/ 26 July 2023

Paving the way for a sustainable energy future

According to Mohamed Adow, climate, energy and development provisions must be found that can rally behind Africa’s interests. (Photo by Rodger BOSCH / AFP)

From 27 to 30 June 2023, stakeholders from across Africa and beyond converged in Cape Town for the Annual Extractive Industries Workshop. Under the theme “Taking Action on Energy Transition”, this four-day event served as a crucial platform for national audit institutions, analysts, policy and industry experts, as well as civil society representatives, to discuss the challenges and opportunities of transitioning to renewable energy sources in Africa. 

This also happens to be the subject of our latest Africa in Fact quarterly publication. The workshop, organised by the African Organisation of English-speaking Supreme Audit Institutions, in partnership with Good Governance Africa (GGA), the African Development Bank and SAI Norway, underscored the pressing need for collective action to address the complexities of the energy transition while promoting a just and equitable future.

As the global demand for clean energy surges, many African nations are at a crossroad. The workshop highlighted that a renewables-based energy transition offers vast socio-economic benefits, including improved energy access, job creation and enhanced energy security. By embracing renewable energy sources, Africa can leapfrog fossil fuel technologies, charting a low-carbon growth trajectory aligned with the Paris Agreement.

The energy transition calls for a paradigm shift in the extractive industries, with a focus on sustainable resource management and responsible mineral extraction. Participants agreed that diversifying the energy mix is pivotal to achieving a greener future but this had to be executed in a truly just manner. 

The discussions explored the significance of good governance, data transparency, and cross-border collaboration in shaping an inclusive energy transition that leaves no one behind.

The just energy transition

At the heart of the discussions was the concept of the just energy transition. Stephen Buchanan-Clarke, head of human security and climate change at GGA, eloquently presented the case for an energy transition that prioritises social justice and reverses the resource curse. He drew extensively on fieldwork conducted by GGA at the site of a new fossil fuel project in Zimbabwe. Vulnerable communities, often disproportionately affected by the negative impacts of extractive industries, must be included in cleaner energy alternatives.

Dr Ross Harvey, director of research at GGA, underscored the significant role of supreme audit institutions (SAIs) in this transition: “SAIs play a critical role in shaping and sustaining desired norms of transparency, accountability and participation — the three pillars of good governance. We must invest in strengthening these institutions so that they create credible threats against defection and rewards for good performance.”

According to the World Development Indicators, sub-Saharan African countries have made progress in increasing electricity access and clean fuel adoption, with access to electricity rising from 28.26% in 1997 to 48.23% in 2020, and clean fuel access from 8.97% in 2000 to 17.64% in 2020. However, challenges remain as a significant portion of the population (especially in rural areas) still lacks energy access, hindering economic growth and contributing to indoor air pollution.

The region’s heavy reliance on traditional biomass fuels leads to deforestation and renders it an outlier in net forest depletion. Amid calls for exploiting fossil fuel resources, concerns arise about the resource curse and the risk of locking countries into unsustainable trajectories.

A just energy transition entails a transformative approach that considers the well-being of local communities, workers and the environment. It calls for inclusive policies that safeguard jobs while fostering clean-energy job opportunities and tapping into global value chains. 

As part of the workshop, the technical excursion to the solar power plant on Robben Island exemplified the practical value of a viable mix in considering an energy transition. Participants witnessed first-hand the transformative impact of renewable energy on energy access and environmental sustainability. Such practical experiences inspire collective action, fostering collaborations that transcend borders and sectors.

Data transparency and beneficial ownership

Karabo Rajuili, director of country programmes at Open Ownership, and Kirsten Pearson from Transparency International emphasised the crucial role of data transparency, especially regarding beneficial ownership, in fostering accountability in the extractive industries. 

Too many shell companies with anonymous owners operate in the space. Beneficial ownership requirements help auditors to identify the actual people who benefit from extractive projects. Access to accurate and reliable data is essential for making informed decisions and promoting responsible resource governance.

Data transparency was highlighted as a powerful tool to combat corruption and illicit financial flows. By mapping global legal entity identifier foundation data to beneficial ownership data standards, stakeholders can identify and address potential governance gaps. 

Transparent data sharing enables governments, auditors and civil society to hold industry stakeholders accountable for their actions, paving the way for a more responsible and sustainable energy future.

SAIs as champions of accountability

The critical role of SAIs in the energy transition was acknowledged as they play a pivotal role in promoting transparency, accountability and good governance in the extractive industries. The current efforts of SAIs in conducting impactful audits and ensuring that energy sector policies align with the principles of sustainability and inclusivity were recognised.

Countries shared their experiences and best practices with Kenya’s SAI perspective on performance audits serving as an inspiring example. By sharing their progress, SAIs not only demonstrated their commitment to a just energy transition but also fostered a culture of learning and collaboration among nations.

The need for responsible mineral extraction was identified as a critical factor in the energy transition. Sustainable practices are paramount to protect the environment, preserve biodiversity and ensure that minerals are sourced ethically. 

Building a greener future together

In the face of geopolitical events leading to short-term, and somewhat hypocritical, fossil fuel reliance in Western nations, it is essential for African countries to prioritise sustainable energy solutions. 

Localised energy systems and renewable sources offer practical and resilient alternatives. By embracing localised energy solutions and reducing dependence on fossil fuels, sub-Saharan Africa can mitigate environmental impacts and move towards a cleaner, greener future. Collaborative efforts among governments, international organisations and the private sector are vital in achieving a brighter and more equitable energy landscape for the region.

Efforts to integrate environmental stewardship, community engagement and sustainable development into mining operations were showcased. These efforts aim to ensure that the extractive industries can contribute positively to the energy transition, enhancing the resilience of clean energy technologies. 

It remains important for communities to participate in decision-making processes and that their voices help to shape the energy transition.

To accelerate the transition, African states should prioritise investments in decentralised energy solutions that cater to local needs and aspirations. Furthermore, promoting clean fuel adoption and reducing reliance on fossil fuels are essential for improving public health and mitigating the impact of climate change.

Collaborative efforts among governments, international organisations and the private sector are crucial in closing the energy gap and ensuring a sustainable energy future for all. By harnessing its vast renewable energy potential and embracing innovative solutions, Africa can pave the way to a cleaner, greener and more equitable energy landscape.

The Annual Extractive Industries Workshop 2023 served as a milestone in shaping a sustainable energy future for Africa. By embracing a just energy transition, promoting data transparency and encouraging responsible mineral extraction, African nations can pave the way for a greener and more equitable future.

Chrissy Dube is head of governance insights and analytics at Good Governance Africa.