private sector jobs, provision of better health and education services, and adaptation to climate change.

The Country Partnership Agreement (CPF) will entail $1 billion per year from the International Bank for Reconstruction and Development (IBRD) and about $2 billion over five years from the International Finance Corporation (IFC), a statement from the World Bank said

Among the goals of the programme is to help create a level playing field for the private sector and to encourage investment and improve resilience to shocks through better macroeconomic management, the statement added.

Egypt’s economy has come under severe pressure over the past year, after the fallout from Russia’s invasion of Ukraine exposed underlying problems.

The government has announced ambitious privatisation plans but sales of state assets have been repeatedly delayed.

Also on Wednesday the International Finance Corporation (IFC), part of the World Bank Group, announced that it had partnered with the European Bank for Reconstruction and Development and Egypt’s Sovereign Fund to develop desalination plants in Egypt through a public-private partnership model.

The scheme is part of Egypt’s plan to increase desalinated water supply by 8.8 million cubic metres of water daily by 2050, with the first plants to be located in the north coast region of Marsa Matrouh, the IFC said.

Egypt depends almost entirely for fresh water supplies on the River Nile, and is considered at high risk from the impacts of climate change.

Reporting by Nayera Abdallah, Nadine Awadalla and Aidan Lewis, Editing by Louise Heavens, William Maclean

Transforming African Economies through Pan-Africanization

Ruth Lago, host of Business Africa

By Rédaction Africanews and Ruth Lago

How to strengthen intra-African trade, which only accounts for 17% of trade on the continent? The AU advocates a pan-Africanization of the economic system.

The 5th UN Conference on Least Developed Countries in Doha, Qatar, emphasized the key role of financing for SMEs.

In sub-Saharan Africa, women produce up to 70% of food for consumption and sale. However, agriculture remains a low value-added activity.

Strengthening trade within Africa

Economists are unanimous: Africa’s success on world markets depends on intensified regional integration. However, a disturbing observation is that intra-African trade only represents 17% of exchanges against 73% with European countries and 52% with Asian countries.

To facilitate trade, the Afcfta secretary and Rwanda recently signed an agreement for Kigali to headquarter the $10 billion adjustment fund for the free trade zone.

Gérard Amoi Amangoua, managing Director of the consulting firm NAG in Côte d’Ivoire gives his insight to Africanews.

SMEs under the spotlight at a summit in Doha

Access to finance is one of the obstacles the private sector as well as small and medium-sized enterprises face in the least developed countries. Investors fear the risks associated with financing this sector. In Doha, solutions were proposed to encourage support for SMEs.

Women at the heart of the economic system

While they represent 70% of the working population in the agricultural sector, women are mainly at the bottom of the ladder in this field. According to the UNDP, gender inequalities generate an average of 95 billion dollars a year in lost earnings in sub-Saharan Africa.

Retail sales in South Africa continue downward trend

Retail sales fell in January in South Africa   –   Copyright © africanews
Denis Farrell/AP

By Africanews

According to figures released this Wednesday by Statistics South Africa, retail sales in the country fell 0.8% year on year in January after falling by a revised 0.5% in December.

On a month-on-month basis, sales increased 1.5%.

The numbers are relevant as they offer an insight into consumer demand in Africa’s most industrialised economy

Sales in the three months to the end of January were down 0.2% compared with the same period last year, the statistics agency said

South Africa’s economic growth outlook is bleak this year, with crippling power cuts seen hurting businesses of all sizes and keeping inflation high.

Africa facing Chinese and Russian influence

Chinese Foreign Minister Qin Gang and AUC President Moussa Faki Mahamat at the…   –   Copyright © africanews
Stringer/Copyright 2023 The AP. All rights reserved.

By Rédaction Africanews

By multiplying the heavy infrastructure projects in Africa, China, and Russia aim to establish their influence in the countries of the continent, which risk their part to find themselves “trapped”, warn experts.

Railway lines, and civil infrastructure: China is multiplying gigantic projects in cooperation with African states, of which it is becoming one of the main donors.

“One in three major infrastructure projects in Africa is built by Chinese state-owned companies, one in five is financed by a Chinese institutional bank,” says Paul Nantulya, of the Africa Center for Strategic Studies, who report of the US Department of Defense.

Beijing is taking advantage of the void left by the withdrawal of Western countries, which are more hesitant to finance these projects. “The Chinese saw this void and decided to invest in infrastructure,” remarks Mr. Nantulya.

But at what cost? Anna Borshchevskaya , of the Washington Institute, think tank, points to a “debt trap” for African countries. “China offers loans for expensive infrastructure projects” and “when a country cannot repay its loan, China takes control of its strategic assets,” she says.

During her visit to Senegal in January, U.S. Treasury Secretary Janet Yellen called on African countries to _”be careful about tempting deals.”_These can “be opaque and ultimately fail to help the people they were meant to help,” she said, referring to deals China has made in Africa.

Many of the poorest states are heading towards over-indebtedness, or even default, UN agencies said at the conference of least developed countries organized by the United Nations in Qatar in early March.

“China should be the last to be accused (of using) the debt trap,” Chinese Foreign Minister Qin Gang retorted on March 7 at a press conference. “China has worked hard to help troubled countries and is the main contributor to the G20 debt service suspension initiative,” he added.

In Kenya, one of the gigantic projects carried out by China is the railway line linking the city of Mombasa to the Rift Valley, at a cost of five billion dollars, 90% financed by Beijing. China is Kenya’s second-largest donor, after the World Bank.

Tanzania has signed a $2.2 billion contract with a Chinese company for a rail line linking the country’s main port to its neighbors.

While some projects turn out to be profitable, the real benefit so far lies with Beijing, with maintenance contracts that can last up to 99 years, according to Mr Nantulya, who adds that the local impact is low because the employees are overwhelmingly Chinese.

The expert also recalls that the debt crisis of the 1990s in Africa was caused by the West and not by China or Russia.

The main country exporting arms to Africa, Russia, for its part, is strengthening its presence on the continent thanks in particular to mining projects granted to the private paramilitary group Wagner, suspected of abuses in Moscow’s war against Ukraine.

In January, the United States accused Wagner of “widespread human rights violations and natural resource extortion” in Africa. Accusations reiterated by the European Union, which took sanctions against the group in February.

Mr Nantulya notes that the group operates in Mali, Sudan, and the Central African Republic, but not “in democratic environments”, citing Ghana, Namibia, and Senegal. Experts have also denounced the environmental impact of Chinese and Russian projects on the continent.

Both countries are “notorious for greater negligence when carrying out their projects, compared to their Western counterparts” , underlines Ms. Borshchevskaya. “China is the world’s largest emitter of greenhouse gases” and finances “coal power plants abroad”, she adds.

And “Russia’s mining projects … have reportedly resulted in high levels of toxic metal compounds, pollution of groundwater resources, soils and vegetation.”

In Liberia, these impacts are “serious”, points out Davestus James, of the Liberia Center for Peacebuilding and Democracy. “Citizens are victims of their own resources,” he says. “The erosion caused by the mines pollutes drinking water (…), the resources are also monopolized and exported to the detriment of the citizens.”

S.African insurer Sanlam reports 3% rise in annual profit


The logo of South Africa’s largest insurer Sanlam is seen outside the company’s headquarters in Cape Town, South Africa March 12, 2020. REUTERS/Mike Hutchings

JOHANNESBURG, March 9 (Reuters) – South African insurer Sanlam (SLMJ.J) said on Thursday its full-year profit rose 3% as the benefits from lower claims in its life insurance business were offset by a weaker general insurance performance.

The company said its headline earnings per share, a profit measure, stood at 454 South African cents in the year to Dec. 31, compared with 438 cents a year earlier.

South Africa, the largest and the most advanced insurance market in Africa, is home to companies that account for more than two-thirds of total premiums collected across the continent.

But a substantial part of those premiums is invested in local government bonds, corporate debt and equity, making returns unpredictable, especially when South Africa is being battered by high inflation, low commodity prices and crippling power cuts.

Sanlam, the country’s top life insurer, said while its annual earnings from its life insurance business increased by 25%, its general insurance profit declined by 32%.

Its general insurance business, which contributes roughly 15% to overall profits, took a hit due to a local factors which coincided with an increase in inflation globally.

Floods in the eastern part of the country, heavy rains, claims related to power surges after blackouts end and luxury car thefts ate into its general insurance earnings, CEO Paul Hanratty told Reuters in an interview.

“And then the big story around the world was inflation,” he said.

The insurer has a “pretty optimistic” view of 2023, with the environment to be tough in the short term but by the end of the year the situation would get better, Hanratty said.

The company announced an 8% increase in its dividend to 360 cents per share.

Its share price in early trade was marginally up as against the broader all share index (.JALSH), which was slightly down.

Reporting by Promit Mukherjee; Editing by Himani Sarkar and Jane Merriman

German firm signs $34bn Mauritania green energy deal

On March 9, 2023, 9:11 AM

A German company says it has signed a memorandum of understanding for a $34bn (£29bn) green energy project in Mauritania.

Egyptian and Emirati firms are also part of the deal.

The facility will produce up to eight million tonnes of green hydrogen and other hydrogen-based products annually in Mauritania.

The first phase is due to be completed in five years’ time.

Germany is involved with a number of clean energy projects in Africa as it moves away from dependency on fuel imports from Russia and tries to meet climate targets.

Green hydrogen is produced using renewable energy sources like wind and solar power.

Story By BBC

South Africa’s GDP fell below pre-pandemic levels: data

Staff Writer, Agence France-Presse (AFP)

March 7, 2023

This general view shows the Johannesburg skyline on March 17, 2022. (Photo by Wikus DE WET / AFP)

South Africa’s economy shrank 1.3 percent in the final three months of 2022 to return below pre-pandemic levels as record power shortages hit activity, official data showed Tuesday.

“After rallying in the third quarter of 2022, South African gross domestic product (GDP) declined by 1.3 percent in the fourth quarter,” the national statistics agency StatSA said, adding that “GDP fell below pre-pandemic levels” in the fourth quarter of last year.

Nigerian court extends old banknotes to Dec 31 amid cash shortage

Camillus Eboh, Reuters News

March 4, 2023

Nigerian naira notes are seen in this picture illustration March 15, 2016 . Afolabi Sotunde/Illustration, Reuters
Reuters Images

ABUJA – Nigeria’s Supreme Court on Friday ordered the central bank to extend until Dec. 31 the use of old banknotes, whose withdrawal from circulation became an election issue after it caused cash shortages, widespread hardship and anger.

The timing left many Nigerians fed up, hungry and exhausted right before a national election to replace President Muhammadu Buhari, which saw record low turnout of 29%. Former Lagos governor Bola Tinubu of Buhari’s governing All Progressives Congress (APC) party was elected president in the poll last weekend.

Sixteen states in Nigeria had brought the case to the court, arguing that Most Nigerians were stuck with old notes and needed more time beyond the Feb. 10 date when the bills ceased to be legal tender in a botched move to replace them with newer ones.

Replacement bank notes have been in short supply, which has caused chaotic scenes at banks and adding to Nigerians’ already boiling frustrations with high inflation and fuel shortages. It has also overwhelmed the digital banking network, as a flood of transactions shifted into cyberspace.

In a country where most people rely on cash for everything from taxi fares to buying food from markets, the shortages of naira bills has riled citizens, some of whom have attacked banks and burned cash-dispensing machines.

“In line with the fact that no consultations were made … and no adequate notice was given to Nigerians before the withdrawal of existing bank notes … the directive to stop the circulation of the of the old notes is hereby declared invalid,” Justice Emmanuel Agim said, delivering the unanimous verdict.

Buhari’s government has defended the central bank plan to withdraw old 1,000 ($2.17), 500 and 200 naira bills to make way for new notes, saying it would curb money laundering and kidnappings for ransom, and offer greater transparency in financial transactions.

The move has caused rifts within the ruling APC, with several party officials saying the plan turned voters against the party.

(Reporting by Camillus Eboh Writing by Tim Cocks, Editing by MacDonald Dzirutwe)

South African central bank vows to tackle money laundering

South African Reserve Bank. /Xinhua

The South African Reserve Bank (SARB), the country’s central bank, said it is committed to the fight against money laundering.

The SARB made the remarks in a statement on Friday after the Financial Action Task Force, a global money laundering and terrorist financing watchdog, placed South Africa on the grey list of jurisdictions under increased monitoring.

“The SARB has a zero-tolerance approach when addressing the abuse of the financial system by money launderers or terrorist financiers,” the statement said.

The SARB reaffirmed its strong commitment to disrupt money laundering and the financing of terrorism through the enhancement of its supervisory activities.