Geopolitical developments such as the war in Ukraine have put Africa at the centre of the current energy transition conversation, creating opportunities for African leaders to come to the negotiating table as equals.
Africa’s mineral wealth, renewable resources, human capital and market size could offer significant competitive advantages to international investors looking to diversify their energy interests, says Kelly Alexander, Associate Member of the Centre for Emerging Markets and Consumer Studies at Henley Business School Africa and author of a new white paper, Powering Africa’s growth: the renewable energy landscape.
“This has set off something of a scramble for Africa’s attention. Since last year government officials and businesses – primarily from Europe and the United States – have been arriving on the continent’s shores promising new and renewed energy projects, not only at home, but for export,” she says.
In 2022 Senegal hosted German Chancellor Olaf Scholz, and Poland’s president, Andrzej Duda, both of whom are looking to broker gas deals. The Republic of Congo, Algeria, Angola and Mozambique were visited by Italian government ministers along with representatives from Eni, one of the world’s largest energy companies. Even Zimbabwe, so often left out in the cold where foreign investment is concerned, is being courted for its abundance of mineral resources.
In the white paper, Alexander highlights how this surge of interest potentially upends a centuries-old power structure, and creates an environment where opportunities are rife for business leaders to position themselves as equal partners in the policy-making processes.
“Foreign investment into African energy projects could have enormous economic and social benefits across the continent, but local players need the presence of mind to balance the continent’s needs with those of the rest of the world, or risk deepening their own energy crises and missing the opportunity to engage in a just energy transition,” she says.
“The pressure is on for governments and business leaders to act wisely because although Africa can leapfrog into the renewable age, this cannot come at the expense of the continent’s growth and prosperity.”
Avoiding this scenario requires the formulation of renewables policies that have an impact beyond business, and that address issues of poverty, inequality and unemployment. It also requires a clear-headed understanding of the players in the energy space. In the white paper Alexander posits four categories of thinkers, light-heartedly dubbed the armadillo, the octopus, the ox and the Labrador. Each group, she says, demonstrates advantages and disadvantages and the typology is offered as a useful tool for business leaders as they look to build coalitions and lead diverse teams in the renewable energy landscape.
“Armadillos are protective of fossil fuels, believing that the cost and efficiency of even a bundle of renewable alternatives is too complex, unreliable and untested for economic growth and social stability. Octopi are the enablers who draw from multiple sources and partnering widely across domains to deliver innovative solutions. Oxen put in the hours and plough ahead on projects. Labradors, not surprisingly, are the optimists. Future thinkers with an eye on the renewables prize, they are loyal to the idea of a renewable future, can enable us to think differently, and visualise opportunities we may otherwise dismiss.”
By understanding the sentiments that drive different thinkers in the energy landscape, leaders can be empowered to draw on the strengths of the groups and minimise conflict within teams, explains Alexander. “Building a shared and inclusive vision that transcends the objectives of each group can assist in building synergies in projects.”
The road ahead may be littered with potholes, but the continent has an opportunity to take control of the energy transition to develop advanced technologies and new industries, and to establish global partnerships that could bring about significant change to people’s lives, continent-wide.
“Africa has reached a seminal point in its development and thinking and a new mindset is needed, which means a new approach to learning and the development of leaders is critical”, says Jon Foster-Pedley, dean and director of Henley Business School Africa. “Our white papers attempt to shine a spotlight on what we deem to be key considerations impacting leadership and business on our continent, with the aim of equipping those in the broader Henley Business School Africa family with the will and the way to build a better Africa.”
From a business perspective there is almost unlimited potential for impact, growth, development and improvement across Africa, stresses Alexander, “But leaders will need to proceed with clear-headed caution. Past experiences have shown us that where economic activity is skewed towards resource extraction, this creates dependencies and vulnerabilities in economic systems.
“Business and government must work together then to co-create workable policies that create clarity and certainty for investors but also ensure that the benefits that can be gained from clean energy reach all Africans,” she concludes.
Download the full whitepaper <here>.