Symposium Posts

Electricity security is in today’s world a critical component for a well-functioning economy. Many African countries rely heavily on fossil fuels for electricity generation, while others have successfully harnessed renewable energy sources – Kenya being an example, with over 80% of its power generation being from renewable energy sources. With the global push to de-carbonise national economies, particularly the power sector, the interdependence of countries through electricity trade will become increasingly important. Countries are now only looking to develop their own clean energy capacity, but will in future, also seek to harness that of neighouring countries through cross-border power trade.

Electricity market structures come in different shapes and forms. Many have given rise to new players, particularly in power generation. Private participation brings advantages but also challenges to a sector that cannot be looked upon in isolation from the broader macroeconomic perspective. What are those advantages and challenges? How do they play out in Sub-Saharan Africa? Contingent liabilities have become a buzz word around infrastructure project development, but what exactly are they and how concerned should governments be? And most importantly, what can be done to tackle them?

Africa is by far the continent with the lowest carbon emissions, accounting for between 2% to 3% of global CO2 emissions (with South Africa accounting for about 33% of all CO2 emissions in Sub-Sahara Africa). However, with the prospects of increased intra-Africa trade as a consequence of the ambitions of African states under the African Continental Free Trade Area ("AfCFTA") it is inevitable for CO2 emissions to increase with the expanded use of fossil fuels (petroleum products, gas and coal) in prospective industries[1] who intend to tap into the opportunities that the AfCFTA presents. In addition, the prospects of increased trade between Africa states and other strategic trading partners such as the United States, the European Union and China will also contribute to Africa's pie of CO2 emission to increase gradually overtime. As for the rest of the world, the commitment to decarbonization the global economy has become even much strong pursuant to the release of report titled 'Climate Change 2021: The Physical Science Basis' dated August 2021 by the Intergovernmental Committee on Climate Change ("ICCC Report"). The ICCC Report has set-off the alarm bells that it may already be too late to meet the CO2 emissions target and has re-emphasized the need for accelerated investment in clean energy technologies and has now largely solidified the significant role green hydrogen can play as part of the energy transition from fossil fuels (petroleum products etc) to meet the global target of reducing CO2 emissions to about 1.5 degrees Celsius.

The incremental change in the level of greenhouse gas (GHG) emissions in the atmosphere has led to climate change characterised by rising global temperatures. This has resulted in extreme and often devastating weather across the globe with subsequent negative impact on the world’s economies and societies. The International Energy Agency (IEA) and the US Energy Information Administration (EIA) in July and October 2021 respectively issued projections to the effect that there is no peak in sight for carbon emissions and fossil fuels consumption. According to their data, the projections indicate that by 2050: - a) based on the current policy positions, there will likely be a 50% increase in energy consumption, b) carbon emissions will hit record high levels in the coming years as global economies recover from the disruptions of the COVID-19 pandemic, c) even though renewables will continue to be the fastest-growing new source of energy, hydrocarbon-based fuels will still meet the bulk of the projected demand and finally, d) that despite increased climate ambitions, the levels of funding that governments are allocating to sustainable climate-friendly recoveries is inadequate.

As observed by the International Energy Agency’s most recent World Energy Outlook, the Covid-19 crisis has underlined the importance of a reliable, affordable and secure electricity supply that is able to accommodate sudden changes in behaviour and economic activity, while continuing to support vital services. The electricity sector will play a key role in supporting economic recovery, and an increasingly important long-term role in providing the energy that the world needs, as it evolves into a system with lower CO2 emissions and enhanced flexibility.

The newfound freedom of speech vis-à-vis currency in the African franc zone, following the announcement on 21st December 2019 in Abidjan (Côte d’Ivoire) of the imminent end of the CFA franc and its replacement by the Eco, brings to mind the “resurgence of repressed instincts” in psychoanalysis, in other words it is giving rise to every possible or imaginable excess, especially from the “25th hour” combatants, who are only now discovering that the CFA franc is not compatible with the emergence of French-speaking Africa.

Here are some thoughts around these developments which could have both positive and negative implications for the region moving forward. West African leaders should consider these as they make their decisions about which approach to adopt.

L’Afrique de l’Ouest est composée de 16 pays divisés en ex-colonies britanniques, françaises et portugaises. Dans le cadre des efforts d’intégration économique, ces pays fondèrent en juillet 1978, la Communauté des Etats de l’Afrique de l’Ouest (CEDEAO). Depuis cette date, il y a eu des progrès pour intégrer ces différents pays, tant au niveau des échanges économiques qu’au niveau des systèmes de paiements. C’est dans ce dernier domaine que la CEDEAO peine toujours à trouver une solution consensuelle pour adopter une monnaie commune ou unique. Depuis le milieu des années 1980, le chantier de la monnaie unique a été lancé mais il reste confronté à plusieurs obstacles d’ordre monétaire et politique, comme on le verra plus loin. Il y a actuellement huit (8) monnaies en circulation dans la CEDEAO, dont le franc CFA hérité de la colonisation française et sept (7) monnaies nationales

It is difficult in just a few lines to deal with a subject as complex as the monetary cooperation agreement that is supposed to govern the transition from the CFA franc to the ECO. The “franc zone” in Africa comprises two types of CFA Franc, each with a specific denomination: that of the countries of West Africa and that of Central Africa, to which is added the franc of the Union of the Comoros. The focus here is on the West African zone.