The Political Economy of Energy Transition in Africa: The Case of Ghana and South Africa

The Political Economy of Energy Transition in Africa: The Case of Ghana and South Africa


Chigozie Nweke-Eze

Growing demand for fossil fuels and increasing greenhouse gas emission pose the greatest challenge for sustainable development globally. How to carter for country’s energy needs without undermining or compromising economic and environmental endeavors, remains a critical issue. Moreover, it is unlikely that countries would sacrifice meeting their socio-economic development goals in pursuit of climate mitigation goals. Therefore, in the developing world, the political economy of renewable energy transformations poses some important and difficult questions of research concern. Although developing countries are expected to take lead in terms of policy commitments to new technology research, innovation, investments and implementation activities, the critical role of regulatory mechanisms, policies, and institutions have been emphasized. In addition, for the policies to be effective, they have to be localized especially in the African context. Here, country-specific governance and political economy considerations take a leading role.

African countries have been facing perennial power scarcity over the years. There is bound to be additional strains on the countries’ power sector due to rising energy demand fuelled by increase in population growth, rapid urbanisation and economic growth. The abundance of renewable energy (RE) resources in Africa provides an opportunity for providing clean energy access to people, while curbing energy related emissions. In 2015, 41 of the continent's 54 countries in Africa have introduced one or more renewable energy targets. This is a significant improvement as until 2005, neither policies nor targets existed for giving importance to non-conventional renewable energy development and deployment at that magnitude. To date, about 13 ECOWAS member states have now set RE targets ranging from 5−35% of national energy generation to be achieved by 2020–2030. Despite the design and implementation of attractive policies for facilitating renewable energy development and transition in these African countries, deployment of non-conventional renewable energy has slowed due to the lack of the right mix of policies to address unique domestic challenges. The case of Ghana and South Africa presents two of the best examples of this paradox in Africa.

Ghana, like several other African countries, does not have sufficient domestic refining capacity for petroleum and therefore depends entirely on foreign sources for its majority of energy needs. As a result, it has suffered perennial power rationing over the years. The way forward is to exploit the abundant renewable energy resources in the country for sustainable electrification—as backbone for socio-economic development. Ghana enacted the Renewable Energy Act in 2011 to provide for the development, management, utilization, and adequate supply of renewable energy for generation of heat and power and for related matters. It aims to increase the share of sustainable electricity in the national generation mix to 10% by 2020. Ghana is one of the leading countries with substantial RE regulatory and fiscal policies on the African continent. The right mix of policies, which can address unique domestic challenges to help achieve its specific development goals, however remains insufficient. For instance, notwithstanding the substantial RE policies supporting developments in the electricity sub sector, deployment of non-conventional RE has slowed especially for grid-tied electricity where the share is less than 1% .

In terms of South Africa, its economy is structurally dependent upon energy intensive growth, driven by mining and minerals beneficiation and reliance on abundant sources of low-cost coal for 96 per cent of its electricity. Its electricity utility Eskom is the country’s and Africa’s largest greenhouse gas emitter. In recognition of this unsustainability and to encourage RE transition, the country introduced a 2c/kWh levy on electricity generated from non-renewable sources in 2009. Furthermore, South Africa’s energy sector is also characterized by its unique social, political and economic legacy of apartheid which continues to impact the contemporary politics of the country’s energy transition in profound ways. Before the end of apartheid in 1993 only 36 per cent of the population was connected to the electric grid, with inequality of access defined by race. While Eskom’s unprecedented expansion programme between 1994 and 2000 saw 2.4 million houses connected to the grid, one third of the country’s population is still without access to electricity, particularly in rural areas . Millions of low-income houses do not have enough regular income to buy electricity, even if they are grid connected and account for no more than 5 per cent of national electricity consumption.

Chigozie Nweke-Eze is a PhD scholar at the Institute of Geography, University of Germany, Bonn.