Opportunity for whom: The EU-Africa partnership and sustainable energy transitions

The new EU-Africa partnership should focus on strengthening African governments and working with them on their renewable energy strategies, argues Jesse Ovadia.

A new chapter in the EU’s relationship with the 79 African, Caribbean and Pacific (ACP) countries began in April of this year with the signing of a new EU-OACPS Partnership Agreement (sometimes called Cotonou 2.0 or the post-Cotonou agreement).

The announcement has renewed debate around the nature of the EU’s partnership with Africa—particularly around climate change, the environment, and sustainable development, which are a new area of cooperation prioritized by the agreement.

Nowhere is this truer than in Nigeria, Africa’s largest economy and the leading oil producer on the continent. Green opportunities and investments are vital to assist in the country’s long-term energy transition.

For Europe, the Cotonou agreement provides a framework within which the multi-billion-dollar European Green New Deal can benefit ACP countries through new investments in green infrastructure and technology.

The President of the European Commission, Ursula von der Leyen, has argued that the green transition and the transition to renewable energy, in particular, can be an engine of post-COVID-19 recovery in both Europe and Africa, calling this ‘the biggest economic opportunity of our times’.

Across Europe, discussions have kicked off on how Africa can benefit from the European Green New Deal by accessing much-needed investment for its sustainable energy transition. These discussions should also touch on how to learn from past development failures, as European nations support African nations’ Green New Deals.

Yet, across Africa, there is growing concern that the post-Cotonou agreement fails to recognize the intra-Africa Free Trade Agreement (AfCFTA) as the framework within which the African Union articulates its policies to promote economic growth and sustainable development. In not recognizing AfCFTA, it may be the EU that ends up losing out on an opportunity.

Due to its size and importance, Nigeria’s renewable energy transition offers as much if not more opportunity to Europe as Europe’s Green New Deal offers to Nigeria.

Nigeria’s renewable energy policy, and in particular its new solar power plan, has immense potential given the country’s energy needs and its diesel-dependent economy in which more than 40% of the population has limited access to electricity.

Implementation is the major challenge for Nigeria’s plans. The success of the plan to use renewables to promote energy security in Nigeria relies on private investment. In the history of development and of the EU’s partnership with Africa this has been a recipe for disaster.

With Cotonou 2.0, there is a chance to choose a different model than the one that has failed in the past, by balancing investment promotion with strengthening industrial policy and the national agencies involved in its implementation.

In describing Africa’s green energy transition as an opportunity for Europe, there is a need to question for whom new opportunities exist, who is being left out, and how economic transformation can foster genuine diversification and inclusive sustainable growth.

In turn, sustainability and green investment from Europe cannot be based on the historical patten of domination and extraction.

To break the mould, the new EU-Africa partnership should focus on strengthening African governments and working with them on their renewable energy strategies. Nigeria’s solar power plan underscores the possibilities of an energy transition that is state-led.

The role of the state should be to maximize the potential for industrial development and green jobs. A partnership with Europe would therefore involve European support for African green new deals on African terms and private investment that is directed by, and conforms to, the national development strategies and industrial policies of African states.

In Nigeria, the Rural Electrification Agency (REA) has suggested the solar power plan has the potential to impact up to 25 million beneficiaries, create 250,000 jobs, generate $17 million in tax revenue, and achieve $10 million in annual import substitution—all from a $75 million investment.

While these would seem to be inflated figures, the 20th-century new deal was a state-led approach to economic development, largely aspirational in the beginning, that did indeed drastically reduce unemployment in the US. In a country like Nigeria, in which official youth unemployment is nearly 30%, there is enormous potential in such an approach.

The most important, yet underdeveloped, aspect of Nigeria’s solar power plan is the promotion of large-scale assembly of solar components in Nigeria, or the ‘local content’ aspect. For the past two decades, local content has been fundamental to Nigeria’s strategy to capture more benefit from its petroleum resources.

Although this strategy was slow to take off, it is a made-in-Nigeria approach supported by a variety of stakeholders and led by the Nigerian government through the Nigerian Content Development and Monitoring Board (NCDMB).

The role of foreign governments and international oil companies should be to offer support and assistance, which they are more inclined to offer given the strategic importance and significance of Nigeria’s oil resources.

If it is serious about a just transition, Europe’s role in promoting renewable energy in Africa must also be focused on support to state agencies like the REA, debt relief, investment directed in alignment with its strategy, and facilitating rather than hindering local content, technology transfer, and in-country value addition to address longer-term structural transformation.

In this way, Nigerians and Africans more broadly will be not only users of green energy but producers of the technology and inputs used in the renewable energy industry.

Dr Jesse Salah Ovadia is an associate professor at the University of Windsor, Canada, and author of The Petro-Developmental State in Africa.

This article was originally shared by Euractiv.