Features

NEPAD AND ENERGY: TURNING OUT THE LIGHTS

Akong Charles Ndika

2003-07-17, Issue 119

http://pambazuka.org/en/category/features/16453

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Couched in a new framework of interaction between Africa, industrialised countries, and multilateral organisations like the World Bank, the New Partnership for Africa's Development (Nepad) has been promoted at all major world economic gatherings since its launch in October 2001. At corporate globalisation forums like the G8 meetings, its advocates have likened Nepad to the Marshal Plan that resurrected Europe after World War Two, claiming that Africa's present development status is as a result of insufficient globalisation, and the therapy is to integrate Africa further into the global economy. By this strategy, can Africa truly claim this millennium? Nowhere is an answer more obvious than in the energy sector, the cornerstone of Nepad.

Energy is of premier importance for economic development in Africa. With global business opportunities totalling trillions of dollars, energy is one of the biggest businesses in the world. In particular, energy consumption in developed countries is expected to swell significantly in the years ahead. With these rosy business prospects, Nepad intends to use energy as a launch pad for Africa into the global economy. Against this, and despite the rich and diverse sources of energy on the continent, per capita consumption of energy in Africa is the least in the world, fronting energy poverty at the root cause of underdevelopment. With about 40 to 45% of the 730 million people in Africa living on less than a dollar a day, access, affordability, and efficiency are the tenets on which any strategy that will align Africa's energy economy on a path to sustainable development must be judged.

Although Nepad makes a token reference to the need to guarantee a sustainable supply of affordable energy as the cornerstone for poverty alleviation, projects envisaged to operationalise the goal run opposite to the energy needs of the majority of Africa's inhabitants. The short-term action plan to dually anchor sustainable energy development and serve as building blocks to the realisation of medium to long-term goals are power systems, and oil and gas transmission projects. The power projects include the Mepanda Uncua Hydro Power Plant, Ethiopia-Sudan Interconnection, West Africa Power Pool (WAAP) Program, Algeria-Morocco-Spain Interconnection, Algeria-Spain Interconnection, Algeria Gas-fired Power Station, and the Mozambique-Malawi Interconnection. The gas and oil transmission projects include: the Kenya-Uganda Oil Pipeline, West Africa Gas Pipeline (WAGP), and the Libya-Tunisia Gas Pipeline. Firmed on the profiteering devotion of multinational corporations, are these projects really relevant to Africa's development aspirations? Alternatively, will they actually meet the energy needs and aspirations of present and future generations? This article attempts an answer by calibrating the projects on the following sustainability scales:

AFFORDABILITY: PUTTING PROFITS AHEAD OF PEOPLE

The power projects mentioned highlight an unbowed agenda to centralise the supply of electricity in the continent. The seed capital for these projects is the sweeping wave of privatisation of State Owned Enterprises (SOE's) across Africa. Through policy-based lending, most African countries are subscribing to the dictates of international institutions like the World Bank to open the energy sector to foreign investment through privatisation and deregulation. In these circumstances, electricity is treated as a commodity rather than a public service. Hence, the hallmarks of SOE's such as universal service, non-discriminatory pricing between industrial and residential users, and cross-subsidies to urban poor and rural populations are substituted for full cost recovery, the credo of privatised utilities.

At the same time, and in order to maximise profits, multinational corporations are exploring opportunities to transcend geographical barriers. Anchored in neo-liberalism, the Nepad action plan facilitates the lifting of geographical restrictions on electricity trade across Africa. It is worth noting that this is inimical to the livelihoods of the majority of Africans living below two dollars a day. Besides paying the real cost for electricity, unreliable consumers will be priced out of the grid. In sum, markets and customers in the Nepad action plan take precedence over citizenship.

ACCESSIBILITY: NO ROOM FOR RURAL ELECTRIFICATION

Access to electricity services is a clear marker of the difference between the rich and the poor, between men and women. In fact, 80% of the 500 million Africans without access to electricity live in rural areas. In particular, the rural electrification rate of 16.9% in Africa is the least in the world. The lack of electricity correlates with many indicators of poverty such as poor education, inadequate health care, and hardships imposed on women and children. Electricity services can indeed enhance the quality of life of rural populations in countless ways. For instance: electric light extends the day, providing extra hours for reading and improving exam results in rural areas; refrigeration allows rural clinics to keep needed medicines such as vaccines; and solar dryers can lead to lower post-harvest losses and enable rural farmers to market their produce when prices are higher.

Because of the rates of poverty and low population density in rural areas, relying on grid solutions for lights on is a sure course for lights off. In fact, the energy needs of rural Africa are decentralised. Meeting the energy needs of rural populations requires the exploration of renewable energy sources. In contrast, the Nepad action plan prioritises the centralisation of power supply, the opposite of the decentralised energy needs of rural masses. Driven by profits, privatised utilities have no incentive to extend networks to rural areas, unless government subsidies make up for the financial loses and provide an attractive margin of profit. It is worth noting that the neo-liberal fountain from which Nepad draws its viability is at odds with subsidies. In fact, governments are compelled to shirk their social responsibilities thereby leaving rural populations permanently unconnected to the grid.

EFFICIENCY: PRIVATISATION OF BENEFITS AND SOCIALISATION OF RISKS

The Nepad action plan is based on a resource-led development approach which prioritises the extractive industry sector, paving the way for criss-crossing oil and gas transmission pipelines. The capital intensive nature of these projects is beyond the purse of African states; and the action plan intends to facilitate the establishment of policies and institutional framework favourable for multinational corporations to invest. This could include favourable contractual risk guarantees that profits are placed ahead of public concerns and generous tax exoneration provisions. But the fact is that oil mining does not equate with the prosperity the international financial institutions give it credit for. Even though Nigeria ranks seventh in terms of world oil production, she tailed the human development report in 2002. Another point that cannot escape attention, particularly in the context of the present US-led war against terrorism, is the potential millitarisation of pipeline routes and the inevitable impact on the human rights of nearby communities. Envisaged power projects will significantly impact on the livelihood development of communities. For example, the Mepanda Uncua Hydropower Project will lead to the construction of a 100 square kilometre reservoir that is going to displace 1400 people, while floods are expected to impact on further thousands.

I wouldn't like to conclude without resuscitating the focus of this article: Is Nepad worth its value in sustainable development? Calibrated on the aforementioned points, it is hard to answer in the affirmative. In addition, credence for this pessimism roots in Nepad's engagement with civil society organisations in Africa, international social labour, and environmental movements. In obviating the contributions of these actors, who in their struggle for socio-environmental and economic justice have been able to bring about a modicum of progressive global change, Nepad fails to differ from other multinational corporations' designs to mine Africa's resources and maim its people. Is this the price to be paid in order for Africa to claim this millennium?

* Akong Charles Ndika is an Energy Policy Analyst with Global Village Cameroon. http://www.globalvillagecam.org

* Please send comments for publication in the Letters and Comments section of Pambazuka News to editor@pambazuka.org

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