Africa Economic Forum

Energy Industry in Africa

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Energy poverty is a major barrier to development, and this problem is particularly evidentinsub-Saharan Africa, where the majority of the population lives without access to electricity and clean cooking.The continent has more than enough resources to satisfy its current and future demands ,but most countries struggle with significant difficulties to attract large investments and to support virtuous small businesses, both necessary to run the race towards universal access to modern energy.

The important and wide-ranging role of energy in the development process is well known and it needs no retelling here. However, sufficeit to state that there is a strong feedback relationship between the energy sector and the national economy. Energy demand, supply and pricing have enormous impact on social and economic development and the living standards and overall quality of life of the population. On the other hand the economic structure and the changes in that structure as well as the prevailing macroeconomic conditions are key determinants of energy demand and supply. Furthermore, energy affects environmental quality through deforestation associated with unsustainable biomass energy dependence and green house gas emission from fossil fuel use resulting in global warming. Priorto 1973, the rate at which energy consumption increased closely followed the rate at which the economy expanded.

Beyond the low level of energy consumption per capita, and unsustainable over-dependence on bio-mass (wood-fuel), Africa is faced with enormous problems in the quest for sustainable energy development. For the purpose of addressing these problems effectively, we can summarize the fundamental energy question facing Africa as providing and maintaining wide spread access of the population to reliable and affordable supplies of environmentally cleaner energy to meet the requirements of rapid economic growth and improved living standards.

A major constraint to efficient energy development in Africa is the low priority given to energy efficiency and resource allocation issues indomestic debates, especially in much major net oil exporting economies. These issues are often submerged by the perception that oil is apolitical good, and sharing the oil cake must imply cheap domestic fue. Policy reforms based on the fundamental economic principle of opportunity costs stress the need for the separation of allocative and distributional objectives in the energy market and using policy instruments that have comparative advantage in achieving either objective efficiently. Prices have comparative advantage in achieving efficient resource allocation while taxes and direct income transfers, rather than price subsidies, are more efficient tools for achieving distributional objectives. The thrust of economic policy reform should be to properly balance economic and social objectives. However, the socio-political repercussions of dramatic policy reversal in a depressed economy should not be underrated as the policy reform experience of recent years in many countries demonstrate. In this regard there is need for caution in implementing severe shock-prone policy changes which could inflict very high short and medium term adjustment costs on the economy because of the way such policy changes are implemented. Fundamental reforms, which are hastily implemented under crisis condition without sufficient preparation, impose unnecessarily high cost on the economy interms of output losses and reduction in living standards. In addition the cost-push and output deflation effects of a more liberalized energy price policy and market environment must not be under-estimated in a depressed economy. The lack of policy stability and consistency compounds the problem too.


The potentials for efficient energy use pattern and ultimately achieving sustainable energy future are great, provided a number of problems identified earlier are effectively dealt with Interms of designing approaches and polices to deal with the challenges of sustainable energy development, in the over all context of sustainable human development, a variety of policies and other measures are suggested below.

  • Policy interventions must encourage more efficient allocation of resources. Improvement in energy use pattern can only be sustainable when it is carried out in the context of a general improvement in the utilization of other productive resources.
  • Policy interventions that correct market and government failures, which have encouraged in efficient energy, usepatterns. Such are evident in choices involving the construction and use of residential and public buildings, agricultural and industrial machines and equipment, and other capital stock.The market environment must be sufficiently free such that consumers can economically trade off energy costs against service quality without policy induced distortions.
  • Capacity building in research and development that promotes the choice of economically and environmentally efficient energy use pattern.


African Development Bank (1996) The electricity subsector in Africa. Africa energy programe.Desai, AV. (1990) Energy in Africa. Willey Eastern Ltd. IDRC, and UN University TokyoInayemi, A. (1983) Energy in West Africa, Energy Policy, September 235-249.Africa Progress Panel (2015) Africa progress report 2015 - power people planet: Seizing Adeicans energy and climate opportunities Geneva.

AEF Energy Industry Core Group

The Energy Industry committee of the AEF brings together the top 100 Energy companies in Africa as ranked by the AEF Industrial Index, and to others by invitation only. While Africa’s energy sector is vital to the continent’s economic prospects, it has not been able to achieve the reliable domestic energy supply that its people and businesses require. Energy demand in Africa has been increasing at an annual rate of around 3%, the highest among all continents, but energy supply continues to lag significantly It has been estimated that achieving global net zero by 2050 will cost as much as $130tn, making it the single biggest global growth opportunity.


Global advisory committee

A standing committee of the AEF Energy industry committee (EIC). It provides global advisory and related industry insights to the Energy industry committee on how to globally scale-up the operations and impact of the Energy industry in Africa; to promote its global competitiveness and improve its collaboration with science and technology Research Institutions in Africa and other parts of the world. It would also help to build collaborations with other partners in other parts of the world.
It would be made up of the following:

  • 2 Co-chairpersons
  • A Vice chiarman
  • 9-15 other persons
  • Membership would reflect the 5 sub-regions of Africa and the 5 major regions of the world.

Oversight Committee

Would be responsible for the oversight of Energy industry committee. It will work to ensure the continued growth and development of the Energy industry committee in Africa and to promote its continued upscaling within the African region and globally.
It would be made of:

  • Chiarman
  • Vice chiarman
  • 13 other members
  • Membership shall reflect the various regions of Africa and also the various strata of the industry.

Technical Committee

Would be responsible for the review of emerging technical, business, political and related issues impacting on the industry in Africa and advising the Energy industry committee appropriately. It shall have powers to set up various technical and or expert committees to execute various aspects of its assignment related to the industry in Africa with a view to enhancing its growth and development including organizing various meetings for this purpose.
Membership of the committee:

  • Chairman, being Vice- Chairman of oversight committee.
  • Vice Chiarman
  • 7-9 other members, 3 of which must be members of the oversight committee.

Public Private Partnership (PPP) Committee

Would be responsible for the smooth engagement of the Energy Industry in Africa with relevant Government Agencies/regulatory bodies concerned with the setting up and or operations of the Energy industry in Africa. It will ensure continued the good relationship of members of the Energy industry committee and various public agencies concerned with regulation and or operations of the industry in Africa. It would ensure the creation and operation of appropriate platforms for promoting good understanding between the industry members and those of the relevant publics in Africa.
Membership of the Committee:

  • Chairman, being a Vice-Chairman of the oversight committee.
  • Vice-Chairman
  • 7 - 9 other members, 3 of which must be members of the oversight committee.


Nominations are invited for membership of the following committees.

  • Membership of the Global Advisory Committee for the Energy Industry Committee.
  • Membership of Energy Industry oversight committee.
  • Membership of Energy Industry Technical committee.
  • Membership of Energy Industry PPP committee.