Africa needs to accelerate efforts to achieve energy independence, as unreliable and insufficient power supplies threaten to constrain the continent’s industrial and digital ambitions, according to MTN Group Chairman Mcebisi Jonas.
The continent’s dependence on external sources of energy must be reconsidered as governments seek to expand digital infrastructure and build more resilient economies, Jonas said during an MTN Y’ello Chair discussion.
“I think the continent is probably in a critical crossroads position,” Jonas said, citing geopolitical changes and the need for Africa to rethink its economic strategy.
“Firstly, I think you have the kind of global geopolitical situation. And we have to start reimagining how Africa will look beyond the war, as it were.” Jonas identified energy independence as one of the most pressing priorities, arguing that power availability is fundamental to economic expansion.
“And clearly, two things are coming through the war that are fundamental. The first is that Africa needs to look at how we achieve energy independence to start with. Because I mean, it’s clear that energy drives growth in a very serious way.”
He said Africa had become overly dependent on countries outside the continent for energy over the past two decades, although developments such as Nigeria’s Dangote refinery are beginning to change the landscape.
“Of course, we are having major developments. The Dangote refinery actually is a very significant contribution. Hopefully there will be another one that they are working on and so on.”
Powering digital infrastructure
The energy challenge is becoming increasingly important as African economies expand their digital infrastructure, Jonas said.
Digitisation requires large and reliable supplies of electricity, particularly as the continent develops data centres and other infrastructure needed to support the digital economy.
“So driving an agenda for energy independence is important because digitization requires energy. If you think about data centers and all the things that we require to drive digitization, you do need a lot of supply of energy.”
The comments come as African governments and businesses seek to capture the economic benefits of a rapidly expanding digital economy while facing infrastructure constraints.
Jonas also pointed to Africa’s demographic profile as a potential source of economic growth. The continent has a large and growing working-age population at a time when other regions are facing ageing populations and declining numbers of working-age people.
“We might be a major importer and exporter of skills very soon,” he said, provided countries improve education, training and digital-skills development.
Investment environment
Jonas said Africa’s ability to attract capital will also depend on improving its investment environment and creating greater certainty for businesses. “We need to be conscious about the investment environment in the continent. Consciously improve the investment environment in the continent.”
He said African governments should identify sectors where they want to attract investment from both Pan-African businesses and global companies. Africa has an additional advantage in its mineral endowment, particularly critical minerals required for the digital revolution, Jonas said.
“There is a huge positive spin in where we are, but there are also huge headwinds and risks.” Among those risks, he identified leadership and the weakness of private-sector ecosystems in some African economies.
“Economies depend on the number of companies that countries have.” “We must build the private sector and ensure that we create an environment that it’s dynamized, it’s made stronger, is made robust.”
For Jonas, energy independence, skills development, stronger private sectors and a more attractive investment environment are interconnected elements of Africa’s effort to convert its demographic and mineral advantages into sustained economic growth.
