Energy transition ‘meaningless’ for 600 million Africans

Ramokgopa is part of the South African delegation to the 55th annual meeting of the World Economic Forum in Davos-Klosters, Switzerland.

Speaking to delegates on Tuesday, Ramokgopa pointed out that 600 million people across Africa still lack access to electricity, making the concept of energy transition meaningless for many.

He noted, however, that technological advancements now make it possible to provide "faster and more affordable connections in rural areas", reducing reliance on costly infrastructure.

"The first one is that the question of the energy dilemma has got regional or geographic manifestations,” Ramokgopa said. 

“I mean, if you come to the continent, we have about 600 million people who don't have access to electricity, and therefore, the conversation about the transition essentially is meaningless; it is non-existent because they don't have access to electricity.  

“But we also see opportunities," he added. 

Ramokgopa believes Africa’s mineral wealth could be key to the global energy transition.

“We know that Africa is home to about 30% of known mineral resources.

“So the ability for us to be able to exploit these minerals in the context of supporting the transition, I think, is going to be key because we're likely going to broaden the flow of industrial production, and in that way, we are able to power the economies of those countries, get people out of poverty, ensure that they've got skills to participate in the new economy.

"So the question is, how do you exploit those resources? So I think the point made earlier on is that first, you need the capital because this is a capital-intensive industry, and we know that the balance sheets of these countries are not sufficient for them to self-finance.  

"So you need to create a dispensation where you are able to tap into the deep liquidity that is sitting with the private sector for those investments to happen. And those investments must happen close to the source because what we have been doing over time we have been exporting opportunities. So essentially employment opportunities," he said.

Ramokgopa acknowledged the role of unstable political environments in the lack of investment in some African countries.

He called on African leaders to prioritise governance reforms to help the continent become more competitive in the global energy economy.

"So the relationship is that of extraction. So you take these mineral resources, beneficiation and value addition take place in a far-flung area. So I think there has to be that conversation, especially with the major industrial powers, to ensure that you support the growth of these countries, invest in them and ensure that the beneficiation happens closer to the source.  

"But for that to happen, there has to be the ability and in many of these jurisdictions. Unfortunately, we have seen unstable political environments that make it difficult for investors to come into those spaces and make the necessary investments.

"And that's why we are having this conversation on the continent. They need to ensure that we are able to entrench deep in democracy, and we have seen that a number of elections have taken place on the continent," said  Ramokgopa.

ALSO READ