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Political, Economic and Environmental
Challenges in Africa:
OGUNLADE R DAVIDSON
Director, EDRC
Lecture at Protestant Academy , Mulheim
International Network of Engineers and Scientists for Global Responsibility
(INES)
March 1, 2002
Energy & Development Research Centre
University of Cape Town
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Contents of Presentation
 Introduction
 Political Challenges
 Economic Challenges
 Environmental challenges
 Prospects for Africa –Sustainable development
 Opportunities in the Energy sector
 Conclusions
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Tunisia
Algeria
Western
Sahara
Libya
Egypt
Mauritania
Liberia
Mali
Niger
Chad
Burkina
Faso
Cote
d’Ivoire
Ghana
Togo
Benin
Senegal
The Gambia
Guinea-BissauGuinea
Eritrea
Sudan
Djibouti
Somalia
Ethiopia
Nigeria
Cantral
Cameroun African Rep.
Rep.
Eq. Guinea
Uganda
Congo
Kenya
Gabon
Rwanda
Burundi
Cabinda
D R Congo
Tanzania
Angola
Seychelles
Malawi
Zambia
Mozambique
Namibia
Zimbabwe
Madagascar
Botswana
Mauritius
Countries of Africa
Swaziland
Lesotho
South Africa
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Historical Impoverishment of Africa
 Inhuman slavery, colonial legacy, and cold war
proxy
 Political independence with economic structures
that fail to cope with the global economic system
 Destroyed existing structures - weak capitalist
class and acute shortage of required skilled
manpower - result in weak states
 Contribution to the world economy - supplier of
cheap raw materials and consumer of
manufactured goods
 No major infusion of financial investments
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Failure after Political Independence
 Countries fail to empower its people for wealth
creation, industrial and entrepreneurial initiatives –
loss of creative potential
 The spirit that led to call independence and the
setting up of OAU lost
 Weak states resulted in military coups - triggered
by Ghana in 1966
 Education investments at wake of independence
(25% of GDP), but beneficiaries stayed away
 Economic decline, reduced capacities and poor
governance reinforcing each other
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Resources of Africa
 Huge mineral, oil and gas deposits, flora and
fauna and unspoiled natural habitat. Basis for
mining, agriculture and tourism – Features most
known
 Ecological assets of rain forests and minimum
industrial pollution – benefit to mankind
 Sites of paleontology and archaeology that
describes the evolution of man – scientific
acceptance
 A variety of rich cultures that can benefit humans
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Environmental Challenges
 Land degradation and desertification (food
security)
 Protection and sustainable use of forests
 Effective management and protection of
biodiversity – rich biodiversity and grasslands
with home for wildlife but only 2-3% global
tourism
 Water management and scarcity – decreasing
rainfall and high dependence on ground water
 Land, air and water pollution – rich fishing
grounds but serious pollution problems
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Integral Elements of Sustainable Development
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What is sustainable development?
Many definitions but useful to think of
SD in terms of challenges:
Clean air
Transport
Clean water
Housing
Food
Jobs
Energy
Waste disposal
Land use
Health care
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Annual GDP growth of Africa, 1992-1999
5
4
Annual (%)
3
2
1
0
-1
1992
1993
1994
1995
1996
1997
1998
1999
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Rate of return (%)
40
70
35
60
30
50
25
40
20
15
30
10
20
5
10
0
0
Africa
L.America
Net private investment
flows (%)
Comparison of rates of return and net private
flows to developing regions, 1996
Asia
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Energy - Development
 Africa requires substantial energy supplies to
satisfy its basic and development needs
 Increasing demand for rural energy access


Rural areas areas are deprived of modern energy services
Dilemma: increase fuelwood difficult due to supply problems
and lack of infrastructure for modern energy supply
 Satisfying urban demand very challenging


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Energy needs of the urban poor significant
Urbanization rate is twice national growth rates
Growing number of cities with population over 1 million
Growing demand for urban lifestyle and modern energy
services
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Energy Sources of Africa
 Africa has diverse and abundant share of global
fossil and renewable energy resources




6.2% of Coal, 7.7% of Oil and 7.2% of Nat.Gas
Few Geothermal sources in East
12% Hydro, East, Central & West
Large quantities of biomass, solar and wind in selected
areas
 Nearly all these resources are under exploited
 Significant economic, technical and environmental
constraints
 Only area globally with growing new oil and gas
finds
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Growth in selected energy parameters, 1980-95
2
1.9
Electricity
Generation
1980=1.0
1.8
1.7
Modern Energy
Consumption
1.6
1.5
Population
1.4
Modern Energy
Production
1.3
GDP
1.2
Woodfuel
Consumption
1.1
1
1980
Source: Base data from OECD & FAO
1985
1990
1995
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Growing Proven Gas Deposits in Africa and are found in
increasing Number of Countries
(11.6)
Figures in bracket is for Africa's total
Others
12
Libya
(8.7)
Nigeria
10
Trillion cu.m
Algeria
8
(5.9)
6
4
2
0
End 1980
End 1990
End 2000
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Environmentally Friendly Energy Future
 Expanded energy services: basic parameters:




Social Equity
Economic viability
Environmentally sound
Institutional cohesiveness
 Diversity of Institutions and financial schemes
 Widening access at increased efficiency
 Development of a portfolio of technology options
 Market creation and stimulation: urban and rural
 Development of non-energy sectors: agriculture,
telecommunications, transport, etc..
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Policy Concerns: International Cooperation
 Improving climate for investments not yet
tapped

High growth rates and Highest rate of return on investments
 Declining ODA and low share of FDI, but
ODA can provide leverage fund support for
many African countries
 Assist creating environment for attracting
investments

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
Institutional reform
Regulations, standards and system of arbitration
Develop local business sector
 Support new alliances of public/private
partnerships
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Conclusions
 Economic-Environment-Development Challenges


Moving out of Poverty
High dependence on natural resources
 Positive economic trends


3% growth in GDP since 1995
Highest rate of return on investments
 Renewed interest in African Affairs



Development of NEPAD
New thinking in financial system - World Bank
Recent EU initiative
 IMPROVED POSITIVE IMAGE OF AFRICA
URGENTLY REQUIRED
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THANK YOU ALL FOR LISTENING
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