Economy
How to Solve Africa’s Power Distribution Problems
By Anastasia Walsh
Electrification is an on-going and foundational investment, and a necessary one to realize all modern-day development objectives. Despite bullish policies, the fact remains that over 640 million Africans lack access to electricity. The effect of this is apparent. It impedes economic growth; it inhibits the advancements of self-reliant local communities, and it threatens national security. African governments are beginning to rethink their electrification plans. Grid modernisation, specifically the deployment of microgrids in rural areas, provides a promising strategy.
The Centralized Utility Model Is Not Adequately Serving Africa’s Needs
Attempting to replicate the centralized utility models implemented in the U.S. and Europe has not succeeded in improving energy access across the continent. Despite this, it seems many governments and utilities wrongly maintain the position that the expansion of the traditional grid infrastructure is the solution. In areas where communities have access to the central grid, they still have to supplement the intermittency of the power with diesel generators. On the flip side, the utilities are financially strained because they are unable to collect revenues from their customers. The low rate of revenue collection is due to the unsustainable tariffs the providers impose on customers as a result of the political pressure exerted on them. This results in the utilities being unable to finance upgrades in infrastructure, further exacerbating the issues.
Those who favor the expansion of the central grid as the most effective means of increasing rates of electrification face the challenge of reconciling two contradicting positions. The first position is that increasing access requires lowering tariffs. The second position is that lowering tariffs will intensify the financial stress utilities are currently under. Neither of these positions is sustainable. The incorporation of microgrids into a hybrid system of electrification is the best solution.
Grid Modernisation and Microgrids
Microgrids are small-scale power grids that run on a combination of solar, wind, or biomass or fossil fuels to provide reliable power. They operate either independently from the main grid or can be synched to it at the same voltage to shift the energy and respond to peaks and troughs in supply and demand. This ensures there is no interruption in power supply, allowing communities to be more energy independent by cutting costs and providing reliable energy access.
Productive Use of Energy (PUE) is Key
The off-grid solar lighting market is thriving thanks to the falling prices of renewable energy equipment. The solar lighting market has been further bolstered by widespread deployment of pay-as-you-go (PAYGO) payment systems that utilize mobile-money technology. These solar devices provide sufficient generation for low consumption needs like household lighting, charging cell phones, and the use of small household appliances. Despite its attractiveness to householders, off-grid solar lighting is currently not scalable. The deployment of microgrids will be necessary to provide the adequate output required to power commercial businesses, hospitals, schools. Demand for electricity from small industry and business, which is classified as the productive use of energy will determine the success of microgrids; without this demand, the deployment of microgrids will not be financially viable. Ensuring the Productive Use of Energy enhances the economic and social development impacts of microgrids and rural electrification in the wider context.
Leading The Way: Kenya and Nigeria
Africa is forecast to be the world’s fastest-growing market for microgrids at a Compound Annual Growth Rate of 27%, representing 1,145MW by 2027. Within the continent, Kenya and Nigeria are at the forefront of the grid modernisation revolution.
With strong renewable energy and microgrid policies, Kenya has doubled its energy access rates since 2014. To reach its goal of 100% electrification by 2030, Kenya should implement a hybrid-decentralized system. This entails a combination of traditional utility distribution and the deployment of an extensive network of microgrids. The prevalent use of mobile money in the region, if harnessed correctly will provide the best means of collecting payment of energy bills. Nigeria similarly has ambitions to drastically increase their generating capacity by 2030 with 30% of that planned to be from renewable sources. Microgrids are expected to provide 5.3GW of this increased generation capacity.
Nation-Specific Policies
To improve energy access, African nations should consider incorporating the following into their policies: First, targeting rural populations for distributed energy via microgrids; then implementing low-cost and low-barrier permitting and licensing rules with standardized quality control and operating requirements; and finally ensuring that electrification strategies are financially viable.
Decentralized/hybrid solutions such as microgrids are the most cost-effective solution. The PAYGO business model provides an efficient means for project developed to collect revenues from their investments. Despite the tendency to paint all sub-Saharan countries with the same brush, as it relates to electrification rates, this is especially inappropriate. When it comes to implementing electrification and grid modernisation strategies, policymakers should consider their countries unique geography, natural resources, climate, population density, and power demand patterns.
Anastasia Walsh is from International Energy Consultant in Johannesburg
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
By Adedapo Adesanya
The euphoria around the recent appreciation of the Naira eased on Wednesday, December 11 after its value shrank against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N5.23 or 0.3 per cent to N1,547.50/$1 from the N1,542.27/$1 it was valued on Tuesday.
It was observed that spectators’ activities may have triggered the weakening of the local currency in the official market at midweek as they tried to fight back and ensure the value of funds in foreign currencies strengthened.
The domestic currency was regaining its footing after the Central Bank of Nigeria (CBN) launched an Electronic Foreign Exchange Matching System (EFEMS) platform to tackle speculation and improve transparency in Nigeria’s FX market.
At midweek, the Nigerian currency depreciated against the Pound Sterling by N3.56 to close at N1,958.68/£1 compared with the preceding day’s N1,955.12/£1 and against the Euro, it slumped by 34 Kobo to trade at N1,612.66/€1, in contrast to the previous session’s N1,613.00/€1.
As for the black market segment, the Naira lost N45 against the American currency during the session to quote at N1,670/$1 compared with the N1,625/$1 it was traded a day earlier.
A look at the cryptocurrency market showed a recovery following profit-taking as the US Consumer Price Index report matched economist forecasts.
The news was enough to convince traders that the Federal Reserve is certain to trim its benchmark fed funds rate another 25 basis points at its meeting next week.
The move also saw Bitcoin (BTC), the most valued coin, return to the $100,000 mark as it added a 2.9 per cent gain and sold for $100,566.12.
The biggest gainer was Cardano (ADA), which jumped by 15.00 per cent to trade at $1.16, as Litecoin (LTC) appreciated by 10.4 per cent to sell for $121.76, and Ethereum (ETH) surged by 7.0 per cent to $3,929.30, while Dogecoin (DOGE) recorded a 6.7 per cent growth to finish at $0.4181.
Further, Binance Coin (BNB) went up by 5.2 per cent to $716.72, Solana (SOL) expanded by 4.6 per cent to $229.77, and Ripple (XRP) increased by 4.2 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
By Aduragbemi Omiyale
The Dangote Refinery located in the Lekki area of Lagos State has made its first export of premium motor spirit (PMS) just three months after it commenced the production of petrol.
In September 2024, the refinery produced its first petrol and began loading to the Nigerian National Petroleum Company (NNPC) on September 15.
However, due to some issues, the facility has not been able to flood the local market with its product, forcing it to look elsewhere.
In a landmark move for regional energy integration, Dangote Refinery has partnered with Neptune Oil to take its petrol to neighbouring Cameroon.
Neptune Oil is a leading energy company in Cameroon which provides reliable and sustainable energy solutions.
Dangote Refinery said this development showcases its ability to meet domestic needs and position itself as a key player in the regional energy market, adding that it represents a significant step forward in accessing high-quality and locally sourced petroleum products for Cameroon.
“This first export of PMS to Cameroon is a tangible demonstration of our vision for a united and energy-independent Africa.
“With this development, we are laying the foundation for a future where African resources are refined and exchanged within the continent for the benefit of our people,” the owner of Dangote Refinery, Mr Aliko Dangote, said.
His counterpart at Neptune Oil, Mr Antoine Ndzengue, said, “This partnership with Dangote Refinery marks a turning point for Cameroon.
“By becoming the first importer of petroleum products from this world-class refinery, we are bolstering our country’s energy security and supporting local economic development.
“This initial supply, executed without international intermediaries, reflects our commitment to serving our markets independently and efficiently.”
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