Domestic resource mobilisation, philanthropy, and regional integration are key to Africa’s energy transition. Africa must push for economic policies that enable governments to earn sufficient revenues so that they have enough funds to look after their populations without the need for handouts from the West.
Domestic resource mobilisation therefore becomes essential to securing a locally driven energy transition. This is where African philanthropy and Africa’s private sector can really play a role.
Both can invest in technology that supports Africa’s local efforts for self-sufficient green energy. African philanthropy must position itself to help the continent take advantage of near-term as well as future opportunities.
The problem of Africa is not finances, it is technology. “African governments can potentially mobilise more of their domestic resources to cover the initial capital costs of renewable energy… Use of carbon taxation could boost tax revenue while reducing fossil fuel carbon dioxide emissions.”
The Africa Climate Change Foundation argues that “Africa’s potential to meaningfully contribute to lowering emissions, both current and future, will lie in its ability to catalyse economic diversification and enhance competitiveness through clean technologies.”
There is room to encourage the private sector in South-South cooperation and pan Africanism to push African countries and other developing countries to consider furthering their cooperation and collaboration in renewable energy.
Audacity is needed. Mobilisation of adequate financing, accelerating regional integration to create large markets for energy development, harmonisation of policies and regulatory frameworks, and encouraging technology transfer and capacity building are among the pillars of implementation of the common position to accelerate energy access and just transition on the continent.
There is a need for regional cooperation through existing mechanisms on mineral-based development, trade, and economic integration, such as the Africa Mining Vision (AMV) and the African Continental Free Trade Area (AfCFTA).
The AfCFTA is an opportunity to attract investment to secure a climate-resilient future by spurring a broad mix of clean technologies — including electric vehicles and related infrastructure, super-efficient heat pumps, green hydrogen, and fast-growing renewables — while lowering day-to-day costs of energy and transportation.
For philanthropy or the African private sector to come on board and support the energy transition, African governments must make substantial efforts to do away with governance-related risks — complex bureaucracy, changing regulation, and corruption.
African countries must create financial systems that promote and facilitate clean energy options, including by supporting subsidies, facilitated loans, research and development.
This is a Southern African Trust publication authored by Claude Kabemba