How EAC can benefit from its Critical or Transitional Minerals

The EAC has vast deposits of minerals critical to driving technology to support the green industrial revolution and yet the region lacks a proper framework to govern and maximize benefit from this mineral potential.  Our analysis shows that all is not lost. There is still an opportunity for the EAC to reorganize and take a share from the increasing critical or transitional minerals demand.

By Moses Kulaba, Governance and Economic Policy Center

@critical minerals @mineralsgovernance @eac 

What is the EAC’s regional problem?

Critical or transitional minerals are loosely defined as mineral commodities that have important uses to industrial technology to support the transition to a clean energy future, have no viable substitutes, yet face potential disruption in supply. These minerals include (but limited to); Graphite, Coltan, Nickel, Tungsten, Tantalum, Tin, Lithium, Manganese, Magnesium, palladium, Platinum, Beryllium, copper, fluorspar, Holmium Niobium, Rhodium, Titanium, Zinc etc. The EAC has vast deposits of some these and yet the region lacks a proper framework to govern and maximize benefit from this mineral potential.

Minerals as a national resource vs regional resource

The issue of mineral is politically sensitive. It lies at the intersection of national pride and sovereignty. Minerals are considered as a national resource whose value cannot be discussed or shared at regional level. Most countries have chosen to address mineral issues at a national level, carefully safeguarding what they consider their national interests.

Unfortunately, by taking this route, EAC mineral rich countries have exposed themselves to weaker negotiation power, and fallen easy prey to the divide and rule game played by some quick profit accumulation seeking multinational mining companies.  These mining companies take on each country as an independent jurisdiction, setting each up for competition against the other and demanding exorbitant favorable terms to invest.  The net effect is that EAC mineral rich countries have weaker negotiating powers and signed off bad deals. It is perhaps for this reasons that the EAC has selected to focus on protecting aquatic and terrestrial ecosystems such as forests and mountains in shared areas.

Raging political instability and counter accusations for harboring insurgents.  East Africa’s mineral rich regions face raging political instability, with each member states accusing the other of supporting and harboring hostile insurgent’s, violation territorial sovereignty and plundering of the abundant mineral resources.  For example, the DRC accuses Rwanda of supporting the M23 in Eastern Congo while Rwanda has constantly accused the DRC of harboring the FDRL. Similarly, Uganda’s Ailed Democratic Forces (ADF) rebels have found refuge in the DRC.  Burundi accuses Rwanda of supporting hostile rebel groups against the Burundi government. As a consequence, EAC’s mineral rich regions have failed to secure maximum economic benefits from its mineral wealth. Efforts to jointly pacify the region through a military intervention by the East Africa Regional Standby Force failed miserably with the force withdrawn at the end of 2023.

Failure to curb cross border smuggling and illicit minerals trade.  The UNCTAD data from COMTRADE and other online sources show a big difference between reported mineral exports and imports data from receiving countries. For example, in 2021 the DRC reported exporting a net weight of cobalt of 898,869 kg valued at USD 3,277,615 while China reported importing a net weight of 190032 kg valued at valued at USD92,065, 332 in the same period. The difference between the reported export value by the DRC and the reported import value by China was a whooping USD 88,784,717. There are large disparities between the DRC’s minerals trade data with Dubai and similarly Kenya’s mineral trade data with Dubai.

Yet, the vice has continued unabated. The recent arrests of fake gold traders in Nairobi’s upscale Kileleshwa suburb confirms that illicit mineral business is rife in the region. Illicit minerals are crossing borders undocumented, with cartels exploiting the weaknesses in the border control mechanisms to make shoddy deals worth millions of dollars. The arrested illegal mineral traders had fake Uganda Revenue Authority (URA) documents and stamps showing that Uganda was the source country. There are reports that DRC’s gold and coltan is smuggled through Rwanda and Uganda. Rwanda , a fairly none rich mineral country is a large mineral exporter. According to government reports, Rwanda’s annual mineral export earnings in 2023 was USD1.1billion reflecting a 43% increase from USD772bln in 2022. Clearly illegal trade is denying the EAC millions of dollars in economic benefits.

Lack of regional harmonization of the extractive sector regulatory framework. There were attempts to develop a model minerals legislation but all these efforts suffered a silent death. As expressed by one of the EAC members of parliament, Arusha has become a cemetery of good policy intentions. Good at expressing desire and slow at action and implementation.

Poor geological survey data, compared to superior data sets in possession of mineral companies. This has often tilted the negotiation power balance in favor of the companies, leading to signing off poor deals by mineral rich host countries.

What opportunities exist?

 Maximizing on current EAC partners trade in minerals and mineral based products.

According to EAC regional statistics, the trade by EAC partner states in minerals fuels, mineral oils, products of their distillation, bituminous substances and mineral waxes were the most traded with a value of USD810.7million dollars in 2022. This was followed by trade in natural or cultural pearls, precious or semi-precious stones, precious metals valued at USD588.3million. Trade in nuclear reactors, boilers, machinery and mechanical appliances thereof ranked third with a value of USD238million[1]

This therefore shows there are a raw material and there is a market for mineral based products even within the EAC.  Scaled value addition and intra trade in minerals and mineral based products to serve the existing demand can significantly boost internal regional industrialization, create jobs and economic growth

Leveraging on current and future global critical/transitional minerals demand

With a regional approach, the EAC could benefit from the rapidly expanding demand and prices for green transitional minerals. Since 2020 the global commodity prices for Nickel, Cobalt, Coltan, Lithium and Copper has been on the rise. According industry experts, such as Equity Group’s CEO, Dr James Mwangi, the demand for these minerals can only go up, and prices can only go up because of their limited supply versus the global targets to reduce emissions by 2030. It is for this reason that global consumers such as China, Australia are in the rush to secure supply chains all over the World.  Tech players such as Tesla’s Boss, Elon Musk have equally explored possibilities to establish plants in the DRC and Tanzania so as to secure the raw materials and add value at source. So far, neither the EAC nor its member states have capitalized on these interests to develop a regional road map for investments into the green or transitional minerals subsector. Elon Musk’s investment plans have not materialized.

Use critical/transitional minerals demand to forge new strategic economic relationship

According to the Carnegie foundation, the combination of key mineral endowments in African countries and U.S. objectives to reorient clean energy supply chains away from competitors like China can serve as the foundation for a new economic and strategic relationship. In 2022 the US announced its desire to re-establish a new relationship with Africa driven by trade and investment. The EAC can use its abundant critical or transitional minerals potential to negotiate new long-term relationships based on mutual economic benefits away from the traditional donor recipient approach.

Attracting investments in Energy Sector

The EAC has large opportunity for investment into its renewable energy sector. Uranium, a key fuel in nuclear plants and nuclear fission, is found in eight locations in the South Kivu and Katanga provinces in the south of DRC. Tanzania and Uganda have large deposits of Uranium. These clean energy minerals are also backed with hydropower potential of the giant inga dam and Kenya’s geothermal potential.

The EAC commits to development of the energy sector covering both renewable and non-renewable energy sources. This is aimed at facilitating the broader EAC objectives of attracting investments, competitiveness and trade for mutual benefit. Despite this, there has not been joint EAC investment attraction drive purposed towards its regional power potential.  The regional plans to develop the giant inga dam as a flagship Agenda 2023 project contributing to the towards East Africa’s power pool have remained stagnant.

What EAC member states can do

  • Abandon limited nationalistic views and pursue large economic interests, from a regional lens
  • Conduct regional mapping and improve mineral geodata sets
  • Rekindle and accomplish plans to develop regional frameworks for mineral governance
  • Facilitate regional investment campaigns profiling critical minerals and clean energy sources as tier one commodities available for investment for the EAC
  • Stop the guns and think development

What would be the benefits of acting as an EAC region

  1. Joint investment promotions and attraction of the best investors
  2. Increased negotiation power and leverage for better deals
  3. Expanded regional value additional chains and industrial projects driven by large economies of scale. According to global statistics the DRC was the largest cobalt reserve (about 3.6million metric tons yet China was the largest processor(85Mt)
  4. Increased cooperation and opportunities for lasting peace
  5. Expanded economic opportunity and benefit for citizens.

 

[1] https://eac.opendataforafrica.org/

Critical Minerals: EAC destined large critical minerals block, yet benefits remain elusive

With the DRC and Somalia on board and new coltan discoveries made in Kenya, the East Africa Community (EAC) is now destined to become one of the largest critical minerals deposits rich and source region in the world, yet maximizing value and benefits as region remains elusive.

By Moses Kulaba, Governance and Economic Policy Center

@criticalminerals @energytransition

On the 15th December 2023, the Federal Republic of Somalia became a full member of the EAC becoming the 8th country to join this economic block. With its admission following closely on the DRC in 2022, the EAC has a total population of 320 million people with a geographical size of about 5.4million sqkm straddling from the Indian Ocean coastline to the Atlantic coastline.

The EAC now boasts as one of the largest single economic block with large deposits of minerals critical for mitigating climate change by driving the green industrial revolution and transition to clean energy. There are already prospects that Ethiopia and Djibouti will be joining the EAC. If this happens the EAC’s geographical size, population and mineral wealth will expand to rival or overtake other economic regions such as the European Union.

The size of Mineral Deposits combined

According to the EAC reports, the region is endowed with a variety of minerals, including fluorspar, titanium and zirconium, gold, oil, gas, cobalt and nickel, diamonds, copper, coal and iron ore. Such mineral resources present an opportunity for development of the mining industry, which is currently underdeveloped.

Mineral Resources in EAC

Country Precious metal, Gemstones & Semi-Precious Metal Metallic Minerals Industrial minerals
Burundi Gold Tin, Nickel, copper, cobalt, niobium, coltan, vanadium, tungsten Phosphate, Peat
Kenya Gemstones, gold Lead, zircon, iron, titanium Soda ash, flour spar, salt, mica, chaum, oil, coal, diatomite, gypsum, meers, kaolin, rear earth
Rwanda Gold, gemstones Tin, tungsten, tantalum, niobium, columbium pozzolana
Tanzania Gold, diamond, gemstones, silver, PGMs Nickel, bauxite, copper, cobalt, uranium Coal, phosphate, gypsum, pozzolana, soda ash, gas
Uganda Gold, diamond Copper, tin, lead, nickel, cobalt, tungsten, uranium, niobium, tantalum, iron Gypsum, kaolin, salt, vermiculite, pozzolana, marble, soapstone, rear earth, oil
South Sudan Gold, silver Iron, copper, tungsten, zinc, chromium Oil, mica

Source: EAC Vision 2050 and South Sudan Development Strategy

With the pressure of climate change and the 4th industrial revolution driven by a few green minerals, the EAC hosts vast deposits of minerals such as coltan, nickel, tantalum, copper and others vital in driving the green technological revolution to a cleaner energy future.

The admission of the DRC to the EAC was a game changer to the region’s positioning as a global player in the critical and strategic mineral’s space.  According to multiple sources the DRC is the world’s leading producer of cobalt, used in the manufacture of batteries. It is also the world’s fourth-largest producer of copper, used in the assembly of electric cars and the infrastructure of most renewable energy sources. Lithium deposits, estimated at over 130 million tones, are also present in the southeast.

The DRC has most of the mineral ores that produce key components in making computer chips and electric vehicles, technologies that are powering the drive to the future. In a typical computer, copper and gold are key components used in making the monitor, printed circuit boards and chips. Cobalt constitutes 6.45 percent of the materials that make electric vehicle batteries while copper constitutes 25.8 percent. Jointly, copper and cobalt constitute more than a third of EV batteries.

DRC is rich in these minerals, producing 68 percent of the world’s cobalt — the largest globally — and over 1.8 million tons of copper annually. Copper is estimated to gain and maintain more value on longterm compared to other minerals.

Before the DRC and Somalia’s membership, the EAC was already a major player. According to Geological Survey of Tanzania, Tanzania has close to 24 documented critical minerals such as Nickel, Tantalum and sits on the 4th largest premium grade graphite deposits in the world. Between 2005 and 2020, there was an exploration boom relative to other minerals for Tanzania’s Critical Minerals.

Uganda has vast deposits of copper and tungsten in its south western border areas while Rwanda is one of the world’s largest producers of tin, tantalum, and tungsten (3Ts) and coltan. Burundi has copper, cobalt and nickel in 2019, Burundi produced about 2% of the world’s production of tantalum.  Kenya has vast deposits of titanium, a mineral used in the manufacturing of aircraft transportation and solar panel parts. The new discoveries of coltan announced in Embu County in 2024 adds to Kenya’s list of valuable minerals. Although the commercial volumes of the new discoveries are yet to be determined, Kenya’s announcement expands the EAC’s critical or green mineral deposit map and its role in the green energy transition. Somalia, the EAC’s new entrant has some deposits of tantalum, tin and uranium.

These minerals lie along a common geological mineral belt running from Ethiopia and South Sudan downwards across the DRC, Uganda, Kenya, Rwanda, Burundi and Tanzania into Mozambique. The combined volume of these green minerals’ deposits competitively will rival other countries like China, Australia and regions such as the Lithium triangle in Latin America.

Given the global challenges related to climate change and the potential transition to a clean future. Energy Security and Energy transition are among the hottest areas of investment. The dash to secure deposits and supply chains of minerals critical to the development of green technology is on. Many countries endowed with these minerals are seeking to create wealth based on this transition.

Despite this critical mineral resources’ wealth, the EAC has failed so far to leverage and maximize economic benefits as a single region remains elusive. The EAC’s share of global investment in this lucrative extractive sector remains small. The EAC is riddled with extractive policy fragmentation, overriding nationalistic political desires and catastrophic death of joint extractive policy and governance actions.

According to the EAC treaty, the EAC partner states have agreed to take concerted measures to foster co-operation in the joint and efficient management and sustainable utilization of natural resources within the Community. Yet the EAC has no publicly available documented comprehensive regional plan on governing or managing mineral resources. The EAC has focused on management of aquatic and terrestrial ecosystems.  Minerals are categorized as other natural resources.

By treating Minerals as a somewhat lesser regional priority, the EAC is missing out on a huge current and future economic opportunity internally and externally to drive the region to prosperity. We will discuss more about what these opportunities are and how the EAC can benefit in a separate article. Keep reading.

 

Democracy under attack: Revisiting the 10 principles for a democratic culture and elections in Tanzania

Democracy is said to be good yet democracy everywhere is under attack.

 

By Moses Kulaba, Governance and Economic Policy Analysis

@politicalgovernance

With reducing citizen trust in democratic processes such as elections, and institutions such as political parties and parliament, demonstrated by increasing voter apathy, the concept of participatory democracy is slowly fading away. Democracy is gradually being replaced by moneyocracy as only those who are financially endowed can buy themselves into positions of leadership. Democracy is now expensive and painful to participate.

The emerging question therefore is how can we rekindle this old tradition which was built on a philosophy of freedom of citizens right to vote leaders and participation, and in a government for, by and of the people? How do we make it endearing to citizens and particularly young people, who have lost touch and interest in democratic processes of governance.

In 2000, under a project, ‘Agenda Participation 2000’, we developed what we called the 10 principles for a democratic culture and conflict reduction in Tanzania. The principles were developed based on the universally accepted democratic principles mimicked on the mosaic biblical10 commandments.  The purpose of that initiative was to bring back Tanzania on a straight path to democracy.  After the 1992 political reforms that introduced Multiparty democracy and a successful first general election in 1995, Tanzania was slipping away. We had witnessed electoral violence in Zanzibar on a scale never seen before. Democracy in Tanzania was at cross roads.

Since then, we have witnessed some progress but also regression in many respects.  Between 2002 and 2015, democracy thrived, recording a surge in the power of opposition political parties such as the Civic United Front (CUF) in Zanzibar and Chadema (Movement for Change) on the mainland.  But this wave, was temporary. Between 2015 and 2020, political space was curtailed, political mobilization and freedom was gaged, opposition leaders were persecuted and democracy suffered. The 2020 elections were judged by observers as not free and fair.

After the assent of President Samia Suluhu Hassan to power in 2021, we have seen some opening up of the democratic space and a semblance that Tanzania may be regaining its feet back to democracy. A ban on political parties’ meetings was lifted, political dialogue encouraged, jailed opposition political leaders released and exiled ones allowed to return.

Despite this progress, gaps still remain and democracy feels under attack. The monetization of politics makes access to political opportunity and meaningful participation far from the grip of the poor citizenry.  The rich bought the politics and its votes

Moreover, the clampdown on democracy between 2015 and 2020 disrupted political organization, scattered its leadership into exile, shut down on the media, persecuted human rights activists and effectively reduced youth motivation to engage in active democratic processes. The dominant single party structures and constant assail on the opposition reduced chances of fair play. Hopes that democracy was an answer to good political governance were dashed.  In Tanzania, power belonged to the ruling party.

Yet, the constraints on democratic values, principles and rights are replicated everywhere in other neighboring countries across East Africa. Tanzania is not alone.

In Uganda, the political space has always been constrained in favour of the ruling National Resistance Movement (NRM). Democracy is restricted. Opposition political mobilization and participation under the Forum for Democratic Change (FDC) and the National Unity Platform (NUP) has suffered catastrophic repression. A culture of democracy is dead. Electoral processes are flawed and elections are often rigged.   

Faced with an uncertain political future many citizens have given up to political fate and divine destiny for change to happen. Many youths seek political correctness using unconventional means.   While some still cling on the concept of ‘people power’ others now identify with government aligned political movements such as the MK movement or the MK Patriots, with hope that these can usher them into power and deliver a new hope. For Uganda, elections are a joke, the military is the major political determinant-it is now widely believed.

In Kenya, the citizens, particularly the poor and youth hope for a brighter future under the Kenya Kwanza government seems to have faded as it became increasingly apparent that the promises made during the elections of a ‘bottom up’ approach of government may never be fulfilled after all. Politicians are the same-Always old wine in new bottles-it is now commonly said.

Generally, the future of democracy is uncertain. It is under these uncertain conditions and fore boarding reasons that the principles of a democratic culture are revisited and repurposed for citizens. Despite its weaknesses democracy is good and still the best alternative to tyranny. Our political future can never be written through other means apart from elections.

The politicians and systems may be corrupt, abused and weakened but democracy must never be allowed to fail. As citizens, we still have these principles that can serve as anchors to a better political democratic future. These we must learn, apply and uphold.

The Ten Principles for Democratic Culture revisited

  1. Participation: Where all citizens have the opportunity and responsibility to actively get involved in matters that affect their wellbeing.
  2. Consensus: There is a common understanding of dissenting views expressed by different segments of society, political class, citizens or members of a given community
  3. Transparency: Citizens have a right to know. Conducting management of public affairs must be open. Those entrusted to govern must explain their actions to citizens
  4. Rule of Law: Where none is above the generally agreed norms, rules and statutory instruments of society. These rules must be applied and enforced without discrimination.
  5. Truthfulness: leaders can be trusted and are responsible in how they conduct and manage public affairs
  6. Culture of Competition: Freedom to compete and accept defeat without recourse to undemocratic means. A winer this time can a be a loser next time.
  7. Equal Opportunity: Every citizen has equal access and opportunity to use and benefit from available resources, without discrimination
  8. Integrity: Public resources are not for private gain. Their allocation and use do not favor a few and especially those in power. Those who control them are trusted.
  9. Human Rights: The respect of the fundamental rights that a person has by virtue of being a human. Not given or taken away by the state or those in authority and power
  10. Civic Competency: Ability of citizens to engage, question and seek explanation from their leaders in regards to how decisions are made, resources allocated and used. Citizens demand accountability where generally standards, norms, values and expectations of conducting public affairs are abused.

The EU 12 principles of Good Governance[i]

Mirrored on the above, the EU has developed what it calls the 2 principles of good governance.

The 12 Principles are enshrined in the Strategy on Innovation and Good Governance at local level, endorsed by a decision of the Committee of Ministers of the Council of Europe in 2008.

These 12 principles are:

  1. Participation, Representation, Fair Conduct of elections
  2. Responsiveness
  3. Efficiency and Effectiveness
  4. Openness & Transparency
  5. Rule of law
  6. Ethical Conduct
  7. Competency and Capacity
  8. Innovation and openness to change
  9. Sustainability and long-term orientation
  10. Sound Financial Management
  11. Human Rights and Cultural diversity
  12. Accountability

The EU refers to these as the fundamental values of European democracy and requirements for Good Democratic Governance.  However, we argue that these values are cross cutting and must be respected in every modern society. A democratic culture can be rebuilt and strengthened.

What can citizens, governments and civil society do?

In advancing these democratic principles different stakeholders can do the following

Government

  • Safeguard of these principles as bare minimums for governance
  • Establish and facilitate institutions and processes to serve and advance these principles
  • Be responsive to citizens demands for accountability

Citizens

  • Exercise their duty as citizens
  • Oversight that they are not diluted
  • Demand and enforce accountability by calling those in power to order and using their democratic right to vote the rouge ones out of power.

Civil Society

  • Promotion of these principles so that citizens are aware and civilly competent to demand and exercise them
  • Oversight that they are not derailed or diluted by anyone (states, governments and the political class)
  • Demand application and accountability

As a new wave of democracy sweeps across Tanzania, with forthcoming elections and a generation of new younger leaders beckons in Africa, there is and must be an opportunity for doing things right. If we don’t revisit our principles, adopt and exercise them, Money and AI will run our democracies. Money mongers and Robots will become our leaders and gradually democracy and freedom will be killed.

[i] https://rm.coe.int/12-principles-brochure-final/1680741931

Tanzania’s new political and electoral reforms : A step to the right, a high jump to go!

 

In early February 2024 the Tanzanian parliament made sweeping electoral reforms by passing three bills governing elections and political parties in Tanzania. If ascended and signed by the President into law, these reforms usher a new political era in Tanzania’s electoral history. However, one major leap to the front remains to cement Tanzania’s political landscape and electoral democracy for the better. Simply put the new reforms are a one step to the right or left but a higher jump is required.

The three bills passed are; The National Election Commission Act 2023, Presidential, Parliamentary and Local Government Elections Bill (2023), The Political Parties Affairs Laws (Amendment) Bill (Amending the Political Parties Act RE 2019 and the Elections Expenses Act, 2010). Among the reforms passed under these bills include;

# Introduces a new and separate law governing the National Electoral Commission. Previously this was covered under the National Elections Act, which seems to be overhauled by the new law.

#  Changing the name of the electoral body from the National Electoral Commission to the Independent National Electoral Commission (INEC).  The spirit of this is to rebrand the National Electoral Commission as a modern independent electoral management institution, capable of delivering on its mandate with minimal potential interference from the executive

# Changes to the selection process of the commissioners via a competitive hiring process presided over by a competent independent selection panel chaired by the Chief Justice of Tanzania Mainland and Chief Justice of Zanzibar as its Vice Chairperson. Previously these were solely appointed by the President.

# Introduces procedure for people to apply for positions at the electoral body.  Under the new proposed law, the position for Director of Elections will be open for all competent citizens to apply and subjected to an interview process whereafter three names will be proposed to the President for appointment. The purpose of this amendment is to detach the electoral commission from the direct ambits of the sitting President, who could also be a running candidate in an election process.

# Amendment of the law to remove a mandatory requirement for City Directors, Municipal Directors, Town Directors, District Executive Director (DED) to serve as returning officer at the district level. Under the new law, any competent officer or person can be appointed or assigned to preside over elections as a returning officer. The purpose was to address the long outcry over potential conflict of interest and lack of separation of the executive from the electoral processes. This matter had been a subject of litigation in courts but without success.

# The removal of automatic declaration of unopposed candidates as winners of an election. The new law requires that even unopposed candidates will still be subjected to a vote. If the number of opposed votes and more than in favour, the candidate cannot be declared the winner. The purpose of this was to avoid political favoritism, political intimidation or buying off of political opponents, and imposition of certain candidates on voters who may not be necessarily the best or favorite candidate for the voters.

By initiating and allowing this process to continue unhindered, President Samia Suluhu Hassan proved that she is a democrat par excellence.  President Samia demonstrated mastery of the political landscape and that she was committed to setting Tanzania on a trajectory of political and electoral reforms at a pace and standard unprecedent before by any of her predecessors.

Perhaps serving as a Vice Chairperson of the previous Constituent Assembly in 2014 and listening to the divergent views, she was exposed to the political pitfalls that dogged her country and always remained endeared to the ideas for urgent political reforms.

Key gaps remaining

Running on this inertia, President Samia can take a key leap to the front by reviving the defunct full constitutional review process towards a writing and adoption of a new Tanzania constitution.

The previous attempt at writing a new constitution suffered a still birth.  After months of collecting citizens opinions and debates by the Constituent Assembly costing billions of shillings, the political gulags killed the process before it could deliver a new constitution. Without major changes, the current new reforms will be curtailed by the Constitution limitations that exist.

A comparative study of Electoral Management Bodies (EMB) conducted by the Governance and Economic Policy Center (GEPC) in 2020 showed that despite some progress, Tanzania failed or fared poorly in many areas and required a major overhaul.  (Read more: https://gepc.or.tz/2020-general-elections-key-electoral-reforms-tanzania-must-take/

When ranked on the common standards and guidelines for electoral management and regulation of political parties developed by the European Commission for Democracy, Tanzania scored unfavorably compared to its neighbors South Africa, Kenya and Nigeria on a number of major electoral management and dispute resolution in the following aspects.

  • Direct appointment of the Chairperson and Vice Chairperson of the Electoral Management Body with out subject to an independent public vetting process
  • Tanzania’s electoral management body had curtailed or restricted powers to organize only Presidential and parliamentary elections. The Minister for local government was responsible for organizing and coordinating local government and municipal elections. The Minister appointed returning officers.
  • The prerogative of finality of decisions made by NEC and Zanzibar Electoral Commission (ZEC) was a major lacuna in Tanzania’s electoral law compared to its neighbors. NEC and ZEC have the exclusive powers to announce Presidential and parliamentary election results. Announced Presidential elections are not subject to challenge in any court of law. This is viewed as an infringement on common standards of democratic practice, rule of law, natural justice and democratic rights to a fair hearing. The exercise of finality of decisions can also be confusing, especially where it concerns matters that can be of concern to both institutions. A case to remember was the ZEC Chairperson’s decision to annual the 2015 Presidential election.
  • Limitations on Independent Presidential candidature. The current constitution and election laws restrict this candidature to members belonging to a political party
  • Lack of clarity and potential clash in the roles of the Electoral Management Body (EMB) and the Office of Registrar of Political Parties (ORPP) during election campaign period and civic education.

What it will take for reforms to succeed

For the new reforms to succeed, Tanzania needs to unpack the current constitution to ensure that its provisions are in synchrony with a new democratic dispensation.

The President will need to address the chronic single party mentality that exists amongst some political party cadres and state operatives.  Many of these are not tolerant to opposing political thought. They may not fully embrace the reforms let alone allow the INEC to function without impediments.  Guard rails must be set for what they can or cannot do  

Safe guarding of women in elections and political parties by ringfencing of women leadership positions in political parties. This must be followed by redesigning the concept of affirmative action by setting term limits for women serving in nominated positions in parliament and local governments as councilors for women and special seats.

Restriction on the use of national resources such as state media and the use national security forces and agencies to support a given political party or its candidates during elections.  This matter is considered sensitive but one that needs to be dealt with.

Moreover, our comparative analysis in 2020 showed that a mere change of name does not fully address electoral management, fairness, transparency, and dispute resolution.  Changes of the electoral body’s name from National Electoral Commission (NEC) to Independent National Electoral Commission (INEC) must be followed by the political will and support to enable its independent functioning.

Experiences from Kenya show that changes in the name did not succeed in fully addressing the underlying crevasses and politically charged currents that faced the electoral body. Kenya’s Electoral commission still faces accusations of political bias and state capture. All presidential elections since 2017 have been subjected to dispute and court adjudication.  Its commissioners and executives face electoral violence, persecution and accused of presiding over botched election results. Tragically, some have been killed while others live in exile because of election related persecution.

As Tanzanians and the political class celebrate these new reforms, we must always be reminded that this is temporary and more steps must be taken. Tanzania is yet to come a full circle as a democratic country. Tanzania has and can still set a new bar higher with a full constitutional review.

Tanzania’s offshore wind and tidal energy potential: How Tanzania can become a wind and tidal power giant

 

Tanzania faces acute electricity energy supply yet with investments in offshore wind and tidal waves projects, the country can turn fortune by generating extra electricity supply and ridding a straight path into a clean energy future.

By Moses Kulaba, Governance and Economic policy center

@climate change , energy transition and COP28 series

According to Global Information Systems (GIS) reports Tanzania has strong offshore winds capable of generating up to 17Gwh and estimated tidal stream power of 133 kW/m.  Yet this potential lies idle and unexploited.

At least 60 % (2/3) of Tanzanians lack access to power and in recent years and months, power rations have worsened, lasting for over 12 hours as the national grid suffers from acute shortages due to overloads and deteriorating infrastructure. The situation is worse in 2023 compared to five years ago and has affected Tanzania’s economic production and growth substantively. According to the world bank the cost of power outages in Tanzania cost businesses about 15% of annual sales and millions of dollars to the national economy.

The energy shortage also affects the semi-autonomous territory and tourist hotspot Zanzibar, which is heavily reliant on the mainland Tanzania for its electricity generation and supply. Both Unguja and Pemba are completely reliant on power purchased from TANESCO through submarine cables of 100 MW and 25 MW capacity, respectively.

Zanzibar lacks its own power generation facilities, and electricity is supplied from mainland Tanzania by the 132kV undersea cable.  The cable has reliability and maintenance challenges sometimes plunging the entire Island into a total power blackout. As a partial mitigation against this risk, Zanzibar Electricity Company (ZECO) maintains 25MW of grid-connected high-speed back-up diesel generators. Most hotels, offices, industries, and various private sector consumers have their own captive emergency diesel generators to supplement in situations of power outage. However, the cost of maintaining these is high and their constant emission of poisonous fumes during operation is dangerous to the environment. Offshore wind and tidal electricity would help Zanzibar wean itself from over reliance on the mainland’s Tanzania National Electricity Supply Company (TANESCO) as the National grid has been perpetually facing power shortages.

As of the year 2021 Tanzania’s total electricity supply was 1605.86 MW. Peak electricity demand in the country is expected to roughly quadruple by 2025 to 4,000 MW. To help meet this demand, Tanzania is targeting installed capacity of 10 GW by 2025. However, maintenance issues and climate change-induced water shortages have caused a 400-megawatt electricity shortfall in Tanzania, triggering power rationing across the country. For many Tanzanians, it is repetitive cycle of darkness. The sun rises and there is no power. It sets and it’s pitch black – in fact, according to government data at least two-thirds of Tanzanians don’t have access to electricity.

Developing of wind shore and tidal waves electricity generation capacity would be a win-win situation for both Zanzibar and Mainland, as it would supplement the much-needed electricity during peak hours and reduce on the heavy burden imposed on the national grid, providing power to many customers who need it.

Moreover, these projects if developed, would be a game changer for the Country’s  energy sector. They would catapult the country long steps ahead of its peers in achieving its energy access goals, and meeting its Nationally Determined Contribution (NDC) Goals on the road to clean energy transition. For this to happen, some deliberate political and policy choices have to be taken.

Why offshore wind and tidal power is important

There are questions about intermittency and whether technology exists to support investment into Tanzania’s offshore wind and tidal wave potential. Our basic analysis suggests that projects of this nature would be viable and worth giving a try.

The United Republic of Tanzania (URT) is the largest country in East Africa, located between longitude 290 and 410 East and Latitude 10 and 120 South. URT has a Territorial Sea of 64,000 km2 and an Exclusive Economic Zone (EEZ) of 223,000 km2, which is about 24 percent of the land area. Tanzania has a total coastline of 1,424 km running along the Indian Ocean, with an average wave energy potential of 7.5KW/m and theoretical potential of 94TWh/y. The coastal population is estimated at 30% of the total population, providing a huge potential for the generated electricity.

Tanzania has both shallow waters close to its coastline which would allow offshore wind projects development under the current technology and an extensive Exclusive Economic Zone (EEZ) off Zanzibar’s shorelines ideal for anchoring deep water floating platforms to allow it to access wind resources at much deeper water depths across its entire EEZ. The government is open and has been encouraging investment in its current EEZ. However its current investment drive has targeted the fisheries sector. With an extended offshore coastline and Exclusive Economic Zone (EEZ) running off Zanzibar, Tanzania has unique advantage compared to its regional neighbors.

From a cost perspective, offshore wind and tidal wave projects are viable. There is much more wind on the shoreline than on land, with an average of speed of more than 50m. Evolution of turbine technology, installation experience has allowed economies of scale and costs of wind power generation has gone down significantly. It is further projected to reduce by 40% over the next decade.

Moreover, the levelized cost of selling power on the market has gone down significantly as economies of scale for wind turbines have grown. The cost of selling electricity has come down to approximately $50/Mwh. Therefore, wind energy now is one of the cheapest generated powers compared to gas combines cycle, coal and considerably cheaper than solar PVs.

Globally, wind generated power is projected to grow as countries ramp up their clean energy generation in line with the road towards net-zero by 2050. This a trend that offshore wind technology will rapidly become cost effective renewable energy technology and a good option that developing countries can consider when developing pathways towards decarbonizing their electricity supply-system.

Tidal energy will also be a good option. Ocean tides are generated by tidal raising forces associated with gravity and centrifugal forces and the earth’s orbiting system or position  relative to the sun and moon. When these two bodies are in balance there are unbalanced forces on the surface of the earth that can push the ocean water left and right, causing tides. Tidal energy is taken from the kinetic energy of these orbiting forces to generate power. The orbits systems and tidal movements can  be predictable years in advance and for this reason, it would be possible to estimate ahead when and how large the tides would be and the possible amount of electrical energy generated would be.

The offshores of Zanzibar lie in the belt with high M2 tides with 1-2-meter-high tidal amplitudes capable of generating a lot of power. Combined wind and tidal power could serve as a major Peaker, supplying offshore wind and tidal generated electricity during the peak hours. Evidence from the United States, United Kingdom and Canada suggests that an integrated energy system of this nature can be a game changer in addressing energy shortages, and driving the country towards a cleaner energy generation

What is required to make it happen?

  1. National Energy Policy and Strategy review and orientation towards offshore wind and tidal wave energy development. This would mean placing offshore wind and tidal wave power generation as part of the national energy systems power mix plan.
  1. Supporting institutional framework by breaking up TANESCO and ZESCO to curve out an independent agency responsible for offshore wind and tidal power. An agency similar to the US Bureau of Ocean Energy Management (BOEM) would be given a focused mandate to develop offshore wind and tidal wave power sector by mobilizing resources (technical and financial), attracting private sector investment and regulation, decreasing developer risks and encouraging inter-agency and stakeholder cooperation.
  1. Another policy direction would require the government to purchase at least given minimum amount of offshore wind and tidal wave capacity. The new agency would be tasked with delivery of such an amount to the National or Zanzibar power grid. This would provide a room for long-term off take Power Purchasing Agreements (PPA), decreasing major sources of uncertainty for project developers.
  1. Government to conduct necessary further research to support offshore and tidal wind projects. This would include update data collection to determine the costs benefit of offshore wind and electric systems configurations, site characterization, and dissemination would be required. Tanzania lacks marketable data.
  1. Political will and determination to explore new energy frontiers and commitments to a clean future. Although there could be some political sensitivities between the mainland and Zanzibar as towards having projects of this kind because the Union matters political configuration, the economic benefits from this potential outweigh the political undertones. To counterbalance, strategic project of this nature could be anchored under the current governments (Union and Zanzibar) blue economy development plans.

 

 

Evaluating East Africa’s economic trends and outlook 2024: What should EAC governments do to reduce further hardships?

The East Africa Community is so far the largest economic block, with 7 members states with a vast territory straddling from the Indian ocean coast to the Atlantic Coast, with a staggering population of estimated 283.7 million citizens, 4.8 million square kilometers of land area and a combined Gross Domestic Product of US$ 305.3 billion[1], the EAC region is a big silent economic giant.  As of November, the UNDP estimated the EAC had 489,766,467 million people (6% of the total world population)[2], making it one of the fastest growing regional economic blocs in the world and number 1 in Africa among subregions ranked by population. Despite this potential, the region faces multiple economic and political setbacks.

In 2023, the EAC faced significant economic meltdown, with depreciating currencies, rising costs of living and political unrests, tainting the prospects for 2024. The rising cost of fuel, high costs of transportation and production, exerted high pressure on the cost of living, with inflation hoovering above 6% and reduced the region’s economic growth to around to about 3.3% in 2023. Already, the tight economic hardship has caused general anxiety across the East Africa region and social-political unrests in some countries such as Kenya.  Governments have experienced a crunch on revenue collections and significant reductions in external aid. They have resorted increasing taxation to shelter the governments against adverse effects of depreciating shilling against the dollar and heavy costs of borrowing which have surged over the past one year.

The latest World Economic Outlook report released in October predicts that the world’s economy will remain on a downward trajectory for the rest of 2023 and 2024, with the rate of growth decelerating to 2.9 percent next year, from this year’s 3.0 percent. Although the World Bank has predicted a positive outlook for East Africa, with a projected growth of 5.7%, amongst ordinary citizens, life is difficult and questions are everywhere. Where have governments gone wrong.

The purpose of this webinar is to facilitate public discussion assessing the current economic trend and government economic performance, with a view of influencing policy priorities, and practical economic choices that governments should make now to cushion its citizen against the rising cost of living and future hardships in 2024.  During this webinar our experts will paint an economic slate of the region and the extent to which socio-economic interventions such the Parish Development Model in Uganda and heavy taxation, can be a solution to the current and future economic quagmire facing the region. Most significantly, they will try to answer whether Kenya is headed to lose its economic mantra and Tanzania could emerge as new economic giant in the region

Expert Speakers

Dr Kasirye Ibrahim, Executive Director, Economic Policy Research Centre (EPRC), Makerere University, Kampala: Uganda’s experience: Are government social interventions such as PDM working to shelter the poor and vulnerable against poverty?

Expert perspectives on Uganda’s economy, the government interventions through projects such as the PDM and a quick glimpse of what 2024 could look like and what practical measures the government should take to avert the increasing economic hardships.

 

Mr Kwame Owino, Chief Executive Officer, Institute of Economic Affairs (IEA), Kenya: Can taxation be a solution and should we expect more taxes moving forward?

Perspectives on Kenya’s economy, the government’s economic hardship interventions and a quick glimpse of what 2024 could look like. With a depreciating shilling, dwindling FDI and choking debt are we likely to see more taxation in Kenya and this gradually snowballing across East Africa? Is there a significant risk that Kenya is or could fall from its pedestal as a major economic hub in the near future?  What practical measures should the government take to avert the increasing economic hardships across the country and the East African region.

Dr Mugisha Rweyemamu, Research Fellow, Economic Social Research Foundation, ESRF-Tanzania: Could Tanzania overtake its regional peers as the new regional economic giant?

Expert perspectives on Tanzania’s economy, the government’s economic hardship interventions and a quick glimpse of what 2024 could look like. With major strides made in attracting tourism, FDI and having a significant cache of valuable Minerals such as gold and green or critical minerals such as Nickel, Tungsten etc., could Tanzania overtake its East African peers to become a major economic hub in the near future?  What practical measures should the government take to avert the increasing economic hardships across the country and the East African region.

Hon: Zittto Kabwe, Economist and President of AcT-Wazalendo Political Party, Tanzania:  What is totally wrong-Could we expect economic-political unrest amongst the youth-What should political actors do to avert a near economic catastrophe and social uprising (Azania Spring) similar to the famous Arab Spring. Is an economic inspired Azania Spring inevitable if things don’t change?

Professional perspectives on the current economic hardships and what governments could do to avert further hardships in 2024. What are governments not getting politically or fundamentally right. In some countries such as Kenya we have seen some socio-political unrests over economic times, are we likely to see this ‘Azania economic springs’ in more countries in 2024?

Moses Kulaba, Convener, Governance and Economic Policy Centre

Can the EAC escape the current global economic meltdown, evade social-economic disruptions to remain soaring above its peers as the strongest economic subregion in Africa. What political-economic choices will make it maintain a comparative and competitive advantage against the tide

 

 

 Date: Thursday, 30th November, 2023

Time:  11AM-12:30 PM EAT

Registration and participation link: https://zoom.us/j/94699182519 

Meeting ID: 946 9918 2519

Passcode:  yJC673

 

[1] https://www.eac.int/overview-of-eac

[2] https://www.worldometers.info/world-population/eastern-africa-population/

Energy Transition: Why Africa must focus on Energy Aggregation and Consolidation

Historically, energy transitions have never meant one energy system completely replacing another rather one system reducing quantitatively amount of use in favour of another. The rise of coal ,the steam engine and petroleum did not end the use of traditional sources of energy such as firewood and horsepower.

By Moses Kulaba, Governance and Economic Policy Center

Delivering Charcoal in Uganda (Rod Waddington/CC BY-SA 2.0)

Globally, there is an increasing focus on climate change and energy transition. There is debate on the risks that these portend and an emerging view/ consensus that energy systems must transit gradually to achieve a net zero carbon emission   by 2050. Africa is at a dilemma, caught up in its realities and a myriad of contesting advice on which policy direction it should take.

This article attempts to deconstruct this increasing popular narrative on climate change and energy transition by arguing that it is unrealistic to achieve net zero by 2050 and a complete energy transition for Africa is impossible. Climate change may be real but achieving total decarbornisation by 2050 may be farfetched. I take this posture by looking historically at how previous changes in energy systems happened and Africa’s realities.

Chronologically, energy transitions are not new. They have happened before. Perhaps what make this possible transition quite significant is that it has been linked with the catastrophic climate change and global warming. This transition therefore is viewed as one of the remaining silver bullet to save the planet.  However, an analysis of historical trends and the manner in which the road to decarbonisation is framed and the narrative/view that energy systems must transit by 2050 is therefore problematic.

Historically, energy transitions have never meant one energy system completely replacing another but rather one system reducing quantitatively amount of use in favour of another. The rise of coal and the steam engine did not end the use of traditional sources of energy such as firewood and horsepower.

Between 1780’s to 1860’s whale sperm oil was a dominant source of energy for lighting before being replaced with the discovery of petroleum. This can be considered as the first energy transition after man discovered fire.  However, the two energy sources co-existed into the next century before petroleum became the dominant source. Whale oil did not disappear but retained value as a resource after the discovery of petroleum. In the 20th Century, Whale sperm oil was used for new purposes, including margarine, lubricants soaps, detergents, vitamins D and nitroglycerine, which is still in use today. 

According to Yale Professor, Paul Sabin, the discovery of petroleum is often cited as an example of an energy transition, where one fuel completely displaced another.  Yet this argument is totally flawed because the discovery of petroleum actually made it possible to hunt whales at a massive scale. The fossil driven ships could travel and conquer deep seas than before and stay their longer as merchant anglers trapped, caught and killed and stored whales in their thousands.[1]  There could not have been modern whaling before fossil fuels were readily available.

While the demand for whale oil declined after the discovery of petroleum, its demand continued to rise. By the 20th Century, sperm whale catch peaked in the 1960s to over 250,000 tones before declining in the 1970s and 1980s. Numerically, it took almost over 100 years between 1850 and 1980 for this gradual decline to happen.

Indeed, recognizing the pace at which the whales were fished for their sperms and other products to near extinction, in 1986, the International Whaling Commission (IWC), established in the 1940s,  banned commercial whaling because of the extreme depletion of most of the whale stocks. Even with the IWC ban in place, to date whales are still-hunted and killed for their sperms and other products, as was the practice during those mediaeval times. Japan left the IWC in 2019 and now hunts whales without any international restriction.

Moreover, historical data shows that the advent of both coal and petroleum as new energy sources  did not take animal powered energy systems out of the market. When goods carried by the coal fired steam engine train locomotive at the station, one needed horses to haul it to the final destination.  In the United States animal power increased with the number of horses and mules rising from 4.3 mln in 1840 to 27.3mln in 1920.

To date animal power continues to exist and still forms a major source of motorization in many parts of the world. Even with the advent of the advanced petroleum, based engines, in some parts of Africa, when goods arrive by bus, truck or lorry at the nearby road terminal one requires animal power (cow, horses, mules or camels to carry them the next mile to next village destination.

This suggests that different forms of energy systems are complementary to each other rather than antagonistic. One fuel has always added to another expanding both the energy supply and energy mix. The fossil-based systems will therefore continue to serve side by side with the clean energy systems.

In my Country, the two-wheeler petroleum powered motor cycle (Boda Boda) is slowly replacing the cow and donkey horsepower as major form of transportation linking the main road to the rural interior.  However, the cow, donkey and horse power are not going away too soon. In some areas the human power is still largely used with people carrying their heavy loads on their head or pulled carts.  The electric car is yet to arrive and will take long to dominate our major roads in the city and perhaps another 100 years to make it to the final mile into our villages. For Africa, therefore energy shift from animal and human-based power to fossil-based energy is just midway. It will therefore take many decades to leapfrog to a total clean energy system.

 Since the Paris Declaration, there has been an upscale in clean energy sources compared to the previous years. However, the pace at which clean energy is being deployed is too low to overtake fossil-based sources by 2050.There is evidence that not only Africa is doing badly on this front.

In its 2023 report, the IPPC experts warned that we have already reached the catastrophic point of no return (keeping global temperatures under 1.5 degrees and on a clear path to miss the net zero target by 2050. Green House gas emissions continued to increase. Policies and laws addressing mitigation have consistently expanded since  the Paris declaration but theses are yet to cause a dent in global carbon emissions . Global GHG emissions in 2030 implied by Nationally Determined Contributions (NDCs) announced by October 2021 make it likely that warming will exceed 1.5°C during the 21st century and make it harder to limit warming below 2°C. There are gaps between projected emissions from implemented policies and those from NDCs and finance flows fall short of the levels needed to meet climate goals across all sectors and regions, the IPCC report states.

Since the climate problem is defined as too much greenhouse gas emissions, rather than too little energy, this historically suggests that only a solution that actually limits carbon dioxide emissions will work. However, when the climate problem and decarbonisation is defined with targets this way, there is a serious problem.

Factually, Africa is energy poor. The IEA World Energy Outlook, however, shows that close to 600 million people remain without access to electricity in sub-Saharan Africa. Over 80% of Africa’s population depends on biomass as a source of fuel.  The electrification stands at around 40% and use of clean sources such as solar stands at a mere 4%. The net zero is barely 30 years from now and how Africa can turn these statistics around is quite impossible.

With the current statistics and demographics, decarborization (or net zero) is in many ways unprecedented as it means or suggests eliminating the use of a currently viable and profitable fuels and replacing this with another.

Globally, fossils are too dominant and producing countries are too reluctant to let them go without proper substitutes to replace them.  Yet dominant fuels have major characteristics that make them difficult to be easily replaced. These include; having large market share, economic dominance/ascendance, political dominance, established institutional structures to support and cultural influence on the users.  All these take time to be built and embedded into the energy system. Yet an energy transition reflects a change in the balance between fuels and a shift in their characteristics.  That clean energy system will take over the characteristics of the current fossil-based systems in the next 27 years is quite an uphill task.

The recent global events have shown that the world can reach a net zero emission in 2050 is over exaggerated and practically impossible to achieve. The simple disruption in petroleum supply chains by the Russia-Ukraine war in 2022 showed us this realty. Barely two months into the war, had developed countries such as German turn around on fossils to fire up their coal-based plants to generate energy.

Indeed, one EU leader remarked that all along Europe was wrong on coal as source of energy and that European economies could survive without fossil-based energy. German, Austria, France, and the Netherlands fired up their coal plants to save gas. Coal exports from Africa to Europe boomed and new coal investments in the US increased. The energy transition even in developed countries is happening but not without significant setbacks.

Since the 2015 Paris agreement, the 2050 net zero deadline has been a moving target.  India has said it would turn net zero only by 2070, while China has set a target of 2060. Russia and Saudi Arabia amongst major economies, have also set 2060 as their net zero targets. Some African governments such as Ghana have suggested 2060 as their deadline. The reality is that this net zero target, where the world is so clean and devoid of any carbon emissions may never be reached.

For Africa, therefore the answer to this conundrum of what direction the continent should take lies in energy aggregation and consolidation. This is where by new energy systems are layered on to existing systems and gradually scaled up as, they become technologically advanced, cheaply available and affordable,  to meet the continent’s sustainable energy needs. There has to be no rush for Africa to transit by 2050! Africa does not have to pay heavily to secure a net zero and a just transition by 2050.

 Africa’s future  is safe by developing hybrid energy systems that can at the same time sustain the fossil based systems, while clean energy systems are aggregated and consolidated on an incremental basis for the next long-term future.  What is required for now therefore is;

  1. Research and developing technologies that can reduce the toxic levels and carbon intensity in the petroleum based sources of energy so they can continue to be used in a clean future.
  1. Developing alternative products that could continue to be useful in support of the fossil industry, even with its diminished existence in the next 100 years. As earlier mentioned, while whale sperm oil stopped its usefulness as a dominant source for lighting, it continues as a key ingredient used to produce other high valued products.
  1. Developed countries appreciate that the journey will be a long one before our energy systems can significantly decarbonize. Even with the increased uptake in solarisation and other cleaner systems, biomass will continue to play a dominant portion as a source of energy to the bigger population in Africa.
  1. Our policies have to be pragmatic but less ambitious to avoid pitfalls in implementation and application, achievement of their intended objectives. Africa is not devoid of policies. It is a graveyard of policy implementation.
  1. Africa has to define its own energy transition pathway that is aligned to its practical realities and deficiencies. It is likely that fossils will continue driving Africa’s energy system past 2050.

In the climate justice space, perhaps Africa should be advocating for a Just Energy Aggregation and not a mere Just Energy Transition!

[1] Richard York: Why Petroleum did not save the whale; socus sociological research for a dynamic world , December 2017

 Disclaimer: This blog article is produced as part of our ongoing policy discussion series on climate change political economics and energy transition.  The discussions and briefs  therefrom are intended to share dissenting views and provoke intelligent debates ahead of major climate spaces such as COP28. The views contained herein may not necessarily fully represent those of the Governance and Economic Policy Centre (GEPC) but aired in support of intellectual democracy and geared towards securing a continental consensus.

Securing Tanzania’s clean energy future: How Tanzania can harness its renewable energy opportunities

With a high wind potential that covers more than 10% of its land and a solar power potential estimated to be 31,482 TWh for CSP technology and 38,804 TWh for PV technology and a global horizontal radiation of 4–7 kWh/m2/day , Tanzania is a step away from becoming a reckonable power giant in clean renewable future

By Moses Kulaba, Governance  and Economic Analysis Centre

@climate change, energy transition series

Tanzania, like other developing countries,  has perennial energy shortages and striving to find different ways of ensuring affordable and accessible energy supply to its citizens and economic development needs.

In order to secure affordable and accessible energy in the country, renewable energy is viewed as a viable alternative energy source. It is readily available,  environmentally friendly and if harvested,  produced and utilized in a modern and sustainable manner, it can help to eliminate Tanzania’s energy problems.

Tanzania’s power sector is dominated by state-owned TANESCO (Tanzania Electricity Supply Company Limited). TANESCO owns most of the country’s transmission and distribution network, and more than half of its generating capacity. The grid faces acute shortages and power outages due to excessive demand and a dilapidated infrastructure, making reliance on the current fossil and hydro based energy generation systems impossible to cope with the country’s energy demand.

Tanzania’s electricity generation comes mostly from natural gas (48%), followed by hydro (31%), petrol (18%) with solar (1%), and biofuels (1%). The traditional dependence on hydropower combined with the droughts that are affecting the country, often result in power supply shortages[2].

According to reports, Tanzania has a lot of renewable energy sources such as biomass, solar, hydropower, geothermal, biogas, wind, tidal, and waves. These sources are important for decentralized renewable energy technologies, which are ideal for the isolated nature of the settlements and are environmentally friendly. Despite their necessity, renewable energy sources are given low priority by both government and Households[1].

The World Economic Forum (WEF) reported the total sum of global investment into renewable energy has increased. This was supported by a 28% annual increase in investment from the United States (U.S), in 2019 totaling $54.6 billion[3]. Renewables cannot totally replace fossils such as oil, but increased investment shows increased potential contribution in the energy mix.  The International Energy Agency (IEA) estimates annual clean energy investments will more than triple by 2030.

With its vast resources and location, there are opportunities for Tanzania to investment in its abundant solar and wind energy potentials. Perhaps, it is argued, the country can leverage its strategic position to scale up investment to generate more and at the same time position as a major supplier and user of renewable energy sources. So far, in Tanzania, solar energy is used as a source of power by 24.7% of the households with access to electricity.

Tanzania’s Solar Energy potential

A study by Ahmed et al in 2017 suggested that Tanzania has an annual technical solar power potential in Tanzania was estimated to be 31,482 TWh for CSP technology and 38,804 TWh for PV technology. Potential solar energy resources are found in the central parts of the country[10] [1]. There are high solar energy levels ranging from 2800 to 3500 h of sunshine per year and a global horizontal radiation of 4–7 kWh/m2/day [1,70].  

According to the World Bank, Tanzania has a solar energy potential greater than that of Spain and wind energy potential greater than that of the US State of California. With such great potential for solar energy resources, Tanzania is naturally appropriate for producing solar energy as a feasible alternative source for modern energy supply and rural electrification.

The solar energy market in Tanzania has drastically grown and increased over the last few years. Currently, the potential solar energy resources in Tanzania are used in different parts such as solar thermal for heating and drying and photovoltaic for lighting, water pumps, refrigeration purposes, and telecommunication. Solar energy is used mostly in rural areas with about 64.8% compared to urban areas with only 3.4%. The regions of Lindi, Njombe, Mtwara, Katavi, and Ruvuma lead in the use of solar power electricity in Tanzania[11]. Despite the increasing market for solar energy applications, there are fewer signs that the government is expecting to include solar PV in the national electricity mix in any substantial way in the future.

Tanzania’s Onshore Wind energy potential 

Tanzania has areas of high onshore wind potential that cover more than 10% of its land[5]. This is equivalent in size to Malawi and has greater potential than the US state of California, as reported by the World Bank report. There are areas with annual average wind speeds of 5–8 m/s[6] . These exist along a coastline of about 800 km with predominant surface winds, moving from south-east to northeast.

Based on the current research works, Tanzania has a lot of wind energy resources in the areas of Great Lakes, the plains, and the highland plateau regions of the Rift Valley. Wind energy evaluation indicates that areas such as Makambako (Njombe) and Kititimo (Singida) have sufficient wind speed for grid-scale electricity generation, with average of wind speeds 8.9 m/s and 9.9 m/s at the height of 30 m, respectively[7]. Small-scale off-grid wind turbines along the coastline and in the islands also possess great potential in Tanzania.

By 2017, at least four companies had expressed interest in investing in wind energy in Tanzania to build wind plants with a capacity of more than 50 MW. These companies included Geo-Wind Tanzania Ltd in Dar es Salaam,  Wind East Africa in Singida, and Sino Tan Renewable Energy Ltd. and Wind Energy Tanzania Ltd in Makambako.

It was further reported that wind farms with capacities of 100 MW in Singida would be constructed under the corporation of the Six Telecoms Company in Singida, financed by the International Finance Corporation and Aldwych International in London, the United Kingdom. The project would cost US$286 million[8].

But generally, the uptake of investments in wind energy is still low. Compared to other renewable energy resources that attract investment, most  projects have tried with little success to produce utility scale electricity from the wind energy. Tanzania’s renewable energy sector remains dormant with potential.

Recently, the government has indicated plans to review its national energy master plan with a view of integrating its energy mix with  renewable sources. This provides an opportunity for government to be intentional and focused on scaling its renewable sources from solar and wind.

What is stopping Tanzania’s renewable energy sector 

There are efforts and greenfield wind projects such as  the Mwenga project , the first wind farm to ever be built in Tanzania was completed in 2020. According to the project directors, Camco Clean Energy, the 2.4MW project – which received a $1.2m loan from the UK Government-funded Renewable Energy Performance Platform (REPP) – was supposed to be connected to an existing grid network, providing energy security to communities across the country. However, there are gaps such as financing, infrastructure, storage, and government facilitation which potentially limit investment, scale up, use and benefiting from this potential.

  • High investment costs: The cost for initial investment is high and the returns on investment are slow. With the dominance of TANESCO as a monopoly and absence of readily available Power Purchase Agreements for independent producers, project financing for renewable energies is still difficult.
  • Misaligned government priorities; Government efforts have largely emphasized hydropower projects. Other renewable energy sources such as solar, thermal, wind, biomass, and biogas are under-prioritized so far due to different socioeconomic and political reasons
  • Institutional and regulatory barriers; These are one of the main difficulties of developing renewable energy projects in the country, stakeholders say. According to Camco managing director Geoff Sinclair  “It’s very difficult to get a bankable PPA signed, offtaker creditworthiness remains an issue, and tariffs are regularly and somewhat randomly reduced to levels that undermine commercial viability.
  • Unmatched political will : The political will and support towards renewable energy over the past ten years has been on and off. After a major push in 2013 , the momentum appears to have dwindled.  Many projects stalled and such as the 150 MW Singida Wind Power project are yet to be fully delivered. In 2013, the Vice-President of China Daliang International Group, Mr Xu Youliang, told  Tanzania’s Prime Minister, Hon Mizengo Pinda,  that this project would be ready and start generating power by 2015. To date this has not materialized. Similar projects such as the Same Wind projects are still on their drawing boards and political support has been waning. Despite the energy resources available in the country and the government’s pledge to invest in renewable energy, foreign investors feel discouraged from  scaling up investments in  Tanzania’s renewable sector.
  • Overriding dissenting views on power of renewables in Africa: Further, this lukewarm and unpredictable stance towards renewable energy such as wind and solar seems to be a general  attitude  across the African continent. African governments have been slow to take on largescale renewable projects.  Some of African political leaders, such as Uganda’s President Yoweri Museveni, have argued that renewable energy is not sustainable to meet the future global population energy demands. It cannot even meet or drive Africa’s development agenda. 
  • Unreliability and lack of technology for storage: Renewable energies such as solar and wind are largely dependent on whether and climatic factors and therefore unreliable as a source of power. The technology for storage has not advanced enough to guarantee continuous supply whenever needed 
  • Potential of land grabing and conflicts: Moreover a solar farm requires huge tracts of land, and this can or may potentially spark off a new wave of land grabbing by solar energy investors, triggering land conflicts across the continent. Africa could is a bystander in renewable energy technology. For Africa to benefit, investment in technologies and production of equipment, such as solar panels and wind turbines must be on the continent.

CSOs such as power shift Africa , Anti Coal Coalition[4] and others however argue that investment in renewable energy is economically viable, and can  create jobs and increase access to energy to the poor and rural areas where access to the national grid is difficult. Significantly, investment in renewables will help Tanzania achieve its domestic transition and unlocking the country from a fossil future.

What can be done?

  • Moving forward, therefore the mysteries surrounding renewable energy and Tanzania’s potential must be unlocked 
  • Government, along with other renewable energy stakeholders, should complement existing policies and strategies to address issues related to renewable energy development to ensure timely and sustainable utilization of the available resources.
  • There is the need to provide a sound business and investment environment to local and foreign people who can provide capital towards renewable energy technologies and development.
  • There should be more training and awareness made available to the public about how to invest and use renewable energy.

Tanzania can and must benefit from the energy transition by upscaling its potential by starting to roll out implementation. Stalled renewable projects should be implemented.

[1] Obadia Kyetuza Bishoge: The Potential Renewable Energy for Sustainable

Development in Tanzania: A Review, 2018 accessed at : https://www.mdpi.com/2571-8797/1/1/6/pdf#:~:text=Tanzania%20has%20a%20lot%20of,are%20environmental%20friendly%20%5B1%5D.

[2] https://www.trade.gov/energy-resource-guide-tanzania-renewable-energy

[3] https://www.weforum.org/agenda/2020/06/global-clean-energy-investment-research/

[4] https://www.theguardian.com/world/2022/aug/01/african-nations-set-to-make-the-case-for-big-rise-in-fossil-fuel-output#:~:text=African%20nations%20expected%20to%20make%20case%20for%20big%20rise%20in%20fossil%20fuel%20output,-Exclusive%3A%20leaders%20expected&text=Leaders%20of%20African%20countries%20are,documents%20seen%20by%20the%20Guardian.

[5] Tanzania Invest. Tanzania Has High Potential For Renewable Energy Projects, US Consulting Firm Indicates. TanzaniaInvest. 2015. Available online: https://www.tanzaniainvest.com/energy/tanzaniahas-high-potential-for-renewable-energy-re-projects (accessed on 15 April 2018).

[6] Kasasi, A.; Kainkwa, R. Assessment of wind energy potential for electricity generation in Setchet, Hanang, Tanzania. Tanz. J. Sci. 2002, 28, 1–7.

[7] Energy Charter Secretariat. Tanzanian Energy Sector under the Universal Principles of the Energy Charter. 2015. Available online: https://energycharter.org/fileadmin/DocumentsMedia/CONEXO/20150827- Tanzania_Pre-Assessment_Report.pdf (accessed on 8 May 2018)

[8] The Minister of Energy. The Speech of the Ministry of Energy and Minerals on the Estimates of the Revenue and Expenditure for Financial Year 2018/2019. 2018. Available online: https://www.nishati.go.tz/hotubaya-bajeti-ya-wizara-ya-nishati-kwa-mwaka-2018-19/ (accessed on 15 January 2018)

[9] The Economist. A World Turned Upside Down—Renewable Energy. 2017. Available online: https://www. economist.com/briefing/2017/02/25/a-world-turned-upside-down (accessed on 4 May 2018).

[10] Sarakikya, H. Renewable energy policies and practice in Tanzania: Their contribution to Tanzania economy and poverty alleviation. Int. J. Energy Power Eng. 2015, 4, 333. [CrossRef]

[11] https://www.thecitizen.co.tz/News/33pc-of-Tanzanians-have-access-to-electricity–report/1840340-3900298-9elccaz/index.html

TAXING E-COMMERCE IN A RAPID EXPANDING DIGITAL ECONOMY: Managing the delicate balance between DRM, and Employment in East Africa-How do we get right?

Taxation of e-commerce is an emerging area of challenge in tax policy and administration and yet the rapidly expanding digital economy has recorded a proliferation of technological innovations in the form of online business platforms, employing hundreds of youths and women, generating millions of revenues through innovation and e-commerce in Tanzania and East Africa generally.

Many research findings consistently suggest that a deeply integrated and competitive digital market among the EAC countries alone can boost the GDP by about $2.6 billion and create up to 4.5 million new jobs[1].  In Kenya alone, the digital economy is expected to add KSh 1.4 trillion or 9.24% of the GDP to Kenya’s economy by 2025 according to the Accenture, Africa iGDP Forecast. It is one of the fastest-growing sectors in the country with Kenya leading other African countries in terms of the digital economy’s contribution to the GDP at 7.7%, followed by Morocco and South Africa at 6.82% and 6.51% respectively[2]. The online industry contributed Ksh810 billion to Kenya’s GDP (7.7%) in 2020.

Some of the major businesses driving the online industry in Kenya are E-commerce firms such as Copia and Jumia, Fintech products like MPESA, and MShwari, HealthTech platforms like Daktari Africa, and Food-delivery startups. With an emerging army or tech talent and online trading platforms, the trend is upward in all the other East African countries.

And yet online businesses and e-commerce has been found to be a conduit for tax avoidance, evasion, and thus thwarting the government’s Domestic Resource Mobilisation (DRM) efforts.

With crunching national budgets and dwindling external aid, there is a reinvigorated push for governments to ramp up DRM efforts by expanding the tax bases through targeted new sources such as e-commerce.

Clearly, given the economic context at play, suggest that taking this trajectory as a new targeted area of taxation appears to be a delicate one that should be approached with caution.  Revenues should be collected but business and employment must be created and protected. Therefore, there is a need for a balance between the government’s imperative of maximizing DRM and promoting business and job creation for tech nerds, hundreds of digital entrepreneurs, and a bulging unemployed youth.

How can we manage this balance to be met without losing the gains achieved so far, by promoting fair taxation, DRM, and business opportunities to support innovation, business entrepreneurship, employment, and livelihoods required to meet the national development goals? What advances have been made by tax bodies, challenges so far, and concerns from digital entrepreneurs?

Our distinguished speakers at this webinar will dissect this subject with the purpose of creating a space for sensitization and public dialogue with key stakeholders such as Tax authorities and practitioners, private sector and digital entrepreneurs, Financial institutions, Civil Society Organizations, Africa’s economic diplomats, Government Officials and Agencies, development partners, and other interest groups.

They will help us understand the challenges facing this new area of taxation, including tax evasion, avoidance by transboundary online multinationals, and how the governments have integrated fiscal regimes in this year’s National budgets but significantly how do we get it right moving forward?

Our distinguished speakers will be:

1. Ms. Edna Gitachu,  Associate Director and Tax Policy Lead, PWC, Kenya: Budgets of Tough Times; An expert overview of digital taxation in Kenya’s National Budget 2023/24 and practical recommendations of fiscal measures that East African governments could take.

 

2. Ms. Leah Karunde, Tax Expert and Consultant, Tanzania:  Taxing the Invisible Red Hering: Practical Experiences in tackling online businesses and works of art such as television content, online content, marketing, sports betting, transportation, music, etc.

 

 

3. Mr. Francis Kairu, Policy Advisor, Tax Justice Network Africa; The Buffalo in the tent:  Tackling Tax avoidance, evasion, and illicit financial flows by Online Multinationals through e-commerce

 

 

4. Moses Kulaba, Convenor

Date and Time:  Wednesday, July 19, 2023 12:00 PM Nairobi , 11 AM CET and 9AM West Africa Time

Meeting ID: 99027631281   Personal Meeting ID: 321 806 9582

Pass Code:

Registration Link: https://zoom.us/j/99027631281

 

[1] https://www.trademarkafrica.com/news/east-africas-need-for-a-unified-digital-economy/

[2] https://kenyanwallstreet.com/kenya-to-earn-ksh-1-4-trillion-from-digital-economy-by-2025/

 

Financing of the Green Economy and prospects for Africa-Can Green Banks offer a viable alternative?

Achieving Green Economies and a just energy transition for Africa cannot be achieved without financing. It is said there is sufficient liquidity and capital to finance climate change and green economic revolution in Africa. Unfortunately, much is not reaching the African continent. In East Africa, access to financing of clean renewable energy such as solar is limited and expensive for many rural communities and poor households. There is potential for solar energy but the existing government policy, legal and financing have gaps limiting cheap financing and solar uptake for rural communities.

The US experience show successful green and clean energy financing models through Green Banks which can be adopted and replicated in East Africa.  Large and small financial institutions on the African continent have leveraged instruments and facilities towards financing the green economy, but these are largely unknown. Governments such as Tanzania are considering carbon trading mechanisms while others look towards imposing carbon taxes to raise the necessary financing for the next green economy. What are the viable options?

The problem

African countries still face significant challenges in financing their climate transition. While investment needs resulting from NDCs are estimated at $2.8 trillion by 2030, funds invested on the continent still represent a limited share of global green finance flows, and the share covered by the private sector remains limited[1] Governments, local financial institutions and communities find it difficult to mobilise or access financing. Large private sector players are reluctant to invest due to the high cost of capital, small scale of projects and inhibiting policy terrains that make it difficult to attract capital and financing into the green economies. Much of the available financing is not yet reaching the communities and thus scantly creating lasting change.

Viable options?

Green banks have been so far lauded as one of the most innovative policy developments that can be used to support and deployment of clean energy[2]. Green banks are financial institutions established primarily to use innovative financing to accelerate the transition to clean energy and fight climate change[3]. They mix commercial, public, and philanthropic approach to capital making it cheaper to finance new clean energy projects that otherwise couldn’t be built. They are a good vehicle for leveraging finance and directing investment to areas which are needed to scale up the green economy.  They are good tools for driving or achieving public policy with a social enterprise angle[4].

An assessment by the African Development Bank and the Climate Investment Funds revealed the potential of Green Banks in six African countries, namely Benin, Ghana, Mozambique, Tunisia, Uganda, and Zambia.

“The assessment revealed that green banks have significant potential for attracting new sources of catalytic funds when supporting low-carbon, climate-resilient development through blending capital and mobilising local private investment for green investments in Africa,” the AfDB reported.

Multilateral development banks and international financial institutions had a crucial role in enabling local financial institutions to develop a green pipeline of projects and ease their access to resources. It is for this reason that the AfDB has established the Africa Green Bank Initiative (ABI).

The AfDB’s Green Bank Initiative (AGBI) is described as a powerful tool for reducing financing costs and mobilising private sector investments in climate action in Africa. The African Green Bank Initiative will be backed up next year by a $1.5 billion trust fund due to close in 2025. The initiative will bolster the capacity of local financial institutions to build a robust pipeline of bankable green projects, while de-risking investments and entrenching long-term investor confidence toward climate-resilient and low-carbon projects in Africa.  “It will do so through investing in sectors such as energy efficiency and renewable energy, climate-smart agriculture, resilient infrastructure, and nature-based solutions, AfDB states.

According to Akinwumi Adesina, the AfDB President, the establishment of a green finance ecosystem could generate $3 trillion in climate finance opportunities on the continent, while over the period 2020-2030, the financing gap to address climate change is estimated at between $100 billion and $130 billion per year.

Moreover, there are other financing options that are or can be pursued. These include green bonds, green loans, and carbon trading mechanisms.

Coincidentally, all these financing mechanisms have upsides and downsides, which  upon evaluation climate financing justice advocates such as  the CSO network, Pan African Climate Justice Association (PACJA) and government officials like Ms Isatou  Camara of the Gambia are now calling out financial institutions  for a total re-engineering and redesign  of climate financing to ensure that more is structured in the form of grants than loans and that at least 70% of this funding reaches the communities. The loans are expensive, Africa is over indebted and yet investment in renewable energy is an expensive affair for African governments to pursue alone[5]

At national level access to green finance should be relatively cheap, driven by a combination of less profit maximisation goals and more social enterprise imperatives and back by enabling legislative and regulatory framework.

Purpose of the webinar

This webinar is the second in a series of the different webinars that GEPC plans to conduct this year on the different elements on economic governance and climate economics, with anticipation that we can contribute towards expanding knowledge, public discussion, and engagement in these spaces.

But more significantly creating opportunities for business economic opportunity in country, including space for youth and women led young businesses to benefit from the emerging context.

Our distinguished speakers will dissect this subject and help us understand Financing of Green Economy in the context of climate change and transition to clean energy: Prospects for Green banks and other financing mechanisms in East Africa with a view of

Objectives

  1. Increase awareness and knowledge about the current Climate Economics and Financing the Green Economy in Africa
  2. Provide an opportunity for stakeholders to interrogate financing structures, national policy terrains, initiative potential opportunities and inhibitors to success.
  3. Influence key stakeholders such finance institutions and potentially state parties to hasten reforms for success.
  4. Generate a potential opportunity for non-state actors, communities, and small entrepreneurs to benefit from existing financing plans.

Our distinguished speakers will be:

1. Ms Isatou F. Camara, Ministry of Finance and Economic Affairs, The Gambia, Least Developed Countries Group Climate Finance coordinator:  Restructuring of the global financing architecture for green economies-what financial institutions must do.

2. Ms Audrey Cynthia Yamadjako, Africa Green Banks Cordinator, African Development Bank (AfDB)

3.Ms Grace Mdemu, Capital Markets FSD Africa, former Business Development Officer at Africa Guarantee Fund (AGF): Leveraging of capital and opportunities to finance Green Economies in East Africa

4.    Dr Elifuraha Laltaika, Senior Lecturer of Natural Resources Law, Faculty of Law, Tumaini University Makumira, Tanzania:   Leveraging financing to poor and indigenous communities in Tanzania

5. Ms Cynthia Opakas,  Senior Legal Counsel, Green Max Capital , Kenya: Practical experiences on financing the green economy in Kenya and global best practices

6. Moses Kulaba, Convenor

Date and Time:  Wednesday, June 14, 2023 12:00 PM Nairobi , 11 AM CET and 9AM ACCRA Time

Pass Code:059752

Registration Link:  https://zoom.us/j/94532314396 

[1] https://www.afdb.org/en/news-and-events/african-development-bank-launches-model-deploying-green-financing-across-continent-56903

[2] Richard Kauffman, Yale School of Management, Financing Clean Energy Technology

[3] http://coalitionforgreencapital.com/wp-content/uploads/2019/07/GreenBanksintheUS-2018AnnualIndustryReport.pdf

[4]https://gepc.or.tz/make-it-happen-how-green-banks-acceleration-can-light-up-rural-hamlets-in-uganda/

[5] Her Excellence Dr Samia Suluhu Hassan, President of United Republic of Tanzania during her address to African leaders at a side event on the Southern Africa Power Pool (SAPP) organised during the CoP27 in Egypt