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Eskom
Eskom’s Hendrina power plant in Mpumalanga province came into operation in 1970. (Photo via AFP)

Once a global leader and the continent’s leading energy producer, in a little over a decade South Africa’s electricity public utility has fallen into a pattern of disrepair that was once unimaginable.

The country saw its first blackouts in 2007, at a cost to the economy of just under US$1 billion. By 2019, the electricity lost to load shedding* had escalated to 1,352 gigawatt hours (GWh) and a total of 530 hours, up from the 176 GWh shed in 2007.

Load shedding is structured incrementally, increasing from Stage 1, where 1,000 megawatts (MW) are removed from the grid, up to Stage 8, where up to 8,000 MW would be shed. South Africa hit Stage 6 in 2019, its highest stage yet, with 6,000 MW taken off the grid at a time.

These losses come at a cost. Energy analyst Chris Yelland has calculated that each stage of load shedding cost the South African economy R1 billion (US$60 million) per day, per stage. For example, a day spent at Stage 3 load shedding would lead to a loss of R3 billion (US$180 million) over the 24-hour period. In 2019 alone, South Africa’s electricity instability cost the country somewhere between US$3.6 billion and US$7.2 billion.

 

South Africa still accounts for nearly a third of the continent’s installed capacity

 

The paradox of the South African case is that the country has increased its shortages tenfold over the past decade and increased its energy insecurity, yet it still accounts for nearly a third of the continent’s installed capacity, with about 52 gigawatts (GW). Relative to its local neighbors, South Africa is still doing fairly well with regard to government-provided energy supply. However, that’s not the neighborhood it’s trying to compete in, and that’s also not the system its economy was designed for.

The South African economy was built on an alliance between cheap energy and mining. Eskom’s initial model of operation prioritized the security of energy supply at all costs. This changed in the 1980s when the National Party government removed the organization’s internal capital development fund and increased Treasury’s oversight of new investments. Reforms introduced in the 1990s created further confusion in the decision-making process around new capacity, and the problem remains unresolved more than twenty years later. So, while there has been awareness since 1998 of the impact of Eskom’s ageing infrastructure, to date, no credible plan has been provided to address it.

The public utility is now characterized by ageing, poorly maintained infrastructure and severe delays in the construction of its new power plants.

 

COVID-19 has provided some relief in terms of demand 

 

Eskom started 2020 in poor form: by the end of January, it had already shed 143 GWh, nearly as much as the 2007 total. The COVID-19-induced lockdown, introduced in late March, reduced electricity demand significantly and led to a decline in outages. This trend began to change as the economy started opening up in June, leading to a series of blackouts.

Although COVID-19 has provided some relief in terms of demand, it has also thwarted some of the long-term maintenance plans set out my Eskom. The public utility had previously scheduled to take 2,000 MW off the grid for nine months to do a full rebuild from July 1. However, travel restrictions caused by the pandemic have limited access to scarce technical skills and resources to pursue the detailed maintenance.

In mid-July, the German Embassy, working together with the Ministry of International Relations and Cooperation and the South African–German Chamber of Commerce and Industry, chartered a Lufthansa flight to bring a team of German technical experts to South Africa. The experts, invited by German businesses operating in South Africa, are expected to provide technical expertise that cannot be found locally, such as upgrading high-tech production facilities in the Eastern Cape, and supporting Eskom in the maintenance and upgrade of its power plants.

According to the first issue of the 2020 OECD Economic Outlook—a biannual analysis of major economic trends and prospects—South Africa’s economic trajectory in a post-COVID-19 landscape will be heavily impacted by its ability to address the structural issues of its economy, notably the rising costs and instability of electricity supply.

Over the past few years, Eskom has flirted with a number of technologies in an attempt to stabilize the grid, including nuclear, but it is uncertain where the country’s next major energy investment will be. Thus far, the only independent producers to provide power to the grid are those under the Renewable Energy Independent Power Producer Procurement (REIPPP) program: 6,329 MW of renewable energy has been procured to date, of which 3,876 MW is currently connected to the grid.

South Africa faces a choice in the near future: either feed more power into the grid, or create an economic system less reliant on a centralized electricity provider.

 

* Load shedding describes the process of strategically cutting power to specific areas in order to stabilize the grid when demand outstrips supply.

 

Nchimunya Hamukoma is an economist and policy strategist (@N_Hamukoma).

 

Claude Borna, director of the Sèmè City Development Agency (Yanick Folly/AFP)
Claude Borna, director of the Sèmè City Development Agency (Yanick Folly/AFP)

Benin is set to open Sèmè One, a tech start-up incubator that is part of the larger Sèmè City, envisioned to be a high-tech regional innovation center. Located near the Nigerian border in the commune of Sèmè-Kpodji, this “smart city” was announced two years ago by President Patrice Talon as part of the Revealing Benin development program. The Beninese government aims to turn the country into a West African hub for advanced technology, akin to Paul Kagame’s efforts in Rwanda to transform the capital Kigali into the “Singapore of Africa.”

Planned to be fully operational by 2030, Sèmè City will welcome students and entrepreneurs from across West Africa, who will have access to research centers and laboratories.

Responding to COVID-19, twenty-nine-year-old Donald Tchaou and five friends approached the Sèmè City Development Agency with an idea to develop a mobile app to enforce social distancing and help with contact tracing. Not only were they given access to Sèmè City’s resources, but they also benefited from personalized coaching throughout the development process.

Sèmè City’s director is Claude Borna, a Beninese native who obtained degrees from the University of California, Los Angeles, and McGill University, and worked for Deloitte and Amazon, among other corporate groups, before returning to Benin in 2016.

 

miner zimb
A sign at a Zimbabwean mine makes it clear that firearms are not allowed. (Photo via AFP)

Two Zimbabwean workers at a gold mine on the outskirts of Gweru in central Zimbabwe were shot by their Chinese boss on Sunday, June 21. The incident has rekindled long-standing tensions about Chinese nationals living in the southern African country.

A court affidavit submitted by the Zimbabwean police alleges that Zhang Xuelin shot Kenneth Tachiona five times, reportedly in both thighs, and another employee, Wendy Chikwaira, had his chin grazed by a bullet. Workers at Reden Mine in Gweru had confronted Xuelin over his alleged failure to pay their wages in US dollars, as had been agreed previously, according to the affidavit. US dollars are highly sought-after in Zimbabwe, which has experienced repeated cash shortages and inflation spikes since its currency was effectively abandoned in 2009.

The Gweru case brings to mind a 2010 shooting in neighboring Zambia. Two Chinese mine managers were charged with the attempted murder of eleven workers at the Chinese-owned Collum Coal Mine in Sinazongwe after a protest over pay and conditions became heated. Despite being a decade apart, the two cases demonstrate an ongoing pattern of African workers feeling disgruntled by the systemic imbalance of their relationship with Chinese interests.

 

Imbalance

The number of Chinese nationals in Africa has increased over the past two decades. At least 10,000 Chinese nationals now live and work in Zimbabwe, according to the Brookings Institute. The population in Zambia is significantly higher. Many of these migrants are employed as contractors for Chinese companies delivering extensive infrastructure, construction, manufacturing, and mining projects. This model of investment frustrates African executives, commentators, and workers, who argue that it deprives locals of employment and training opportunities. There is, however, evidence to suggest that Chinese firms employ, pay, and train Africans at similar rates as non-Chinese companies.

That sentiment reflects more deep-seated misgivings about the equity of large deals that African governments sign with Chinese companies. These include loans, construction projects, and extraction rights for natural resources. For example, in April 2019, Chinese firm Tsingshan committed to investing US$2 billion to mine chrome, iron ore, nickel, and coal in Zimbabwe, cementing China’s place as the country’s largest foreign investor. At the same time, Shanghai Construction Group is constructing a new US$140 million six-story parliament building, apparently a donation from the Chinese government. But many Zimbabweans are skeptical of such gestures. Few regard it as unadulterated altruism. And the lack of transparency fuels speculation.

 

Postcolonial Partnership?

China’s extensive leverage in Zimbabwe, and elsewhere, does not look like the postcolonial partnership promised in the 1970s. Indeed, the legacy of racist settler colonialism provides an alarming comparison for Zimbabweans when they hear stories of managers shooting employees or, as happened in Zambia recently, Chinese vendors denying service to black customers.

This is a particularly sensitive time for Sino-African relations. In April, reports of African migrants in Guangzhou, home to China’s largest African community, being targeted for forced testing and quarantine, evicted from their accommodation, and denied hospitality went viral and sparked outrage on social media. Human Rights Watch accused Guangdong authorities of “textbook” discrimination. Many feel that it is one rule for the Chinese in Africa and quite another for Africans in China.

The COVID-19 crisis has also elevated concerns about debt, at a time when economic paralysis is hampering governments’ ability to maintain payments. About 20 percent of African government external debt is owed to China. According to reports, China has offered relief from interest-free loans, but these loans make up less than 5 percent of its total lending.

In a recent interview, former Zimbabwean minister Gordon Moyo, now director of the country’s Public Policy and Research Institute, described China’s lending as “illegitimate” and said the East Asian country was at risk of being “a new imperialist.”

 

Money Matters

Having been shot repeatedly in both legs, Kenneth Tachiona faces the prospect of being disabled for the rest of his life. But with a wife and five children, his concerns are very pragmatic. In an interview with VOA, he said: “Of course I want the law to take its course, but I’m now disabled, and for me, the most important thing is to be compensated adequately.” Money being his most pressing concern reflects the same hard realities facing his government.

President Emmerson Mnangagwa has emphasized the importance of impartial justice in this case. Likewise, the Chinese embassy declared its respect for Zimbabwe’s right to handle the situation “in accordance with the law.” At the same time, however, they asked to see Zimbabwe “protect the safety as well as legitimate rights and interests” of Chinese nationals in the country. President Mnangagwa echoed the sentiment and did not accept the view that the shooting was reflective of “systemic and widespread” abuse by Chinese employers, as some prominent civil society groups have claimed.

With mounting debt, a health crisis, and uncertain support from the West, there is little prospect of Zimbabwe—or any of its neighbors—untangling itself from Chinese interests.

 

Jesse Samasuwo is a London-based analyst writing and researching international affairs, primarily focused on energy, trade, and politics.

 

Nigeria President Muhammadu Buhari attends the fifty-sixth ordinary session of the Economic Community of West African States in Abuja on December 21, 2019.  Kola SULAIMON / AFP
Nigerian president Muhammadu Buhari attends the fifty-sixth ordinary session of the Economic Community of West African States in Abuja on December 21, 2019. (Kola Sulaimon/AFP)

Earlier this week, Nigerian President Muhammadu Buhari announced the launch of the US$2.8 billion Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project, which he promised would significantly improve power generation for domestic use and gas-based industries. In addition, the pipeline is anticipated to bring both greater infrastructure investment and employment to towns along the pipeline’s route, benefitting the provinces of Kano, Kaduna, Niger, Abuja, and Kogi State.

Nigeria has begun work on the first 200 kilometers of the 614-kilometer-long AKK pipeline route, which forms part of the planned 1,300-kilometer-long Trans-Nigeria Gas Pipeline, a project largely financed by China Export & Credit Insurance Corporation and several Chinese banks.

 

Nigeria formally joined China’s Belt and Road Initiative in February 2019

 

Buhari’s promise of economic prosperity arising from this project underscores Nigeria’s slumping energy industry and regular power outages despite being Africa’s largest oil producer. The COVID-19 pandemic in particular took a heavy toll on the industry: at the conclusion of the first half of the 2020 fiscal year, oil and gas companies listed on the Nigerian Stock Exchange reported a loss of about US$457.8 million.

China’s strong presence on this project reflects its broader infrastructure diplomacy in Africa, enacted through its Belt and Road Initiative, which Nigeria formally joined in February 2019.

 

IAEA
Empty chairs are seen in front of the logo of the International Atomic Energy Agency prior to a meeting in Vienna on August 1, 2019. (Hans Punz/AFP)

Ghana recently completed phase one of a three-part process to develop the infrastructure for producing nuclear power in coordination with the International Atomic Energy Agency. The focus of the first phase was on conducting a series of studies on the rationale for and feasibility of introducing nuclear power to the national and West African energy grid, a tall order considering the steep costs of constructing and maintaining nuclear reactors.

Ghana’s current installed generating capacity of 4,132 MW comprises hydroelectric power (38 percent); thermal power fueled by oil, natural gas and diesel (61 percent); and solar power (1 percent). Actual availability, however, rarely exceeds 2,400 MW due to various factors, including inadequate fuel supplies. To meet the energy demands of its growing population, currently at about 28 million, requires the country to rely on the broader West African energy grid to supplement the shortfall.

Phase Two of the nuclear plan will include meetings with potential stakeholders, developing a government financing scheme and a framework for nuclear waste disposal protocols, and determining suitable sites for construction. Dr. Robert B. M. Sogbadjie, coordinator of the Ghana Nuclear Power Program, confirmed during a press conference that four sites have already been picked out, but did not disclose their locations. Phase two is anticipated to begin in 2024, with construction to be completed by 2030.

 

South Africa has had a nuclear power plant since 1984

 

Should Ghana succeed in this endeavor, it would make it only the second country in Africa to have nuclear power, alongside South Africa, which has had a functioning nuclear power plant—providing 5 percent of the country’s total energy output—since 1984. Furthermore, Ghana’s initiative on nuclear power could incentivize other African nations to do so as well, moving the continent away from fossil fuels while meeting the energy needs of a growing population.

 

River in the Pendjari National Park in the dry-season
A river in Pendjari National Park, Benin, in the dry season. (Photo: Wikimedia Commons)

 

The Beninese government has taken great strides in its goal of expanding access to drinking water to about 4.5 million people living in rural areas. The authorities recently created the National Rural Drinking Water Supply Agency, and on May 20 the cabinet approved the signing of agreements between the agency and the country’s seventy-seven municipalities.

The federal government has set the goal for itself of achieving universal access to clean water by 2021, nine years before the deadline set by the United Nations to achieve the Sustainable Development Goals. Among others, the authorities say six projects are in progress in rural areas, including the sinking of about 200 boreholes, that are expected to benefit more than 220,000 people.

 

Benin has demonstrated some of the more effective water management programs in West Africa

 

Despite regional disparities in terms of access to potable water and a noticeable urban-rural divide, Benin has demonstrated some of the more effective water management programs in West Africa. A 2011 country status overview report from the African Ministers’ Council on Water found that Benin would reach 73 percent total coverage by 2015 (which it ultimately exceeded back in 2012), a marked improvement from 51 percent at the end of 2008.

Whereas access to drinking water has greatly improved, Benin still lags behind in ensuring sanitation services for all its people, which will require greater financial investment from the government and international donors to reach the targets of the Sustainable Development Goals.

 

 

Undersea Cable

 

A multinational consortium of telecommunications companies—including Facebook, China Mobile International, MTN Global Connect, Telecom Egypt, and Vodafone—announced the construction of a new undersea fiber-optic cable that will connect sixteen African countries, Europe, and the Middle East. Named 2Africa, the 37,000 kilometer-long communications cable is scheduled to go live in 2023 or 2024.

 

Africans pay some of the highest data rates in the world.

 

In March, two undersea cables serving Africa experienced breakages that drastically reduced Internet connectivity for days as repairs were made. The addition of 2Africa will help improve Internet access for millions of Africans, and mitigate disruptions should other cables experience failures in the future. Such disruptions are not only frustrating for Africans, who pay some of the highest data rates in the world, but also have a negative impact on the African economy.

A 2017 report by the Collaboration on International ICT Policy for East and Southern Africa (CIPESA) concluded that intentional Internet shutdowns in twelve countries between 2015 and 2017 cost sub-Saharan Africa more than US$237 million. Unforeseen connectivity disruptions naturally can have far greater negative impact on national and regional economies.

 

Ghana Railway
Maintenance staff walk along the railway line that connects the Ghanaian capital Accra and the city of Tema. The 25-kilometer route reopened in late January 2020 after rehabilitation.

 

The government of Ghana believes that investment in railway infrastructure will put the country on the fast track to economic development.

Construction on the first railway line in Ghana started in 1898, when the country was under British colonial rule. The line—between Tarkwa, a gold-mining center, and Sekondi on the coast—opened in 1901, and in the next two years it was extended north from Tarkwa to Kumasi, the capital of the Ashanti region.

When Ghana gained independence in 1957, it had a rail network of nearly 1,000 kilometers, but today only about a sixth of it remains in operation. Derailments and slow speeds are a common occurrence.

 

Master Plan

In December 2013, the government of Ghana released a railway master plan, setting out six phases of development. Targets included the rehabilitation of the existing narrow-gauge network, and the construction of new lines—built to standard-gauge specification—to link all regional capitals and ultimately connect Ghana with its neighbors, Côte d’Ivoire, Burkina Faso, and Togo. This would add more than 4,000 kilometers of track to the network, at a projected cost of US$23 billion.

The plan has received the support of successive administrations.

In 2017, President Nana Akufo-Addo established the Ghana Rail Authority by removing the components of the Ministry of Transport related to railways. The newly formed Ministry of Railway Development has two implementing agencies, the Ghana Railway Development Authority (GRDA) and the Ghana Railway Company Ltd (GRCL), the owner of the rail infrastructure and the operator of the railway routes, respectively.

 

Progress

The first phase of the plan involved completing priority projects over a four-year period from July 2016 to July 2020. The rehabilitation of the line between Accra and the Port of Tema has been completed, and the route reopened in January with a passenger service for 600 people. The line also links free zones in the area to the sea port, with some facilities specifically designed to take advantage of the railway link between the two cities.

The Takoradi–Tarkwa line is currently in development.

Earlier this year, South African state-owned rail and freight operator Transnet signed an agreement with the GRDA and the GRCL to develop a 66-kilometer standard-gauge railway line alongside the existing line in the Western region, between Takoradi and Tarkwa. The line is crucial for transporting freight, mostly for the mining and agriculture sectors.

 

Financing Sources

Not all of the key investment in Ghana’s railway service has come from the government. Private sector initiatives, such as the completion of the first domestic facility for the production of concrete railway sleepers (as opposed to wooden sleepers) suggest that private companies are positioning themselves to take advantage of the railway boom.

Additional financing sourced through build-own-operate-transfer agreements, barter agreements, and public-private partnerships is integral to the success of the plan, says Richard Dombo, CEO of the GRDA. There has also been considerable international appetite for rail investment in the country. They have had discussions, for example, with steel producer ArcelorMittal about the right to extract iron ore at Sheini to a value equal to the cost of constructing a rail link between the mine and the coast for exporting the ore.

Ghana’s railway lines have historically been “engines of growth”, Dombo says, and the transport sector remains crucial for future development.

 

Tema to Tangier: Policy vs Practice
The Port of Tema handles 80 percent of Tema’s annual container volume.

 

In 1995, both Ghana and Morocco introduced programs to develop free zones (FZ), also called special economic zones (SEZ), as a part of their industrial strategies. Nearly twenty-five years later, Morocco’s industrial success has become a model for other emerging economies, whereas Ghana’s efforts have produced unremarkable results.

Ghana embraced the free-zone model to bolster its economic performance in the mid-nineties. The Ghana Free Zone Programme (FZP), introduced with the purpose of making Ghana a “Gateway to West Africa”, was designed to promote the processing and manufacturing of goods. Located along the coast of the Gulf of Guinea with two seaports, Ghana is strategically placed to serve the landlocked Sahel countries and serve up to 300 million people in the ECOWAS market.

Ghana’s FZP offers a range of incentives, including tax holidays (ten years) and tax exemptions (withholding, income, and direct and indirect import taxes and levies), as well as relief from double taxation. The nature of the program is unique because, unlike many others, it uses both an enclave and single-factory approach, which earned it “one of the best designed, most flexible, and most innovative” FZPs in Africa, according to the World Bank.

Among many development projects, the Tema Export Processing Zone (EPZ), the 500-hectare multipurpose industrial park east of Accra, is the country’s only well-functioning free zone enclave. Located in the heart of Ghana’s industrial city, Tema hosts various companies in cocoa processing, prefabricated housing materials, and plastic household products. The enclave’s proximity to the largest port terminal and quality road links makes it an ideal location. Yet, after decades in operation, the Tema EPZ, like Ghana’s FZPs, has yet to develop world-class status or demonstrate exponential growth in promoting economic growth.

 

Tanger Med
An aerial view of Tanger Med Port Logistics Free Zone, a cargo port on the Strait of Gibraltar, 40 km east of Tangier, Morocco. (Photo courtesy of Wikipedia Commons)

 

The program has no doubt contributed to the Ghanaian economy, but it hasn’t lived up to its regional aspirations.

 

In 2017, up to US$172 million capital was invested in Ghana’s FZP. In the same year, Ghana’s FZP accounted for nearly 30,000 in employment, and yielded a total production value of US$1.3 billion, some 2.5 percent of GDP. Exports from the zones contributed some US$1.5 billion, an estimated 2.9 percent of the country’s GDP. The program has no doubt contributed to the Ghanaian economy, but it hasn’t lived up to its regional aspirations.

Morocco introduced legislation governing special economic zones (SEZ) in the same year Ghana launched its FZP. Morocco’s program made the zones exempt from customs regulations and foreign trade and exchange control restrictions, and provided a range of fiscal incentives in line with international best practices.

Morocco has a number of free zones across the country, but the Tanger Med Zones (TMZ), established in 2003, is often viewed as the jewel in its crown of SEZ success. Occupying 3,000 hectares, TMZ comprises a number of individual zones, including Tanger Med Port Logistics Free Zone, Tanger Free Zone, Tanger Automotive City, Renault Tanger Med, Tetouan Shore and Tetouan Park, and the Findeq Commercial Free Zone. The growth of the TMZ has been supported by the rapid development of the port to world-class standards as well as a complementary strategic infrastructure network that includes a large-scale container terminal, and high-quality roads and rail links to the rest of the country.

 

The success of Tanger Med Zones can be attributed to five pillars, one of which is clear political leadership.

 

Thus far, TMZ has attracted 750 companies, and created 65,000 direct jobs and an additional 30,000 indirect jobs through Renault Tanger Med alone. In 2016, the zone generated nearly US$6 billion, 25 percent of Morocco’s total exports. Since its inception, the zone has attracted US$3.8 billion worth of investments, totaling 8 percent of Morocco’s FDI inflows since 2003, with the majority of that investment through Renault’s establishment of its Melloussa factory in 2012. The ability of TMZ to secure a long-term contract with Renault has had a significant impact on the success of not only the zone but also the national economy and the country’s image as a global player in the automotive industry.

 

 

By 2018, TMZ was processing 3.5 million 20-foot equivalent units (TEU) of cargo capacity, whereas Tema was only processing 836,000. Both Ghana and Morocco introduced policies that conformed to international best practice on free zones in 1995, so why is Tema not Tangier?

In 2017, a comparative study of special economic zones by the Organisation of Islamic Cooperation provided an interesting analysis as to why TMZ has been so successful. According to the study, its success can be attributed to five pillars: one, clear political leadership; two, infrastructure investment; three, one-stop shop and the reduction of red tape for investors; four, market access, through its geographical location and strategic free trade agreements with the European Union and the United States; and five, a trained labor force with priority for technical skills geared to the specific needs of the various industries. In addition to these pillars, TMZ was able to benefit from a favorable macroeconomic enabling environment

The success of TMZ serves to highlight Tema’s inability, so far, to meet the criteria articulated by the Organisation of Islamic Cooperation in its assessment of the Moroccan port. Though both Tema EPZ and TMZ fall under the broad category of free zones, TMZ shows the modern trend of moving away from a single export processing zone toward a more multi-sectoral development approach.

In addition to differences in their policy thrust, Ghana faces a number of constraints to the successful implementation of its free zone program. The level of infrastructure to support the Tema EPZ is severely limited and part of the country’s larger infrastructure challenge. Ghana has experienced a prolonged energy crisis that has led to high energy tariffs and frequent power cuts, costing the nation an average of US$2.1 million in lost production daily. Even within the free zone, land rights and ownership remain an issue that has deterred investors and strained the development of industrial enclaves. Thus far, Ghana has been unable to create a competitive advantage, and many of the goods produced in Ghana face intense competition from less expensive imports. In addition to the more practical challenges of running a functional free zone program, there is little data on the specific EPZs’ operations, which makes it difficult to monitor and assess performance, and to present an updated source of information for potential investors.

 

“Investors are attracted by the integrity of government.” — Ngiam Tong Dow

 

As for the clear politics, Ghana’s FZPs have not always had the commitment of the highest level of political authority. As of late, things may be changing. The recent refocus on industrialization through the One District One Factory policy, which aims to generate some 350,000 jobs, for instance, presents a window of opportunity for Ghana to revamp its political will, and commitment, to ensuring the success of the FZPs as part of its industrialization efforts. Designating the Western region’s industrial park, The Westpark, to foreign investors for development and operation is likely an indication of more interest in this regard.

Similarly, the growing national consensus around the importance of technical and vocational education and training (TVET) may present opportunities for building a more trained and technically proficient labor force to serve the needs of FZPs.

Most importantly, as the renowned Singaporean top civil servant Ngiam Tong Dow noted, “Investors are attracted by the integrity of government.” Endemic corruption in Ghana at the state and private sector levels needs to be addressed. In addition, the cumbersome nature of state bureaucracies requires a major overhaul to allow for more efficient processes and procedures. Until addressed, the levels of investment needed to fill its enclaves and factories are unlikely to meet expectations.

Though initially lauded as an innovative policy, the Ghana experience shows that you need more than a sound plan to create large-scale change in the economic makeup of the economy. As seen in the Moroccan case, success is much more closely aligned with a coordinated effort to create a conducive environment that attracts and grows businesses, addressing the fundamentals of infrastructure, political leadership, and long-term strategy. With a solid implementation strategy, Ghana can narrow the gap between policy and practice, and clear the path from Tema to Tangier.

 

Marie-Noelle Nwokolo is a researcher at the Brenthurst Foundation. She writes in her capacity as an enthusiast and citizen of Ghana, a place she hopes to help create change for a better future.

Nchimunya Hamukoma is an Econonomist & Policy Strategist based in Johannesburg. She is passionate about African infrastructure investment and urban development and has worked in North, Southern and West Africa.

 

 

Aerial view taken on December 16, 2013 in Inga shows the Inga 1 dam and Inga Falls on the Congo river. MARC JOURDIER  AFP
Aerial view taken on December 2019, shows the Inga I dam and Inga Falls on the Congo River. (MARC JOURDIER /AFP)

 

If completed, the Grand Inga Dam on the River Congo will be the largest hydroelectric power-generating facility in the world, and a leading US company looks set to take a critical role in a project that could bring electricity to millions of people across Central Africa.

“Inga II is part of the planned Grand Inga hydropower scheme, which, at 40 GW [gigawatts], would be the world’s largest and would be almost twice the size of Three Gorges in China. GE is helping to power the DRC now with Inga II and possibly much of Africa with Grand Inga,” reads a statement on the website of GE Renewable Energy, a division of General Electric.

On a continent where nations are starved for electricity to power their emerging economies, the Grand Inga will play a vital role. The construction of the multiple dams and transmission infrastructure needed for Grand Inga is estimated to cost about US$80 billion. Last month, GE South Africa Pty. Ltd. and the government of the Democratic Republic of the Congo (DRC) signed a memorandum of understanding on the project relating to some US$1.8 billion worth of projects. The arrangement between GE and the DRC includes US$1 billion for upgrading Inga I and II dams, and US$800 million for health infrastructure projects.

Raila Odinga, who is the African Union’s special envoy for infrastructure development in Africa and a former prime minister of Kenya, will attend a meeting in Kinshasa on April 28, 2020, that will include representatives from neighboring countries’ governments.

 

"The Grand Inga Dam alone could provide 40,000 megawatts, and the entire Congo River has the potential to generate 100,000 megawatts"

 

Estimates suggest that all of sub-Saharan Africa has an installed capacity of less than 140,000 megawatts. The Grand Inga Dam alone could provide 40,000 megawatts, and the entire Congo River has the potential to generate 100,000 megawatts using existing technology. At present, the GE deal is focused on increasing by 650 megawatts the electrical capacity of the two existing Inga dams, with an eye to playing a role in the Grand Inga project as it develops. 

This isn’t the first time plans have been announced to build a massive hydroelectric project on what is, measured in volume of water, the world’s second-largest river. The potential of Inga Falls on the Congo River to provide hydroelectricity to Africa was envisioned by early colonial explorers and dreamed of by the Congo’s leaders after independence from Belgium in 1960, but has never been realized.

The retrofitting project, in which GE is set to play a critical role, will also include the two existing dams, Inga I and Inga II, which are in disrepair. The two dams, which have a combined capacity of 1,778 megawatts, were built during the era of former president Mobutu Sese Seko, in 1972 and 1982, respectively.

 

Inga II
Aerial photo from 2006 of Inga II Dam (Courtesy of Flickr)

 

Old and New Players in Africa

 

"Political and security risks in the DRC may have kept many companies and investors away from the country, but China saw an opportunity."

 

General Electric’s contribution to improving energy production in the DRC is significant, given the limited engagement of US companies in addressing Africa’s huge infrastructure deficit. In recent years, while US companies have stepped back from such projects, China has moved assertively into Africa to help build dams in the Nile Basin countries Uganda and Sudan, and most recently the Grand Ethiopian Renaissance Dam, a source of geopolitical tension between Egypt and Ethiopia.

The DRC has experienced some terrible times in its recent history, most notably serving as theater for what has been referred to as “Africa’s World War”, which plunged nine African countries and multiple rebel groups in years-long fighting in the DRC. That war ended only in 2013, with the defeat of the rebel group the March 23 Movement. Political and security risks in the DRC may have kept many companies and investors away from the country, but China saw an opportunity. In 2007, China gained extensive mining rights in the DRC in exchange for agreeing to build much-needed infrastructure for the war-ravaged country. It was called the “contract of the century”. Yet, things have not always worked out for the DRC in some of its deals with China. A review of the project last year suggested that deal produced little tangible benefit. Elsewhere, Chinese investments in the DRC have been more beneficial.

The Trump administration has centered its Africa policy on countering Chinese and Russian influence. Conversely, most African governments have welcomed investments from all comers, and would be happy to see the world’s leading economies work together in expanding the continent's infrastructural network.

 

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Aug 3, 2020