Energy and infrastructure with Amani Abou-Zeid

In this episode, Amani Abou-Zeid – African Union Commissioner in charge of infrastructure, energy and ICT – talks to ACRC's city of systems lead Seth Schindler about energy security and infrastructural development in Africa.

They reflect on Africa's energy "evolution" in relation to climate change, why integration is key to bridging the continent's infrastructure gap, the impact of rising interest rates on foreign and local investment, and the regional innovation and cooperation that has emerged in response to multiple crises, including Covid-19 and the war in Ukraine.

Amani Abou-Zeid is the twice-elected African Union Commissioner in charge of infrastructure, energy and ICT, and is also chair of ACRC's consortium advisory group. She holds a PhD in social and economic development from the Global Development Institute at The University of Manchester.

Seth Schindler is senior lecturer in urban development and transformation at The University of Manchester's Global Development Institute and co-research director of ACRC.

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Music: Brighter Days | Broke in Summer

Sounds: Zapsplat

This podcast presents the views of the speakers featured and does not necessarily represent the views of the African Cities Research Consortium as a whole.

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Transcript

Intro Welcome to the African Cities podcast.

Seth Schindler My name is Seth Schindler and it's a pleasure to be here today with Dr Amani Abou-Zeid. She graduated from Harvard University with a Master's and from The University of Manchester with a PhD in social and economic development, and she's been very busy since then. She's held numerous high-level positions with international organisations such as the UN Development Programme and she was the director of the African National Resources Centre at the African Development Bank. In 2017 she was elected commissioner for infrastructure and energy at the African Union and she's remained in that role to the present. She's also kindly agreed to charge the strategic advisory committee of the African Cities Research Consortium, an FCDO-funded project that's based here at The University of Manchester. Finally, in her free time she competes in desert car rallies, so if we have a time I don't know if I'll be able to resist, I may have to ask her question about that. But Dr Abou-Zeid, thank you very much for joining us.

Amani Abou-Zeid Thank you very much and such a pleasure to be here, GDI was my home, this is where I studied my PhD and I'm happy and very proud and humble to say that yesterday I was conferred a doctorate honoris causa from the University. Again, thanks to GDI and all the great work that we are doing together and yes, I do many things in my free time like you said, and that's maybe a more exciting part.

Seth Schindler Indeed, indeed, well yeah, and congratulations on your award. But let's talk infrastructure. So in recent years, it's been common to hear about an infrastructure gap or an infrastructure deficit that's constraining development in many African countries. Clearly this varies significantly from place to place within Africa. Could you just tell us briefly about the state of African infrastructure and perhaps some of the main barriers preventing countries from improving their infrastructure?

Amani Abou-Zeid Definitely, infrastructure. First of all, let me just say, infrastructure is so important. People do not always realise how important it is until it does not work or until is not there. So people do not realise how important is energy for instance, until they have a problem or they think of travelling and then suddenly they I realise that there is no connection or a road or a railway to take them there, or it's there but very expensive, and so on and so forth.

As you rightly said, Africa as you know is made of you know 55 countries, so that the the level of infrastructure, the level of the development of infrastructure in each and every country is different and also different from one region to another, it's different from urban, whether you are in the urban area or rural area, sometimes you get more focus, more attention given to certain areas more than others. So it's very varied, but in general, the continent lacks or has a serious infrastructure gap, due also to the fact of the high population growth. We have the highest demographic growth rate in the world, which means that even if you do something today, a few years down the line, you would need much more. And the estimations pre-Covid were that it would cost the continent about 170 billion dollars a year over 10-15 years in order to cover or bridge the infrastructure gap, which is huge. Now, what are the impediments or the challenges?

First, how would I say, obvious one is finance. I mean, this is a huge financial gap that is needed. What makes it huge is not just the amount, what makes it huge is that the the continent is wrongly labelled as risky, and there's always, you know, the stereotypes - risky continent, there are no bankable projects, I mean stuff like that. Which means that the cost of capital for the continent is very high. And by the way studies have confirmed that Africa is the second less risky region when it comes to finance, so people who sit in privileged places do not even give themselves, you know, the benefit of the doubt to investigate whether it's risky or not. And then take it as if Africa is one homogeneous place, or that all the sectors are the same, because actually it differs from one sector to another. You would see, for instance, that there is lots of investment in telecoms, in digital, which is good, which is perfect. But again, digital, the income comes very quickly and the benefits in financial terms very quickly. This is very much different from a road for instance, or you'd have to do extensive studies, take years, and the implementation takes more years and you will start to break even maybe 10-15 years later. Investors, do not see, they want the quick win, so they shy away from areas like railways, like roads and that is why we have established a facility for project preparation in infrastructure and it's grant-based, so as to help or alleviate some of the costs, the initial costs in preparation for the project, to entice investors.

And also when we talked about African integration and why have two regional or continental projects, it's to, again it's an incentive actually to investors because instead of having small fragmented markets you want a big project that you know it's meaningful for a meaningful investment, rather than smaller ones and getting into the complication of smaller projects. We have also prepared, and that's revised yearly, a programme for infrastructure development that on the one hand works on linking the continent together and integrating the continent through infrastructure and also as I said I mean prepare or prioritise some bankable projects to potential investors, together with some incentives and other instruments to make it palatable for investors, African or non-African. And by the way, we're going to COP27, knowing that this COP is going to be different because there will be two or three investment days. We have already submitted nine continental projects for investment by international or African private or public finance.

Seth Schindler That's fascinating. You mentioned some of these large-scale schemes, you mentioned the programme for infrastructure development in Africa, for example, and you mentioned transnational connectivity, so integrating regions within Africa and also the continent as a whole. To me it seems like there is some tension between these transnational infrastructure investments and city-based ones, so I'd like to ask, in your view, how do cities and urbanisation relate to these expansive schemes? Because obviously a city-based infrastructure, something like water or a sewer system, is quite different from a transcontinental highway infrastructure programme. So is there a trade-off or do you see this as complementary?

Amani Abou-Zeid No actually, when I spoke about the programme for infrastructure development, one of the main criteria was to link to urban and rural, so we were very careful at that because we do not want to accentuate or further exacerbate this divide, urban and rural. And we wanted at the same time to remedy or to address, you know, the fact that rural areas are also often neglected. This is what 70% of our population live, so it's, we cannot continue on that base and also knowing how important urban or semi-urban cities are now important and growing, again, it's the fastest urbanisation anywhere in the world. So we are very much mindful of that so linking or integrating urban and rural was very much part of that and how to make even the rural area benefit from this what you call grand scheme, it's not necessarily grand, it felt like the right thing to do in order to create this real integration of the continent rather than one that's only looking at the bright and shiny and linking the bright and shiny, and that was never the intention, no.

Seth Schindler Right, okay, thank you. I'd like to ask you about energy infrastructure and transition. So on the one hand it seems to me that there are many large-scale initiatives to improve and expand energy grids. On the other hand, for those of us familiar with urbanisation in Africa, it's clear there are many small-scale and off-grid schemes as well, I'm thinking here of a number of schemes I'm familiar with, I'm sure you're familiar with many, say that make solar panels available down to the household level or LNG cylinders, for example. I wonder if you could speak about your impression or predict what Africa's energy mix will look like in two to three decades, given this variety of large-scale schemes and off-grid schemes?

Amani Abou-Zeid First of all, the expression "transition" is quite recent, and it did not emanate from Africa. It was "transition", as it's coined, is one that talks about transition from fossil fuel to clean or to green fuel. This is not the case with Africa. I would like to remind everyone that only 49% meaning less than half of Africa has access to electricity. That's about 600 million Africans who do not have access to electricity - fossil or non-fossil. And 900 million Africans do not have access to clean cooking, meaning they are using either cutting the wood, through the charcoal, firewood, primitive not treated biomass, this is what they use for cooking, more than 90% of the continent, causing about 340,000 deaths every year - more than malaria, definitely more than Covid, more than car crashes, you think of anything.

Seth Schindler And this is from the poor air quality or fires or both, everything?

Amani Abou-Zeid The fumes, respiratory disease, the burns, the serious burns from kerosene, and this often happens you know to women, to children. But because it's women, it's children, it's cooking, so it's almost like a blindspot. So people talk only about electricity, they forget there's also a huge issue about clean cooking. So when I say we never in Africa until only two years ago when the West started talking about transition, and they wanted to impose this term on everybody else, they said, listen - for us the priority, and this is what's in the Agenda 2063, which is the African development strategy, talks about universal access to affordable and reliable energy.

It's not only about access to energy but it has to be people, I mean it has to be affordable and to be reliable. I'm sure you also experience the fact that you will be somewhere there is electricity, but four hours of outage almost everyday, and that's just electricity, I did not even talk about clean cooking, so this is the priority for Africa, which means let's go back to the term "transition". Those who are fossil fuel, there are those that are using fossil fuel now, there are lots using renewable energy - actually we do have countries that are running basically on renewable energy, either hydro, we have a whole region like Eastern Africa soon will have 40% of its energy coming from geothermal, supported by the African Union, we have two of the largest solar power plants in the world are in Africa - one in Morocco, one in Egypt - lots of small hydro, lots of wind farms, it's happening everywhere in the continent.

That said, we also have 14 countries that are producers of oil and gas. The continent, because of this massive gap and this energy poverty that we're having, has to use everything that it possibly has to get to this access. Now suddenly the polls, Africa this, Africa that, but we're not against anything, actually we've never been a climate denier, for the simple fact that Africa again is the most impacted continent from climate hazards. What you've talked about, you know, the mini-grids, the off-grid solution, are perfect, are great, and actually you said in Kenya, I can't remember what you said - but it's everywhere. But when you're in this, I mean a country, or to look for technical solutions, you cannot say that a mini-grid will run a factory, for instance. It's maybe it's suitable for a house or a village, perfect, but for an industrial zone you will need another type of energy because you need, it's not the same output when it comes to energy. And of course, technology is evolving, I'm not saying otherwise, but you cannot say that mini-grids is the solution for Africa energy poverty. I'm sorry. That's it.

And it seems that some people think that African aspiration is, oh they have this village and they want a bulb in the village. Yeah, we want that bulb, but we want industrialisation, we want transport systems, we want also to you know have a competitive economy, which does not run you know on a mini-grid. Off-grid or decentralised power solution is something else and it's being contemplated around the world and we're not an exception to that. But here and now the priority is access, so that's why and I'm sure you've read it in the media - and by the way, throughout my life, all the projects I have implemented in energy were all renewable energy and/or transmission - but we cannot, as I said, treat a city like a village, a hut like a factory, an industrial zone is very much different, a country that has potential to produce geothermal like a country that doesn't have it, a country that has potential for natural gas, why not? It should make sure that its population benefits from this natural gas for clean cooking and not to export all of it, so we're also looking at you know this continuous, how would I say, we're working with our countries in Africa also to make them see that you cannot just export everything even when prices are high, they can get some revenues. Especially after Covid there has been a financial budget deficit, but there has to be a balance between what to export, what to domestically use and invest in, what to also use regionally, in order to not find ourselves in 5-10 years down the road having exported everything and then sitting exactly where we are, even worse. So this "pit to port" kind of mentality also in Africa has to change and that is why we want infrastructure like roads or railways have to help, because so far practically most of the major roads, almost all railways go from pit to port, but not linking either the country with itself or the country with a neighbouring country.

Seth Schindler Indeed, yeah, I have heard people talk about the term "evolution" as perhaps being more appropriate than transition and it sounds like these different types of systems will evolve at the same time in parallel, in many countries.

Amani Abou-Zeid Yeah, and you have to, it's not like, I mean I cannot treat definitely I cannot treat a country in Africa, whatever it is, I don't want to - a state like Sierra Leone is not the same as South Africa, not the same as Congo, not the same as Ethiopia, or Niger, or Morocco, or Libya. I mean, we're talking about completely different landscapes and none of these I cannot compare none of these  to the UK or Italy or the US.

Especially you always have to take in consideration that we grow exponentially in terms of population, which is another big issue that we are dealing with. But it's not just that it's a fixed I mean number of people that you are serving, but this number of people is growing monthly and if people do not know by the way it grows with that also the fact that you know job opportunities, Africa has to create new job opportunities - 11 million every year, it's almost you have to create a million jobs every month in order to cater for the population. So the challenges are huge and I don't think in Western mind when they coin such terms or want to impose such approaches realise how different things are in other places than their own.

Seth Schindler Right, right. That's a great point. I guess one more question on energy, many of our listeners at the moment are dealing with extraordinarily high energy bills, at the moment, prices have increased as a result of the war in Ukraine, but for many other reasons as well. This is a global increase in prices and I wonder how has that affected African societies and how have policymakers responded?

Amani Abou-Zeid We are part of the world and it is, how would I say, it's always I don't know unfortunate or tragic that we have to be impacted in Africa more than other places with things that we did not even cause. Earlier we were talking about climate, okay, Africa produces 3% of GHG, using all sources energy that we have not just green. And for universal access to happen, if you read the International Energy Agency report, the one launched in June of this year, Africa will produce 4% of the GHG with everything included. So I mean the climate, we are far from it, and yet, as I said, we are the continent that is hardest hit by the climate hazards.

Same thing with the war. The war also exposed us in terms of food security and energy security, and this comes as a contrast with what I was saying earlier - how come you have so many exporting countries, exporters of energy, but you you're saying you have energy insecurity? Because we never transformed anything of what we're exporting. So we export raw, and import products, even in the energy we are producing, even in the chocolate, the cocoa we are producing. So many of our African population do not know what a chocolate bar is, because they have never seen anything but the cocoa bean. But we import the chocolate. So this is really, it's tragic, I'm saying that but at the same time I hope I don't sound evil or cynical saying that, it takes sometimes a serious crisis to push you into the right direction, like we've seen under Covid with digitalisation. And by the way, I'm also the commissioner for digitalisation in charge of that. Like it pushed everybody suddenly into digitalisation, something we've been trying to convince people with - oh, we have to do this e- this, e- that and they always thought of it as good to have. Suddenly they realise it's a lifeline, a must have, yeah, it's not a good to have, it's a must have.

And we have in countries, I was just saying earlier, that a country like Egypt now is extending fibre optics to the last mile to 4,500 villages, so the whole rural area will be you know digitalised. The same thing with energy security and food security. Africa has 60% of the arable land globally. Still not used. Africa can feed four times the globe, and yet Africa is suffering from food insecurity and his almost 80% of its food imported. This has to stop and it took this crisis to make all of us realise how important it is to look back into agriculture, to give it the proper attention and to use modern tools and now, the work that we are doing now is that going back into energy for agriculture, digital for agriculture. Because it is important and to some extent the war or the crisis is helping crystallise the attention or to focus the attention on this priority, same thing for energy. Last year, we launched in June at the African Union, we launched the African single electricity market. Again, everyone thought of it as you know good to have, it's good that you have an integrated market, good to have. This year, the thought is different, this is a must have. So when our ministers of energy in June met, they said Amani how are you going to see this is accelerated and that we integrate you know in terms of energy very soon, including not just energy generation but energy transmission and pipeline, and this and that. So sometimes it takes a major event like this, well there's an opportunity you know, that's at the face of a crisis an opportunity. So we have to harness the opportunity and not let it go past and use it to do a good thing.

Seth Schindler And in your experience, there is a real will among policymakers at the national level to see this integration, in terms of you mentioned a few cases?

Amani Abou-Zeid Is there any other solution? What else? And by the way that's what happened under Covid, Covid again. When the world was disputing the PPE - and this did not happen in Africa, by the way - the same week, you know, our countries locked down, the same week, Africa came together as one, they established one Covid fund, public and private, pooled all our money into that fund, starting all our lines, you know, distributing all of us distributing, sharing the PPE among ourselves, the ventilators were shared across Africa. And the vaccines, we formed one platform to buy for the whole continent together to get better prices, to distribute it together to get you know. So we pooled our resources together and our heads of state were meeting every week. It's wonderful.

So since Covid, I've seen incredible things, positive things happening in the continent despite the serious tragedies, despite the incredible hardships and losses of livelihoods and the losses of lives. That's why I'm also optimistic in the sense that if we really work very hard and really use this crisis to to do good things for our people and for our continent it would be a bright spot and Africa now is looked at as the saviour, Africa has the resources, so some are saying, oh yes, well let's get the natural gas from Africa, or get this from Africa, which is not bad.

Of course, you would still need to balance your domestic needs and what you export, but also, and this is the story that is not told, Africa is we have six or eight countries now that are producing green hydrogen and some are already starting to export that, ships running on green hydrogen, so it's accelerating the adoption of also green energy in the continent, which means also capacity of people you know developing the local capacities, and why not because you are producing you start to embrace it and start implementing it yourself, so there's another story related to the crisis that is untold and people focusing, rightly so on the negative side, but there is another bright side that is happening in Africa thanks to the crisis that is accelerating the adoption of greener solutions produced in Africa.

And it's true, I said there is no one solution fits all and we have to use all the resources that we're having. That said, green energy has to is being privatised from a different perspective, and I don't mind. I mean even if the perspective of energy security, because unlike fossil fuel you don't have to import it, it's here and there so it's more in terms of security it's reliable or available to use the renewable energy. So there is a different perspective when adopting now the renewable energy, actually not just in Africa but everywhere else. I mean people are looking at renewable energy as a more reliable source of energy and it guarantees in some way your security rather to be dependent on imports that you're having. So that doesn't matter as long as we are, well, ensuring access if it's Africa or going to greener or getting more secure, also supporting the climate agenda. All of these are good things, just make it happen.

Seth Schindler Indeed, easier said than done, I'm sure. But I think you captured a couple of things that are very important, one, in some ways for those of us that research Africa, it does seem like a page has been turned. There is a lot of regional cooperation and as you mentioned, it's an incredibly, there are so many things happening, some stories you said people might not have been aware of in terms of energy evolution, so hydrogen. I also think that the continent, in addition to being a very dynamic place, has captured the attention of a number of others internationally. So we have on the one hand to China's Belt and Road initiative, more recently the EU launched the Global Gateway, the US announced Build Back Better World - we'll see what comes of it - and the G7 announced the Partnership for Global Infrastructure and Investment.

So I guess on the one hand, this is great to receive this type of attention, but on the other hand, do you think that there is a risk that African countries get drawn into this sort of great power geopolitics? How can African countries take advantage of of this attention as they pursue their own domestic, autonomous developmental visions, while avoiding being drawn into these geopolitical rivalries?

Amani Abou-Zeid We are aware of these rivalries, and again, we are very much past infant stage, so we can think for ourselves. And yes, we do the pros and cons and we weigh everything and I mean promises are fine until they materialise. And Africa, we're dealing with everybody. I mean we have partners from throughout, we're not, how would I say, rejecting any particular partner and recently there is also we're looking into potential private investment. We have no, how would I say, preference, rejection and we do not wish for the continent to become the battleground you know for major powers. You deal with it on a case-by-case approach dependent on the projects, the conditions, what does it serve, this and that?

Countries or regions are fine I mean if they announce something that's fine, but again we would like to see things materialise. It doesn't help, it does help those who announce it you know sometimes in big conferences, big numbers are launched and when you look at the numbers that factually reach the continent out of that is minimal. And also you would like to always question when anyone is mentioning a figure - is this new money, fresh money or is it repackaging of what already exists? You want to look into numbers. But again, let's not get into again discard any of the possibilities, all I'm saying I believe in things when they happen. We are here, we know what we want, when it comes to infrastructure we have our priorities, we have our projects, and anyone and every time we talk to our partners say here are the projects that we have prioritised, you are welcome to invest in it. And Africa has its on strategy as a continent, as a region, but also individually as countries. And people should understand that we're smart, we've learned a thing or two.

Seth Schindler Of course, thank you. I have one final question and that is about interest rates, because they are increasing globally perhaps most importantly in the United States. In the 1980s that had a tremendous impact on many developing countries whose loans are denominated in dollars. How will the increase of interest rates in the US and elsewhere influence the current and future infrastructure projects and these autonomous visions that you're talking about in Africa?

Amani Abou-Zeid Good question, I mean that's what IMF is debating now as we speak, so you want me to answer that now? Wow.

Seth Schindler No it's a difficult one, but I guess there is a fear, right, that we don't want to see a rerun of the early 1980s?

Amani Abou-Zeid All of us, and that does not only apply to Africa, but it applies to all dollar denominated sectors or countries you know it is a big issue worldwide. We're seeing things you know happening, some other dynamics or parallel dynamics that are taking place in parts of the world, I don't know whether this would reach the continent or not. But one thing is for sure, that's what I keep saying, we have an interest a deep interest in attracting local African investment. First I mean before even the crisis. If your private investors do not invest in your country, do you really expect a non-national to invest in your country? But the second, now again, if you're an African investor, frankly speaking, where would you put your money? Tell me which country, which region? Other than your own. Will you be even willing to take the risk of putting your money in?

Seth Schindler Well, probably the United States - Silicon Valley or blue chip stocks, American bonds.

Amani Abou-Zeid No problem, go ahead, you do that. You do that and then I will believe you. The most profitable place now to invest your money in is in Africa and also to some extent, it will help cushion - I'm not saying remedy but cushion - a little bit of this issue of being dollar-based on depending on you know to some extent, because again the capacity of our local investors is not as big. So we are looking a lot into you know our local or African investors, African trade, inter-African trade, because again it happens in a different way than the international markets. So again, the African free trade area, inter-African tourism, instead of being dependent on. So we're trying our best to use again these regional transcontinental integrated markets in order to cushion the impact. But I do not, I don't have a solution, as where I am now. How would that look like later on or the situation's so fluid and no one is able to predict when exactly is it going to...

Seth Schindler But that's a great point I mean that's a major difference between now and the early 1980s, I think perhaps that as you mentioned earlier this feeling or the integration and the connectivity and perhaps this common working together with common purpose that might not have been the case in the 1980s. So hopefully that will make a difference.

Amani Abou-Zeid Absolutely, I told you under Covid it made a difference. And even now as we speak we are coming together again as one continent with a common position on energy, like last year we had a common position on vaccines and under crisis we have been I'm seeing some positive dynamics also taking place, so hopefully also this will extend to the current crisis. And speaking of the 1980s and 1990s, what happened and still happened you know since 2020, that's more than three years now or soon three years, compounded crises of different natures and the continent is still standing. That is also a witness of the continent's resilience. That demonstrates how important were the reforms and improvements that happened over the 20 years before.

The hope is that not to continue this pressure or what we hope is that not to continue this pressure, not because we don't want to lose all the gains we've had over 20 or 30 years. So, so far we're resilient but let's not, you know, I hope that what would it take you now for things to ease up for Africa and for everybody else? Because everyone is suffering around the globe.

Seth Schindler Well let's end on that positive note of the dynamism and the resilience that we see in Africa today. As always it was really a pleasure speaking with you Dr Abou-Zeid, Amani, sorry. Thank you very much. It was really great to speak with you and hopefully we'll have you back sometime in the future.

Amani Abou-Zeid Thank you very much Seth, I enjoyed speaking to you, but we will have to have another podcast very soon because I want to talk to you about the rallies, the desert rally, I want to talk to you about you know the mountaineering and mountain climbing, about music about so many other things, African fashion, yes, we have so many exciting things to talk about so yeah, this one and then hopefully I will have the pleasure of talking to you very soon.

Seth Schindler I look forward to it. Thank you so much.

Amani Abou-Zeid Thank you Seth.

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