Tanzania’s Mining Investment Climate: Reforms that government should take to attract and retain new mining investors

According to the Ministry of Minerals, government stands ready to facilitate investor meetings and explore potential business ventures in Tanzania. However, investors operating under the current mining regime in Tanzania still face challenges which require a thorough regime review and fix, for the challenges to go.

Author:  Governance and Economic Policy Centre

Tanzania is endowed with a variety of mineral resources and has been successful in attracting large mining investments. However, over the past few years, this investment curve stagnated and has zigzaged out, as potential new investors stayed away in fear of a potentially unpredictable regulatory mining regime.  In order to attract and retain new large-scale projects, investors suggest, that pertinent reforms must be made.

This brief traces Tanzania’s mining history and from an investor perspective, shows how the country started losing the momentum and its share as a leading mining destination. It proposes some actions and reforms that could be made to reclaim its glory while at the same time achieving a win-win regime for sustainable mining and development.

Tanzania’s mining in a historical context

Mining and minerals trading has a long history in Tanzania, dating back to 18th century when Arab traders plied the Tanzanian coastal towns bringing spices from the Arabian gulf in exchange for gold, copper, iron and other minerals.  Records show that the German colonialists discovered gold in Geita and Sekenke (Singida) where the first gold mine was established in 1909.

In 1940 a Canadian Geologist Dr. John Williamson discovered the Mwadui Kimberlite pipe and established a diamond mine there.  After his death in 1958 his heirs sold the mine to De Beers (50%) and the British colonial government (50%).

In 1971 the government of Tanzania nationalised all mines.  The State Mining Corporation (STAMICO) took ownership of the Diamond mine and run it between 1974 to 1993 when years of ill maintenance took their toll to cause an urgent need of recapitalisation and equipment overhaul.  This need came at a time when the country was going through a tough economic situation that it was not possible to accommodate the need.  A decision was made to invite De Beers to the rescue. They agreed to recapitalise the company and in return acquired a 75% stake in the mine in 1994.  In 2009 DE Beers sold their 75% stake to Petra Diamonds.

Following economic troubles of the seventies, raising fuel prices, geopolitical tensions between ‘east and west’, the 1978/79 war between Tanzania and Uganda, low commodity prices for the country’s backbone agriculture produce (cotton, coffee & sisal) exports, the Tanzanian economy continued to deteriorate to the extent that the country was left with no other option but to embrace free market economic policies advocated by the Bretton Woods Institutions. 

With advice and guidance from the World Bank and IMF, Tanzania liberalised its mining sector and invited foreign investors.  This was during the 3rd phase government of H.E. Benjamin William Mkapa (RIP). The shift to free market economy and liberalised mining industry required new policies, laws and regulations.

New Mining Reforms and knock off effects

A Mineral Policy was formulated in 1997.  The policy gave way for private sector to take the lead in mineral exploration, development, mining, beneficiation and marketing.  Instead of being an active participant, the government would become the facilitator, the regulator and the administrator. This policy was complimented by the Mining Act 1998.

The Mineral Policy 1997 and accompanying Mining Act 1998 together with personal efforts by the late President Benjamin William Mkapa resulted in foreign mining investors in their multitudes flocking the country.  In a span of about eleven years (1998 – 2009) six large scale gold mines were opened.  These are:

  • Golden Pride Mine in 1998, owned by Resolute Mining Limited of Australia
  • Geita Gold Mine in 2000, owned by Anglogold Ashanti of South Africa
  • Bulyanhulu Gold Mine in 2001, owned by Barrick Gold of Canada
  • North Mara Gold Mine in 2002, owned by Sutton Resources of Canada and later the mine was acquired by Barrick Gold of Canada
  • Tulawaka Gold Mine in 2005, owned by Pangea Minerals – a wholly owned subsidiary of Barrick Gold of Canada
  • Buzwagi Gold Mine in 2009, owned by Barrick Gold

Despite the many benefits that the new mines brought, including improved balance of trade realised by increased gold exports, increased government revenue collection through import & employment taxes, the multiplier effect that was created by new business opportunities to local suppliers and contractors, there was still a public outcry that the country was not getting enough.

It deemed necessary to form various committees and task them with reviewing the country’s policy, law, regulations and public views on the mining industry and compare the findings to the practice in other African countries.  The aim was to improve the playing field to achieve a win-win situation.  Four committees were formed for the cause at different times between 2002 and 2009:

  • General (Rtd) Robert Mboma Committee in 2002
  • Kipokola Committee in 2004
  • Lau Masha Committee in 2008
  • Judge Mark Bomani (RIP) Committee in 2009

Observations and opinions collected from the various committees led to the formation of a new Mineral Policy in 2009 and enactment of the (new) Mining Act 2010.

Vision of the Mineral Policy 2009 was to attain an effective mineral sector that contributes significantly to the acceleration of socio-economic development of the country, through sustainable development and utilization of mineral resources by the year 2025.  This included attaining a GDP contribution of 10%.  Note that the GDP contribution of the mining sector was 2.7% in 2010 (BOT Annual Report June 2011). Focus of the Mineral Policy 2009 was to integrate mining with other sectors of the economy.

It’s interesting to note that:

  • After establishment of the Mining Act 2010 and its accompanying regulations, only one ‘medium scale’ gold mine was constructed – the New Luika Mine in 2012.
  • Thereafter, there have been a limited number of medium scale mines (smaller in size and production capacity than New Luika) which have been constructed, but not a single large scale mine has been built ever since.

Following the change of government in 2015, the Mining Act 2010 was further overhauled in 2017 and led to the current version of the act – Mining Act CAP 123 R.E. 2019.  This overhaul was complemented by two new acts:

  • The Natural Wealth and Resources (Permanent Sovereignty) Act, 2017
  • The Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act, 2017

The Mining Act CAP 123 R.E. 2019 introduced new clauses which imposed more control of natural resources by the government.  It banned export of mineral concentrates and put more emphasis on local refining of extracted minerals.  It revoked retention licenses and introduced new clauses to govern local content and corporate social responsibility.  The intent was to see more participation of Tanzanians in management of the foreign owned mining companies and in the value chain of the mined minerals.  Instead of exporting raw minerals the companies were required to beneficiate locally before export. The Government was also enabled by the law to acquire at least 15% un-dilutable free carried interest in Mining Licenses and Special Mining Licenses.

Key takes from the new law on ‘permanent sovereignty’ were introduction of clauses which mandated for:

  • Arbitration of commercial disputes in local courts and using Tanzanian law
  • Review by Parliament of agreements entered on natural resources
  • Local beneficiation of mined minerals
  • Retention of earnings in local banks

The ‘review and renegotiation of unconscionable terms’ act gave mandate for the Parliament to review any agreement on natural resources previously entered by the government, to be reviewed and renegotiated if the terms entered appeared to be unconscionable.

In a 2017 commentary, titled: Tanzania Overhauls Mining Laws, Fines Investor US$190 Billion: Is Your Investment Protected?  the JonesDay, a leading commercial law firm wrote; ‘The new laws heighten the government’s role and power in investment contracts, increase the costs of foreign investment, and substantially reduce investment protections, including international arbitration. Investors should take immediate action to mitigate the risks associated with the Tanzanian government’s actions pertaining to the mining industry[1]. Despite current government reassurances, to date these fears have continued to revibrate among risk averse investors, who remain uncertain of Tanzania’s future investment climate. For these laws have never been repealed.

Factors driving mining investment decisions

To put matters in context, one crucial criterion that attracts mining investors to a country is rich geology that has a scientific potential to host high grade orebodies. Tanzania is among the African countries blessed with such geology.  But to attract mining investors rich geology cannot stand on its own.  Rich geology must be complemented by:

  1. A conducive business environment
  2. A stable fiscal/mining regime
  3. Security of tenure
  4. Political stability and peace in the country
  5. Skilled artisans
  6. Good infrastructure – roads, rails, power, etc.

Over the years until in the recent past the country managed to do well in the list above on items 4 to 6.  Items 1 to 3, however, have been a challenge.

 Wins and missed opportunity

When the first large scale mine was established in 1998 at Lusu ward, Nzega district, Tanzania had a challenging road, rail and power infrastructure.  Some important mining skills were lacking.  But the country was politically stable, mining companies owning Special Mining Licenses had their fiscal issues stabilised by the Mining Development Agreements (MDA) signed with the government, there was security of tenure and a good business environment.  Over time, good progress continued to be made in some areas, but there was deterioration of circumstances in other areas as noted by  investors. 

Frequent and unilateral changes to laws and regulations led to breach of mine development agreements (MDAs).  Some concessions given to investors through the signed Mine Development Agreements were not honoured by the Tanzania Revenue Authority because they were not gazetted, and despite requests from concerned investors the Ministry of Finance avoided gazetting the MDA’s.

Significant improvement and upgrade made to road and power infrastructure; and skills development was defeated by unnecessary red tape brought about by introduction of a multiplicity of regulators who appeared to be more focused in raising revenue through hefty fines rather than providing oversite and regulating the sector.

Security of tenure was put at risk by uncontrolled gold rushes and haphazard trespassing by unlicensed artisanal miners. Investors who had invested millions of US Dollars in green field exploration witnessed invasion of their tenements by unlicensed artisanal miners with no serious intervention by authorities to rescue the situation, allowing the invasions to be politically concluded at the demise of the investor.

In summary, the current mining industry in Tanzania has been a mixed grill of successes and failures. Despite the many ups and downs over the years, several ‘wins’ have been witnessed by the sector following revision of the Mining Act CAP 123 R.E. 2019 and enactment of the laws on sovereignty in natural resources and renegotiation of unconscionable terms on agreements entered by the government on natural resources:

  • Renegotiation of the Mining Development Agreement entered between the Government of Tanzania and Barrick Gold Corporation which led to Acquisition of a 15% un-dilutable free carried stake by the Government in Barrick Gold mining projects in Tanzania (Bulyanhulu & North Mara Gold Mines) and signing of a Framework Agreement between the Government and the company.
  • Acquisition of a 15% un-dilutable free carried stake by the Government of Tanzania in the Kabanga Nickel project (Tembo Nickel Corporation).
  • Acquisition by the Tanzanian Government of a 15% un-dilutable free carried stake in the Ecograph Epanko graphite project
  • Acquisition by the Tanzanian government of a 15% un-dilutable free carried stake in the Peak Resources Ngualla REE project (through Mamba Minerals)
  • Acquisition of a 15% un-dilutable free carried stake by the Government in the Strandline Resources Heavy Minerals Sands project through Nyati Resources
  • Acquisition by the government of a 15% un-dilutable free carried stake in the Evolution Energy Chilalo Graphite project through Kudu Graphite Limited
  • Acquisition of a 20% un-dilutable free carried government stake in the Perseus Mining Nyanzaga Gold Project through Sota Mining Ltd.
  • Increased royalty collections following increase of the royalty on gold to 6% from the previous 4%
  • Increased gold revenue collections through the introduction of 1% inspection fee on gold exports
  • Construction of 3 gold refineries in Mwanza, Geita and Dodoma which have not only facilitated purchase of refined gold by the Bank of Tanzania but have also created employment opportunities to Tanzanians.
  • Enforcement of local content regulations which have in turn facilitated the participation of Tanzanians in the mines supply chain.
  • Enforcement of new local content regulations have made it possible for several Tanzanians to take over senior management positions in foreign mining companies investing in Tanzania
  • Enforcement of new CSR regulations have enabled CSR projects to be managed in a fair and transparent manner, ensuring value for money of the projects.
  • Introduction of the online Mining Cadastre system has revolutionised the licensing process by modernising it. The ‘first come first served’ approach in license application is working fine and fairly.  So long as they have all the required supporting documents in soft / electronic form, applicants are now able to lodge license applications from wherever they are in the world. They just need to be connected to the internet.
  • Significant improvements in power generation and transmission capacity have enabled connection of major mines to the national electricity grid. It was heartwarming to witness connection of the Geita Gold Mine (Anglogold Ashanti) to the national power grid.  This event shall not only save the company millions of US Dollars in energy cost, but it will also increase Tanesco’s revenue.  The Geita mine used to consume about 8 million litres of diesel every month to generate electricity using a rented thermal plant.

But, have the country now achieved a win-win situation? How is this goal going to be realised?

In the business world the investors would always want to maximise their profits and governments would always want to maximise their tax and fees collections to support socioeconomic development.  An attractive and well researched mining regime that involved stakeholder participation in its making is the only one that will manage to at least strike a delicate balance between the profits anticipated by the investors and the taxes and fees anticipated by the Government.

Obstacles that Tanzania Mining investors face

Courtesy Photo: Tanzania Minerals Minister, Anthony Mavunde speaks to stakeholders in Dar es Salaam

According to the Ministry of Minerals, government stands ready to facilitate investor meetings and explore potential business ventures in Tanzania. This unwavering commitment to attracting foreign investment underscores the nation’s dedication to unlocking the full potential of its mining sector. Tanzania Mining industry is highly important since it accounts for a significant share of the country’s export revenues. The Government plans to have this sector contribute 10% of GDP by 2025.

However, investors operating under the current mining regime in Tanzania still face challenges which require a thorough regime review and fix, for the challenges to go.

  • Several advanced mining projects including the ones in Graphite, REE, Heavy Mineral Sands and Gold have continued to struggle in raising project finance due to some clauses in different laws governing the mining sector in relation to the ownership of won minerals as well as banking of mineral sales proceeds
  • Extended negotiations on the making of framework agreements have been one area that frustrates many investors whose projects have reached that stage in their development
  • If left the way they are, some local content procurement tendering procedures have the potential to cause costly delays during the construction phase of the advanced projects
  • If left as currently reads, some wording on Section 56 of the Income Tax Act CAP 332 R.E. 2006 will end up ‘taxing’ capital of exploration companies when shareholding changes. Triggering imposition of Section 56 will cause a 30% capital gain tax on a junior exploration company when part of whose shares are acquired by another company for the intent of capitalising the junior company.  It should be noted here that exploration companies are not operating mines and instead of making money they normally burn money trying to find a mineable mineral deposit.  Trying to tax a non-trading company is weird and unheard in the mining industry.  The only way we can generate new mines to replace closed ones is by promoting exploration – not discouraging, investors say
  • The Income Tax Act CAP 332 R.E. 2006 disallows deduction of Royalty costs when calculating taxable income of a mining entity. This is a concern because no company is allowed to export minerals unless it has paid Royalty, meaning that royalty is part and parcel of the costs incurred to generate revenue of the company and should therefore be an allowable deduction

The above listed are only a few issues of concern to mining investors and something that the Government needs to have another look about or even conduct a study to see their quantitative impact in discouraging mining investment in Tanzania and what will be the impact (pro or cons) if some of the clauses will be amended to reflect investor’s proposals.

Proposed remedial actions and reforms that government should take

 There is a raft of measures that government can take. These include;

  1. Asses the current investment climate with a view to determine whether the 2017 mining reforms achieved any significant dividend to the mining sector
  2. Re-examine the current laws, particularly those passed in 2016 and 2017 to see if there are any remaining clauses that may be of concern to the mining investors. Some changes were made , however government should evaluate and see if there are any areas that need further review, without losing the core purpose of securing maximum value for Tanzania.
  3. Re-evaluate Tanzania’s mineral geology and mining potential in the current context and future mining investments trends, with a view of keeping aligned and on course to attract and retain new large-scale investors
  4. The final approach would be to form yet another task force made of representatives who are experts in the field of mining business and mining taxation, from the government and the mining private sector, to mutually consult and come up with a proposal that would attain a level play field balancing the profit anticipation of the investors and the tax and fees anticipation of the Government.

Minerals will always be a finite resource. Value can only be derived from them when they are extracted from underground and used to the benefit of the country.

The opportunity is still there to exploit minerals in Tanzania for the fair benefit of both the Government of Tanzania (on behalf of its people) and the investors. With tweaks to some of the current mining laws, bolstered with stability and government confidence building measures, the Tanzania can recapture and retain its glory as the prime mining investment destination in Africa.

While contemplating on the next move, the government should also make a thorough assessment of mark-timing mining projects – public (like the Liganga iron ore and Mchuchuma coal) and private ones (like the Kabanga Nickel, Mkuju River Uranium and Nyanzaga Gold), to see how such projects can be fast tracked and brought to production stage. With the speed at which technology is developing in the world, Tanzania faces the big risk of having some of its mineral deposit being stranded.  The coal deposits at Mchuchuma are faced with the highest risk with the current push for the world to go green and stop the use of fossil fuels.

With determination and the right people and policies at the forefront, the government can profitably and timely exploit the country’s minerals for the social economic development of its people.

[1] https://www.jonesday.com/en/insights/2017/08/tanzania-overhauls-mining-laws-fines-investor-us190-billion-is-your-investment-protected

Re-Positioning women and gender concerns in Critical Green Transition Minerals: Should women be treated differently?

With the increasing focus on climate change and green transition minerals, multiple questions are asked whether women really matter and deserve to be treated differently.

 

Authors: Gloria Shechambo, Moses Kulaba and Judith Karangi, Governance and Economic Policy Centre

*We acknowledge valuable inputs from Ms Rachel Chagonja,  CEO National Council of NGOs, Tanzania and  Natural Resource Consultant

  • Featured photo: Courtesy of IGF:https://www.igfmining.org/four-ways-empower-women-artisanal-small-scale-mining/

The mining sector has mostly been male dominated and has had a differential impact on how women have contributed and benefitted from the sector. Women in mining face multiple challenges including ownership to mining licenses, gender-based discrimination and earn less value from mining.   Moreover, women have been traditionally the artisanal miners and dealers of what were considered less value minerals such as copper, gemstones and pearls. The global shift of interest towards cleaner energy has put a different demand on critical or transitional minerals such as tin, tungsten, has generated a new wave and venture by the rich into new territories, previously held by women and potentially exacerbating the problems that they already faced. (HakiRasilimali, 2021). There is already a rush by mining companies to take over land and acquire new licenses over land previously utilised by artisanal women.  This shift could potentially lead to further inequalities and jeopardies the livelihoods of women in the sector (Pact World,2023).

This subject is essential at this point in time as it encourages governments to re-look into the state of women in critical minerals and how the new global shifts in the mining sector provide a different trajectory to small scale artisanal women miners in particular. Moreover, it is important because mining and transaction of critical/ transition minerals will be the ultimate development agenda of the next 30 years and is bound to affect Tanzania’s mineral governance landscape for the next foreseeable future (Kulaba,2022). Yet lopsided development without women, has always proven to be stagnant and unjust.

As Tanzania navigates the complexities of the energy transition, prioritizing gender inclusiveness in the mining sector will not only benefit women but also contribute to sustainable economic growth and development (BMZ, 2023).

 What are Transitional Minerals

 Critical, Green or Transitional Minerals are minerals that are considered vital in the support of the technology and industrial development required to support the global transition to clean energy. These minerals include but not limited to graphite, lithium, cobalt, copper, tungsten, tantalum etc. By virtue of their properties, these are slightly distinct from other conventional minerals such as gold and diamonds. According to global mining and energy reports the demand for  critical green transition minerals will surge by many folds in the next decade as the global demand and countries race up towards reaching the Paris Agreement targets of Net Zero by 2050.  Already Transition mineral rich countries such as the DRC, Zambia and Tanzania are experiencing a boom in global demand for mining licenses and opportunities for new investment.  While this surge represents an opportunity for mineral rich countries, there is a likely risk that the benefits from this critical/ transition minerals booms could by pass women artisanal miners.

The intersection between Transitional Minerals and negative Gender biases

The mining sector has long been awash with negative gender biases, cultural norms, regulatory, systemic, structural and physical barriers towards women. Mining is considered a man’s task, hard and hazardous for women. Women by their physiological nature are not considered fit to enter tinny deep underground mining pits to extract minerals. In many African mining societies, it is culturally believed that minerals will disappear if women appear on the mining sites or enter the mining pits. Some studies (Kondo 2023) have shown that women have been forbidden to enter mines, that they themselves own for ‘safety’ concerns by local officials.

While some women groups have gone on to challenge these norms and participate in mining, their degree of participation may nevertheless be limited. Norms around domestic roles in the home, for instance, mean that while men can focus solely on mining, women must first complete chores in the home and agricultural activities before participating in mining activities, which limits their earning capacity and career progression. Women also tend to be less mobile, restricted to selling their minerals within mining areas where prices are lower, unlike men who sell their minerals beyond the mining area (Buss et al., 2017).

Moreover, the current legal and policy framework governing the extractive sector has not fully untangled these barriers and does not guarantee effective participation of women in the mining sector (Majamba ,2020). As a result, women have consistently played the less visible roles and are found towards the tail end of the extractives value chain occupying roles such as those of administrative support staff, informal laborers for food supply, sexual entertainment, cleaning services and those that are closest to extracting are artisanal miners.

Women constitute about 40-50% of Artisanal miners in Sub-Sahara Africa (Pact World, 2023); and dominantly involved in extracting minerals that were previously considered ‘less value minerals’ such as salt gemstones, pearls, iron, cobalt, copper, tin, tungsten and tantalum.

In brief, despite their numbers, women neither control ownership nor value of the mining sector. Without addressing these challenges, the emerging boom in Transition Minerals could reinforce the already existing parochial and restrictive barriers that hinder women in the mining sector, keeping women in abeyance from enjoying the economic benefits that come with transition minerals and mining generally for yet the next decades.

Despite their numbers and potential economic multiplier effects, women only own around 1% of all mining licenses and 6% of artisanal mining licenses in Tanzania. This must be a cause for alarm

Do existent shifts within the mining sector bring a different trajectory to women and artisanal miners?

The global agenda and discussions to mitigate negative effects of Climate Change and keeping global warming under 1.5 degree has brought a major shift towards energy transition, changed the mining landscape and upscaled the role of critical/green or transition minerals in Mining and development global policy discussions.

The shift provides both opportunities and risks not only to specific transition mineral rich countries but to women artisanal miners in particular (Policy Forum, 2022). Informed by the Paris Agreement Cop 21 adopted in 2015, the shift has significantly changed the global demand tending towards cleaner energy where critical minerals are needed as the raw materials. Critical minerals which are also called green minerals contribute to reducing unclean emissions for renewable technologies and are very essential for functioning of modern economies, technologies and industries including electronics, renewable energy, automobiles, aerospace and defense (BMZ,2023).

Moreover, the shift to critical minerals signifies a major change in global demand in minerals by super powers, rushing to secure critical supply chains and quantities needed to drive their clean energy industrial development and to secure their energy and strategic security needs.

For example, the demand for graphite and lithium has surged and the value for copper will increase for the next years to come. While this may be an opportunity, there is a risk that the developed countries are potentially bound to benefit more than supplier countries such as Tanzania.

According to the Geological Survey of Tanzania and Mineral scoping reports (NRGI 2022) , Tanzania has  close to 24 documented Critical Minerals  occurrences and has witnessed a boom in new mining licenses. Over 50% of new mining licences issued between 2015 and 2020 targeted critical minerals. Tanzania has recorded new investments in Nickel and Graphite and exploration for large scale mining of Tungstein and Tantalum are underway. The government has placed attracting new investment in the critical minerals sector at the centre of its strategic investment drive for the next five years. A new or revised mining policy could be coming soon.

Figure 1: Tanzania Critical Minerals Exploration boom 2005-2020 (%TL = percentage of the total number of exploration licenses issued per annum) (Source: Tanzania Mining Commission and NRGI-Tanzania Scoping Study Report 2022)

With the challenges already highlighted above, the new shift will not necessarily bring new unique challenges to artisanal small-scale miners and women in particular, however, on the more optimistic side, with increase in Foreign Direct Investment (FDI) can result into better labor market outcomes in the mining sector, infrastructural investment which will enable women and other ASMs to gain better access to market opportunities.

However, pertinent policy questions remain and solutions must be provided. For example, what specific changes in labor dimensions (e.g wages, decency in employment) are more favorable for women? What specific infrastructural needs are more specific and useful to women? And what do market opportunities look like exactly to women? This needs further dissection so as to cater them accordingly. With formalization of ASMs already underway, there might be a greater pressure by investors to ensure formalized ASMs also have access to legal protection against various forms of violations and more opportunities for skills development that is relevant to the sector. What specific skills distinct from male artisanal miners are needed for women? Being able to answer these questions intentionally would enable a more gendered impact to the envisaged developments without assumptions that positive effects would automatically trickle down to women.

With rising attention to responsible sourcing of critical minerals, there may be more attention to ensuring gender and social inclusion in the sector with standards more heightened. Economic empowerment is another potential area through which gender mainstreaming initiatives potential to the sector could be adopted. This may take a form of setting up women’s cooperatives, offering grants and expanding access to financial services to support women’s entrepreneurship in mining related engagements such as processing equipment(s).

A potential area for gender mainstreaming in mining is implementing mechanisms to support women in caring for their children after returning from maternity leave while working full-time in mining areas. For example, a study in Australia found that the proportion of women in the mining workforce was higher among those under 30 but declined significantly with age. This drop was partly attributed to the lack of a supportive environment, such as inadequate onsite childcare and family support systems (Weldegiorgis, 2022).

While Tanzania will have to balance between this development imperative and Climate Change obligations further risks on environmental, and local populations still remain detrimental. The intersection of women mining and energy transition needs a bigger attention and warrants to be assessed to ascertain specific economic opportunities, challenges and what the overall shift means to artisanal women.

Gaps and risks for missed opportunity

With such spurring potentials, come possible risks too. Most of ASMs and women who have been engaged in mining were operating without formal licenses on lands. Expansion of investment to critical minerals means further displacement by largescale companies where licenses might be granted to larger better resourced companies. This might present a larger land competition and worsen the economic situation of ASMs and poor women in the sector.

Technological divide between smaller and larger mining companies might further exacerbate the marginalization of small-scale miners and women as mining of critical minerals requires higher capital investment and advanced technology.

Environmental and health risks arising from large scale mining operations may cause further impacts on communities leaving women and poor artisanal miners prone to health risks due to their vulnerability and higher dependency on natural resources for livelihoods.

Last but not least, if larger inclusion polices are not carefully inculcated, gender inequalities in the mining sector may be furthered resulting in lesser opportunities for women to be in the formal mining and control of the mining sector and the value it provides.

Yet investment and increase of women in the critical minerals sector value chain has significant multiplier effects to the local economy. According the income expenditure studies, given their caregiving roles and geographical immobility limitations women have 10 times more chances of spending their income locally compared to men. In other words, incomes earned by women will create 10 times more economic benefits to the local economy compared to men.

A study in Zambia of some local businesses (groceries, clothing shops and bars) service in Mapatizya ASM sites indicated that on average, over 50 % of their customers were ASM workers and over 50 % of revenues also derived from ASM operators. The estimated percentage of female customers was 10–80 % with an average estimate of 48 % female customers. Local business owners felt that ASM increases cash flow into the local economy through purchase of largely consumer goods such as food, clothing, soap, kerosene and other essential household items. Studies in Tanzania’s mining areas has also confirmed similar patterns. Women also support other livelihood activities, e.g. farming and establishment of small micro-entrepreneurships and village saving and lending schemes.

With a total around 41,000 women constituting about 25-27% of the informal mining and artisanal sector in Tanzania, increasing this number can create up to 10 times multiplier effect on local household incomes, adding economic value and reducing poverty by significant folds.

Policy and Legal governance aspects

The legal and policy framework should provide the framework through which the government creates an enabling environment to enable a functional minerals’ sector along with ensuring women and artisanal miners’ increased involvement in the sector.  Unfortunately, several literatures highlight the existing gaps in the legal and policy framework that hinder the effective involvement of women.

The legal framework governing the Mining Sector in Tanzania only responds partly to the challenges/barriers that women are facing. Despite the affirmative measures to recognize women in the mining sector through facilitating licensing for artisanal and small-scale miners (women included), the legal framework insufficiently supports the effective participation of women in the mining value chain especially in the most challenging areas namely capital skills and marketing (HakiRasirimali,2021).

The Mining Act of 2010 (amended in 2017) as the primary legislation governing Tanzania’s mining sector also manifests some gaps. Some provisions of the Mining Act was relatively more progressive in terms of ensuring gender parity in mining commission is at least 1/3 of the members must be women. The subsequent amendment in 2017 was rather regressive, where it provided that one out of two knowledgeable members should be a woman (Mjamba,2020). The Act does however not provide gender mainstreaming as a strategic tool of advancing women ownership and control of the mining sector.

The Extractive Industries Transparency Act (TEITA) requires for some disclosures on gender, however the extent to which women and ASM matters must discharged is not comprehensive. Moreover, the TEITA law was enacted with a mindset focus on conventional large scale mined minerals such as gold, tanzanite and diamonds. Critical Green Transition Minerals would be a new purview desiring a second look.

The Mining Act 2010 also includes local content requirements to Tanzanian nationals in employment and procurement however these provisions could be strengthened further by emphasizing the minimum threshold for the inclusion of women in jobs, entrepreneurship and service provision.

The Natural Wealth and Resources (Permanent Sovereignty) Act of 2017; the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act of 2017; and, the Tanzania Extractive Industries (Transparency and Accountability) Act of 2015 are also not actively seeking to promote gender inclusiveness (HakiRasilimali,2020). These Acts have taken a value neutral approach to women and delegated their care to the state and the general public on ownership and governance matters.

In-terms of Land ownership challenge to women, the Tanzania Land Act (1999) and village Land Act (1999) recognize that women’s participation in mining is closely linked to the access and control over land. In this regard, the Act recognize women’s right to own lease and use land for productive purposes, however, customary practices still limit women’s access and control. Future amendments and reforms should consider incorporating gender aspects more explicitly by also mandating companies to adapt more gender sensitive policies and practices,

By loping women together with their male counterparts, the government assumes that these are equal players. It is oblivious of the historical challenges that women have faced and treats them like equal weights in boxing championship. The fact is that they are not. And should never be in this era of transitional minerals moving forward.

Recommendations to mitigate potential risks

  1. Government must review the existing legal framework with a futuristic woman in transition minerals lens. To ensure a more equitable benefit from this important upcoming energy transitional era, the Minerals legal framework would benefit from incorporating more stringent clauses that promote gender inclusiveness to protect women and artisanal miners in the Transition Minerals sector.
  1. Ring fence some mining licenses for critical green transition minerals to women and promote joint ventures between women miners and new transitional mineral companies.
  1. Formalization of mining licenses should take into consideration historical and structural barriers that small scale artisanal and women miners experience by providing access to financial credit and loans.
  1. Secure and strengthen women participation in transition minerals value chain. Economic empowerment interventions should continuously ensure a through gender impact analysis to asses who benefits more in the value chain and who is more affected negatively by the existent mineral operations. This goes along with identifying and providing relevant technical skills necessary for advancing women within the sector, narrowing the wage-gap, and enhancing markets.
  1. Women must deliberately create and government must support safe spaces for women in Transition Minerals. This must include efforts such as strengthening the Women in Mining Associations, formation of Tanzania Women Congress on Climate Change and Energy Transition and establishment of a dedicated National Symposiums and International Women Climate Conferences (COP) to consistently monitor and evaluate and discuss progress made by women in the critical minerals space.

  2. For us at GEPC the formation and operation of a united women front in the form of a Women Congress on Climate Change and Energy Transition offers the only unique opportunity of breaking the barriers that have undermined the different women movements and mining associations, thereby unlocking the potential of women to influence the climate change and transitional minerals spectrum in a more coordinated and reinforced manner. 

  3. Multinational Mining Companies must establish deliberate polices not to encroach or take over mineral licenses previously owned or occupied by women small scale and artisanal miners. Multinational Mining Companies must deliberately seek to partner with women miners as means for increasing women ownership and control of the Mining value Chain.
  1. Furthermore, enforce the law and practice to ensure larger mining companies do not encroach on women owned mining rights, reduce negative environmental impacts to communities and women in particular.

Conclusion

 The global shift toward critical minerals presents   a significant opportunity from critical or transitional mineral rich countries such as Tanzania. It however significantly creates both opportunities and risks for for women in artisanal mining. The booming demand could create an avalanche of new prospectors and investors targeting artisanal mining areas. Without targeted interventions, existing barriers—such as limited access to land, licenses, and financial resources—may further marginalize women in the sector. To ensure inclusive benefit for women in the critical minerals boom, , policy and legal frameworks must deliberately intentional to promote women’s participation through stronger protection, secured access to resources, and skills development. By addressing these challenges, Tanzania and other supplier countries can empower women artisanal miners and foster a more equitable and sustainable transition minerals sector. The vagaries of climate injustice can be addressed, the tainted history of the mining sector reclaimed and women catapulted into a better green future.

 References

BMZ. (2023). Raw materials for energy transition. https://rue.bmz.de/rue-en/releases/157362-157362

  1. Buss, B. Rutherford, J. Hinton, et al. Gender and Artisanal and SmallScale Mining in Central and East Africa: Barriers and Benefits (2017), GrOW Working Paper No. 2
  2. Onditi. Gender Inequalities in Africa’s Mining Policies: A Study of Inequalities, Resource Conflict and Sustainability, Springer, Singapore (2022)

HakiRasilimali. (2021). Engendering the mining sector: To what extent are women benefiting or losing out on revenue management? https://www.hakirasilimali.or.tz/wp-content/uploads/2021/09/Engendering-the-Mining-Sector-in-Tanzania.pdf

Kondo, H. (2023) An exclusive look at Tanzanian women in mining xxxxxxxxxx. https://www.sciencedirect.com/science/article/pii/S2214790X24000595

Majamba, H. I. (2020). The gender gap in Tanzania’s mining sector. Tanzania Journal of Development Studies, 18(1), 29-40.

Pact World. (2023). Artisanal miners: A hidden but critical force in the global economy. https://www.pactworld.org/blog/artisanal-miners-hidden-critical-force-global-economy

Policy Forum. (2022). Critical minerals and energy transition in Tanzania: A new dance, maybe?https://www.policyforum-tz.org/blog/2022-06-14/critical-minerals-and-energy-transition-tanzania-new-dance-maybe

The Citizen. (2023). How to bridge the gender gap in mining. https://www.thecitizen.co.tz/tanzania/magazines/woman/how-to-bridge-gender-gap-in-mining-4549718

United Republic of Tanzania Ministry of Minerals. (2024). Transforming Tanzania’s mining sector with strategic minerals on cards. https://www.madini.go.tz/page/e8a4201d-286f-4409-9db0-719311652336

Weldegiorgis, F (2022). Women and the Mine of the Future: A gendered analysis of the Employment and Skills in the Large-Scale Mining Sector -Australia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysis of Climate Change and Energy Transition impacts on women in Tanzania: Policy and governance gaps

Climate Change and Energy Transition are pertinent issues in contemporary global development challenge facing the world yet women are still at the periphery. Moreover there is a varied difference in how poor rural versus urban women experience the climate change and energy transition effects. The situation in Tanzania is not different.

Author(s):  Gloria Shechambo, Researcher and Moses Kulaba,  Governance and Economic Policy Centre

Climate Change and Energy Transition are pertinent issues in contemporary global development challenge facing the world yet its impacts on women and their practical engagement have remained nuanced and camouflaged in of volumes of endless winding texts and UN resolutions, with less significant impact. Women are still at the periphery and there is a varied difference in how poor rural versus urban women experience the climate change and energy transition effects .  Despite attempts, the situation in Tanzania is not different and warrants immediate consistent and purposefully intentional attention.

The world is one place yet  climate change and energy transition problems facing women are distinct because of their economic and social vulnerabilities and traditional care giving roles compared to men. 

Because women face a higher level of economic and social vulnerability compared to men, the meta question in climate change and energy transition must not remain how can the world and particularly developing countries be better positioned to be more adaptive, resilient and responsive but rather why is it a concern for women in particular? How and why should poor women be at the center of these discussions? In Tanzania this is even more critical given that women are disproportionately more affected than any other group.

 In fact, and justifiably, the demand for more women engagement in climate change and energy transition is not a feminist ask but a development imperative that must be addressed. 

This policy brief examines the intersection of gender, climate change, and energy transitions in Tanzania, emphasizing the importance of engaging women in bridging the disparities to inclusive actions and successful interventions for sustainable development. The brief highlights the disproportionate impact of climate change and energy-related disasters on women due to their caregiving roles and limited access to resources and efforts in place.

 By prioritizing gender justice and equality, Tanzania can strengthen resilience to climate change, reduce energy injustice gap and advance sustainable development.

Nexus of Climate Change and Energy injustice on women in Tanzania

Women often play key roles in food production and household food security yet climate change and energy significantly impact agriculture and productive sectors in Tanzania. Women, who constitute a substantial portion of the agricultural labor force, face heightened vulnerability to climate-related disasters and energy insecurity due to various social, economic, and cultural factors[1].

UNDP reports that more women than men (67 percent of the country’s total female labor force versus 64 percent of the male labor force) are engaged in agriculture.

Tanzania’s recent Agricultural Transformation Strategy known as Agenda 10/30 emphasizes the role of women in facilitating the sector’s growth to 10% by 2030[2] and thus places women in direct confrontation with the effects of climate change on agriculture and food production.

Additionally, in terms of energy; data from Gender and Energy country briefs for Tanzania indicates that by 2020 only 8.1% of households used clean energy sources and in 92% of households it is merely women who are vested with the responsibility to cook and collect firewood for use and thus affecting their health and time productivity (Energia, 2020). There are wider gender disparities when it comes to the impact of climate change and energy-related disasters in terms of vulnerability, resilience, and adaptation spread across a short and longer term.

Women often face disproportionate health impacts from climate change due to their roles as caregivers and their biological vulnerability. For example, during natural disasters or heatwaves, pregnant women and those with reproductive health issues may face increased risks. 

Both rural and urban women face systemic gender inequalities that limit their access to resources, education, and decision-making processes, exacerbating their vulnerability to climate change impacts. However, it is undeniably also true that poor rural women are more disproportionately affected due to their higher dependency on natural resources, their heavier involvement in agriculture, lower access to clean energy and more limited access to technology and information.  

On the other hand, urban women face more exposure to heat waves and poor air quality; they are more exposed to energy poverty particularly in low-income households; urban women are also more prone to working in sectors that are particularly affected by climate change or the energy transition, such as retail, hospitality, or informal sectors; urban women are also more likely to face affordability reliability and quality issues related to energy services.

Climate change-induced changes such as droughts or floods can impact agricultural productivity, potentially leading to food shortages and malnutrition, which disproportionately affect women and children. Climate-Induced changes can lead to increased burden for women such as traveling longer distances to obtain water for household use in turn causing higher chances of GBV (National Climate Change Strategy, 2021-2026).

Additionally, poor women’s ability to adapt and mitigate climate and energy-related impacts is limited by their limited access to resources such as land (33% women vs 47% men sole land ownership and 25% women vs 30% men joint land ownership)[3] 

Other crucial reasons that place women’s involvement in these discussions high on the agenda include the income disparities between women and men when it comes to dealing with the aftermath of disasters. According to UN Economic Commission for Africa, Women in Tanzania are one and a half times more likely to be unemployed at 12.3 per cent than men at 8.2 per cent with implications for household income disparities[4] (UNECA, n.d.)

Women’s disproportionate position in disastrous situations is fueled by the different gender roles played by women and men, for example in caregiving during and after disasters, collection of household water, and managing household sanitation; underrepresentation of women in decision-making processes related to climate change mitigation and adaptation. Women especially in rural areas experience lower access to information about adaptation technologies, cropping patterns, and weather events.

The net costs of climate change on women are staggeringly high yet the current climate change and energy transition debates and response measures have not adequately augmented, rallied and addressed the significant concerns facing women.

According to UN reports, particularly in developing countries, the consequences of climate change can increase the burden for rural women and girls, for example, causing them to travel further to obtain daily supplies such as firewood and biomass, leaving less time for paid work and potentially exposing them to greater risk to their personal safety[5] Climate change has exacerbated gender violence and injustice against women and drop out of young girls from school in search for water, food water and energy.

Moreover, the constant use of biomass as source of energy for cooking increases exposure to toxic fumes leading to high respiratory, cardiovascular diseases, cancers and death. According to medical reports, Cardiovascular and respiratory diseases were the top two leading cause of women’s deaths in Tanzania with the occurrence of cancerous cardiogenic diseases being more likely in urban women and respiratory diseases being more likely in rural areas due to indoor air pollution. These two accounted for 92.84 and 82.58% of all deaths per 100,000 in 2019, overtaking Maternal and Neonatal disorders. [6]

Pulmonary experts at Muhimbili National Hospital estimate that about 33,000 people, mostly women, die annually in Tanzania due to the use of charcoal, firewood and biomass for cooking[7]

Clearly there is a nexus between climate change, energy and deaths amongst women and that is why it is very important to engage women and consider the gender dimensions of climate change and energy injustice on women from planning interventions to implementation such that interventions address inequalities, are efficient, effective and sustainable.

Existing frameworks or mechanisms for women in climate change and energy in Tanzania

 Tanzania has developed various policies and strategies to address gender issues within climate and energy contexts. Key instruments include among others  the National Climate Change Response Strategy (NCCRS) 2021-2026 and the National Strategy for Mainstreaming Gender in Climate Change (NSMGCC) 2023 with the overall objective of ensuring that gender considerations are mainstreamed into national policies, programs and strategies related to climate change. The government is a signatory to a number of Multilateral Instruments on climate change.

In 2015 the government passed the Tanzania Sustainable Energy for All (SE4All) Action Agenda (2015). The goal of this agenda is to ensure access to modern energy, preferably clean energy; improvement of energy efficiency; and increase share of renewable energy in the global mix. The Government of Tanzania fully embraces the SE4ALL objectives. This includes recognising the fact that access to modern energy services is a necessary precondition for achieving development goals that extend far beyond the energy sector, such as poverty eradication, access to clean water, improved public health and education, women’s empowerment and increase food production. Further, the government passed the LPG promotion plan and the National Gas Utilisation Master Plan, aimed at increasing the use of gas as a clean fuel.

The National Guidelines for Mainstreaming Gender into Climate Change Adaptation-related Policies, Plans, Strategies, Programmes and Budgets (2014) Tanzania has mainstreamed gender into a number of national development frameworks and ratified international and regional gender instruments. Some of these frameworks include the National Development Vision 2025. Moreover, in 2022, the government convened the first national clean cooking conference and in 2024 launched The National Clean Energy Cooking Strategy 2024-2034.   The strategy aims at scale up the use of clean cooking gas as a source of energy.

According to Dr Dotto Biteko, the Deputy Prime Minister and Minister for Energy/ the Ministry of Energy, the government expects that by the year 2034, 80% of Tanzanians will be using clean energy to cook and therefore reducing on the amount of carbon emissions and exposure to toxic fumes by women[8].

Currently, the government is implementing a project funded by the Government of Sweden, to support market-based approaches for clean cooking in the United Republic of Tanzania. This intended to scale up use of  clean cooking gas amongst rural households.

To back this up, during the COP28 in the UAE, President Suluhu Samia Hassan launched the Africa Women Clean Cooking Support Program (AWCCSP. This program encompasses promotion of use of gas cooking stoves and gas cylinders in Africa and Tanzania in particular by fostering energy and policies changes to cater for the earth’s prosperity, will cut carbon emission significantly.  President Samia acknowledges that women and girls bear the brunt of lack of sustainable energy cooking solutions and clean cooking energy is about mitigation, women empowerment and welfare.

Despite these efforts, there are significant policy and governance gaps that exist. In our second part of this brief we will bring you the policy and governance gaps and how government can address them. Keep on the look out and visiting this site for the next part of this brief.

Solar and Energy Transition: Good policy intentions but less progress: Assessing Tanzania and EAC’s Utility scale solar energy potential and policy gaps to fix

Governments are struggling with little success to attract and retain utility scale solar projects and many have died in their nascent stages. Yet utility scale solar projects could be a significant contributor to resolving the regions power shortages and increased energy access by sizeable proportions. So, what is holding back utility scale solar projects and how can governments maneuver to attract and retain more investors. 

By Moses Kulaba, Governance and Economic Policy Centre

@energypolicy @cleanenergy @solarafrica @energytransition

Multiple studies have concluded that the Eastern Africa region has the highest technical potential for solar power technologies, with estimates of 175 PWh and 220 PWh annually for Concentrated Solar Power (CSP) and Photovoltaics (PV) respectively. African countries with the highest CSP and PV potentials are Algeria, Egypt, Namibia, South Africa, Sudan, and Tanzania.  The annual technical solar power potential in Tanzania is estimated to be 31,482 TWh for CSP technology and 38,804 TWh for PV technology. Despite this potential, Tanzania and EAC lags behind its peers such as South Africa, Algeria and Egypt. Besides the technical aspects as earlier discussed, the policy terrain in East Africa has been largely zig zag and therefore not coherent enough to support investment.

In this second part of our analytical series on solar as a clean energy source, we attempt to shade some light on the policy terrain in Tanzania and East Africa generally and how this is contributing towards holding back large-scale investment and utility scale solar penetration.

Policy and investment terrain

Generally, the policy and investment landscape in East Africa has been evolving at a snail pace. Both Tanzania, Kenya and Uganda have renewable energy policies in place however these are not backed up by adequate promotion, implementation and funding. The regulatory terrain has also been discordant.  For the region to benefit, the policy and investment trajectory will have to align and move faster, catching up with the global trends and the drive to clean energy.

Tanzania’s policy terrain.

The government passed a National Energy Policy (NEP) in 2015 with a commitment to increase the share of renewables in its energy mix. The NEP 2015 seeks to facilitate improvement of investment environment to promote and support private sector participation. The policy further commits to scaling up utilization of renewable energy source by among others introducing a.. feed-in-tariffs for renewable energy technologies and structure power purchase agreements for renewable energy.  

It further commits to facilitate integration of renewable energy technologies in buildings and industrial designs and establish frameworks for renewable energy integration into the national and isolated grids; an Promote sustainable biofuel production and usage.

However, actualization of this has been slow. To date contribution of renewables to Tanzania’s energy mix remains low at 1.2 %. By 2021 Tanzania’s electricity generation came mostly from natural gas (48%), followed by hydro (31%), petrol (18%) with solar and biofuels contributing a mere 1% each. The National energy consumption balance is still dominated with biomas (charcoal and firewood) use at around 85%.

Tanzania government admits that that solar utilization is constrained by high initial costs, poor after sales services, insufficient awareness on its potential and economic benefits offered by solar technologies plus inappropriate credit financing mechanisms.

Previous policies, particularly the 2003 was successful in the establishment and operationalization of Energy and Water utilities regulatory authorities, the Rural Energy Agency (REA) and the Rural Energy Fund, However, it fell short of making advancements on the renewable energy, particularly by not creating a designated and operational Renewable Energy Fund. By design it is implied that funding of the renewable sector would come directly from the consolidated Energy Fund. However, with conflicting priorities and government’s focus on increasing energy access to hydro and gas fired electricity, much of the available funding was channeled towards rural electrification.

In 2012 Tanzania was one of the pilot countries selected to prepare the Scaling Up Renewable Energy Program (SREP). The chief objective of this plan was to transform the energy sector of Tanzania from one that is more dependent on fossil fuels to one that is more diversified with a greater share of renewable sources contributing to the energy mix through catalyzing the large–scale development of renewable energy.

The SREP–Tanzania Investment Plan was prepared by the Government of Tanzania, through a National Task Force led by the Ministry of Energy and Minerals (MEM) with support from the Multilateral Development Banks (MDBs). However much of this plan is yet to fully takeoff and its translation into actual deliverables yet to materialise

Cognizant of the significant gaps that exist, in 2023 the Minister of energy at time, Hon January Makamba revealed that the government was developing a new Renewable Energy Policy to further enhance investments in renewable energy. This policy would capitalize on the substantial financial resources, capital markets, and advancements in new technologies dedicated to renewable energy globally. He also announced ongoing efforts to identify areas with renewable energy resources and prioritize native investments in wind and solar projects. The government would provide support in this regard and establish guidelines for project implementation.

In 2023 Tanzania entered into an agreement to construct the Country’s first-ever solar photovoltaic power station to feed into the national electricity grid. According to the Ministry of Energy, the project is part of a larger initiative of installing 150 MW of solar energy in the Kishapu district of the Shinyanga region. The first phase of the project to be constructed by Sinohydro Corporation from China was estimated at TZS 109 billion and was scheduled for completion before end of 2024.

According to the Minister, the implementation of the solar project reflected the government’s commitment to establishing a diverse mix of electricity sources in the national grid, incorporating water, gas, wind, and solar power. This approach aims to ensure a continuous supply of electricity, even in the event of a failure in one source.

There are also several large-scale solar power projects under development, including the 30 MW Singida project and the 50 MW Nyumba ya Mungu project. In addition to government efforts, there are also private companies and organizations working to develop renewable energy projects in Tanzania.

Similarly, Zanzibar, the semi-autonomous Island of Tanzania, also signed in 2023 an agreement with a Mauritius-based Generation Capital Ltd and Tanzania’s Taifa Energy to build its first large-scale 30MW solar PV power plant, as it seeks to become energy independent. The plant will cost $140 million. The Power Purchase Agreement (PPA) between the state-owned Zanzibar Electricity Corporation (Zeco) and the two companies to develop the 180 megawatts plant will be implemented in phases, according to Zanzibar’s Ministry of Energy and Minerals.

Kenya’s solar terrain

Garissa Solar Farm

So far, Kenya is leading in large solar projects.  There are at least 10 large solar farms in Kenya. The Garisa solar farm, is the largest in East and Central Africa, with 55 MW generation capacity. The solar farm sits on85 hectares (210 acres) and consists of 206,272 265Wp solar panels and 1,172 42kW inverters owned and operated by Rural Electrification and Renewable Energy Corporation. Others already operational or proposed include; Malindi Solar (52MW), Alten Kasses (52 MW), Kopere Solar Project (50MW), Eldosol Solar Project (48MW), Radiant (50MW), Rumuruti (40 MW), Nakuru Solar project (40MW), Witu (40MW) and Makindu (40MW).

Kenya has buttressed its renewable energy credentials with a new Energy Transition and Investment Plan (ETIP) launched in 2023. The ETIP spells out Kenya’s road map to delivering a 100% clean energy driven economy by 2050. The country is however yet to figure out how it will fund this ambitious plan. Over the past recent years Kenya has been facing significant budgetary constraints affecting funding of its major national development plans. Even when the government has committed to achieving 100% clean energy by 2030, it bets heavily on funding from external donors. With the recent trend in aid inflows and if they remain unchanged in the short and medium term, it will be a tall order Kenya to meet this target.

Uganda’s solar uptake

Uganda has been slowly catching up with its peers. Uganda’s policy commits to make modern renewable energy a substantial part of the national energy consumption. To increase the use of modern renewable energy, from the current 4% to 61% of the total energy consumption by the year 2017[i].

The policy terrain has been zigzagging and investment in renewables is still low but the government has blended its focus on hydropower generation with small investments in solar projects as back up for its hydropower. There was a big growth in 2021, reaching 92 MW, followed by a significant increase of around 6.9 MW, reaching a total of 98.9 MW Uganda’s installed solar energy capacity in 2022.

Some of the projects contributing to this growth include Kabulasoke Solar PV Park is a 20MW solar PV power project, located in Central, Uganda, Bufulubi solar project in Tororo and Access solar plants in Soroti.  New pipeline projects include the Amea West Nile Solar PV Park, a ground-mounted solar project, whose construction was expected to commence from 2024 and subsequently enter into commercial operation in 2025. The power generated from the project will be sold to Uganda Electricity Transmission under a power purchase agreement. 

This however falls short of achieving the targets as stipulated in Uganda’s Renewable Energy policy. Uganda’s renewable energy policy commits to establish and maintain a responsive legislative, appropriate financing and fiscal policy framework for investments in renewable energy technologies. It mentions forms of financing such as strengthening the Credit Support Facility and Smart Subsidies which are intended to scale up investments in renewable energy and rural electrification.

Moreover, a special financial mechanism, a credit support facility known as the Uganda Energy Capitalisation Trust, was instituted to help realise the policy but this expired in 2012 and had never been renewed[ii]. Uganda lags in meeting its policy targets as only 10 solar projects had been completed by 2022[iii].

What is the current market and investment size?

According to global energy reports, there is a substantive market size of solar photovoltaic (PV) in East Africa and Africa generally. The Middle East & Africa solar photovoltaic (PV) market size was valued at USD 5.00 billion in 2022. The market was projected to grow from USD 6.93 billion in 2023 to USD 37.71 billion by 2030, exhibiting a cumulative Average growth rate (CAGR) of 27.4% during the forecast period.

Despite its immense solar power potential, East Africa and Africa generally continues to lag behind other continents when it comes to building up utility scale grid and off-grid solar capacity, in part due to a stagnant policy regime, overlapping institutional roles, limited research, technical capacity and lack of appropriate financing facilities for investment.  Some proposed projects have failed to take off.  As a consequence, the total investment share of utility scale projects into East Africa remains comparable low.  

So, what can EAC governments do to make utility scale solar markets attractive?

Recommendations

# Governments must make policy switches from paper to aggressive attracting of investment into the solar PV East African markets. The policies may exist but the implementation gap is too big. Policy interventions and a national course-correction is urgently needed to effectively overcome structural barriers and create local value in the emerging solar market many of which is still left behind in this progress.

# Decentralization of energy generation away from vertically integrated power monopolies such as TANESCO and Kenya power could be a game changer.  De regulation and introduction of net metering by independent Solar PV power producers to directly generate and sell to customers could improve profitability of solar projects and attract new investments.

# Financing institutions must scale up project financing of renewable energy projects.  Solar projects are still expensive and funding is difficult to come by. Kenya’s Garisa solar project required an investment of KSh13. 7 billion ($135.7 million) and was funded by the Exim Bank of China. Other projects have required substantive investment with funds generated from private developers and energy venture capitalists. The existing financial institutions are yet to master tailing project financing to utility scale solar projects.

# Addressing land rights and underlying injustices. Large solar farms require large tracts of land and these can be a source of land grabbing, land deprivation and injustice, generating conflicts and endless litigation between potential investors and the communities. The renewable policies and investments have to sit well with land rights, guaranteeing free prior informed consent, fair compensation and equity,

# Socio-economic: Identifying and prioritizing suitable areas for building large-scale solar power plants is a complex problem. In contrast with the simplistic view, identifying appropriate geographical areas for solar power installation is not only linked with the amount of received solar radiation, but there are many other technical, economic, environmental, and social factors that should be considered like: alternative land uses, topographical characteristics of the land, conserving protected areas, potential environmental impacts, water availability, potential urban expansion, proximity to demand centers, roads proximity, and potential for grid connectivity.

# Solar technology firms must address intermittence and storage of renewable energy. Solar power is generally reliant on the availability of sunshine. Depending on the weather and hours of the day and night. Unfortunately, the technology has not advanced far enough and made cheaply available to East for storage of solar power. For solar power users the days are hot and the nights are cold.

# Government leaders must have a unified political will to support renewables as part of the master energy mix and regional energy power pool. So far there is a divided political opinion on what solar power can do in helping the governments to meet their national energy demands. While Kenya is a front runner, other countries are still focused on hydro and gas. The future of distributed solar therefore depends largely on good political will driving favorable polices and changing mindset to embrace solar power as a new source of energy. This could be reflected in new generation policy drivers such as requirement for solar considerations in building designs and integrated power systems.

[i] Renewable Policy for Uganda; https://s3-eu-west-1.amazonaws.com/s3.sourceafrica.net/documents/118159/Uganda-Renewable-Energy-Policy.pdf

 

[ii]

[iii]

The Petals of Blood: Dissecting the contagion effect of Sudan war on South Sudan and EAC with lessons on governance and state failure

The Sudan war has been raging for almost a year, with catastrophic effects now spreading beyond Sudan’s borders, affecting its neighboring South Sudan and the East Africa Community (EAC) in many ways.

By Moses Kulaba, Governance and Economic Policy Centre & James Boboya, Institute of Social Policy and Research (ISCPR), South Sudan

According to the United Nations, since it started, the war has now destabilized the entire region, leading to the deaths of more than 5,000 Sudanese and displacing millions both within the African nation and across seven national borders.[1]  Sudan is now home to the highest number of internally displaced anywhere in the world, with at least 7.1 million uprooted.[2] More than 6 million Sudanese are suffering from famine, and these numbers are growing every day.  The health system has broken down, and more than 1,200 children have died from malnutrition and lack of essential care. [3]The UN now describes the Sudan conflict as a forgotten humanitarian disaster, while the International Crisis Group has warned that Sudan’s future, and much else, is at stake.

Lest we forget, within a short period, the third largest nation in Africa, with a size of more than 1.8886 million square kilometers and at least 46 million people, has no properly functioning government, and all state institutions have collapsed with the effects of its meltdown spilling over to its neighbors, particularly South Sudan.

South Sudan is host to thousands of Sudanese refugees forced across the border into South Sudan, exerting social and economic pressure on an already fragile state that was already sinking under the burden of its own civil war and internal conflicts.

The Norwegian Refugee Council (NRC) reports that more than 500,000 people have now fled from the war in Sudan to South Sudan. [1]This means that over 30 percent of all the refugees, asylum seekers, and ethnic South Sudanese were forced to flee Sudan since the war exploded in April 2023 for protection in one of the poorest places on earth. “South Sudan, that has itself recently come out of decades of war, was facing a dire humanitarian situation before the war in Sudan erupted. It already had nine million people in need of humanitarian aid, and almost 60 per cent of the population facing high levels of food insecurity.

As of 28 January 2024, more than 528,000 ethnic South Sudanese, Sudanese refugees, and other third-country nationals had crossed at entry points along the South Sudan border into Abyei Administrative Area, Upper Nile, Unity, Northern, and Western Bahr El Ghazal. The majority, 81 percent, entered at Jodrah before making their way to the transit center in Renk. Ethnic South Sudanese who have crossed the border from Sudan are commonly referred to as “returnees.” Still, in reality, many of them were born in Sudan and have never been in South Sudan, and therefore have no kinship connection in host communities.

The conflict has spilled deeper into other East African countries, with thousands seeking refuge and safety from it. The education system collapsed, sending thousands of learners back home and hundreds who could afford to flee exile to continue their studies. Some of these were admitted to Rwandan and Tanzanian Universities.

The Sudan and South Sudan experiment was a governance disaster in the waiting and perhaps serves as a lesson of how a firm grip on power, corruption, and misgovernance can ultimately lead to catastrophic state failure and collapse.

Donald Kasongi, Executive Director of Governance Links and a former senior officer with the Accord, a regional conflict organization, describes the post-Garang South Sudan and post-Bashir Sudan as a protracted governance failure. The diverse strategic roles of Khartoum, Beijing, and Washington in the Sweet South Sudanese oil are now evident.  So far, none is a victor.

The role of external interests in shaping national discourse has been at play. Sudan is caught between the interests of the West and the Middle East and China, with both interested in controlling access to Sudan’s resources, cultural wealth, and strategic positioning as a buffer between the North and South. Before the war, Sudan identified itself with the Islamic world and pronounced itself as an Islamic state. Despite this alignment, the OIC and the larger Islamic world has not come to its help. Sudan remains an isolated state left to collapse at its fate.

In South Sudan, the Garang vision of a strong independent nation was lost. After his demise most of the post Garang political elites or military war generals became pre-occupied on restoring the lost years at war by amassing wealth through corruption and sharing out of the limited resources from the oil resources. As a consequence, a strong nation is yet to be built. They had won the war but lost their country. The same mistake plays out in Sudan. Perhaps the conflict is a lesson on what it means to lose what is so dear to one- A country.

In short, the transition in both countries (Sudan and South Sudan) were not well managed and what we see are petals of blood from toxic flowers of bad governance which have flourished like a forest planted along the banks of the river Nile.

According to James Boboya, the Executive Director of the South worrisome. The raging war has made South Sudan’s oil exports via Port Sudan difficult. Oil exports have collapsed by more than half from 160,000 barrels per day in 2022 to 140,000 barrels per day in 2023. This was more than half of the previous peak of 350,000 barrels per day before civil war broke out in 2013.[2] The South Sudanese dollar collapsed in value. There is a financial crunch and the South Sudanese government has not paid its public and civil servants for months. There is a risk of insurrection and demonstrations by public servants that will be likely joined by the military. This would plunge South Sudan into chaos and total collapse just like its Northern neighbor.

Moreover, this conflict and its associated effects comes in an election year for South Sudan.  The general elections are viewed as a watershed moment which may see a transition from President Salva Keir to a new cadre of leadership. With the economic crunch, South Sudan may not be able to organize and fund a credible general election. This will be not good for South Sudan’s democracy and desired future.

With the world’s media focused on the Russia-Ukraine war and the Israel-Gaza wars, little is covered about the Sudan conflicts nor the total economic catastrophe that South Sudan faces.

If not addressed, the Sudan war will be soon inside the borders of the EAC. Can the EAC afford to stand by and watch longer as its member state, collapses.  Mediation efforts led by Kenya and Djbouti were postponed last year. Direct talks between Abdel Fattah al-Burhan, Sudan’s army chief and de facto head of state, and General Mohamed Hamdan Dagalo, known as Hemedti, head of the RSF paramilitaries remain futile.  What can South Sudan and the EAC do now to avert further catastrophe?

During a joint webinar organized by the Governance and Economic Policy Center (GEPC) and the Institute of Social Policy and Research (ISCR) in South Sudan in April, a distinguished panel of experts discussed and enabled us to understand the contradictions and magnitude of this war with implications and lessons on extractive governance, and state collapse drawn for East Africa and Africa generally, can be taken to avert the situation and its contagion effect on the EAC and Africa generally. The panelists and participants highlighted some key lessons and takeaways that can be drawn from the conflict.

Key lessons and takeaways

Ethnicization of politics and governance can lead to a spiral of violence and catastrophic state collapse, especially when the strong ruling elite and regime finally lose control of power.

A previously united Sudan started getting balkanized when the ruling elites started practicing the politics of ethnicity and religion pitting the largely Muslims in the northern and western parts of the country against their Christian southerners.  The Christians were portrayed as slightly inferior, denied political and economic opportunity, and subjected to forced Islamisation, and inhumane conditions such as slavery. Faced with what was considered unbecoming conditions the Southerners opted for a rebellion and demand for independence. The first and second Sudanese civil war (including the Sudanese Peoples Liberation Movement (SPLM/A) were born and the political dynamics in Sudan changed for decades after. New factions such as the Sudanese Liberation Army (SLA) and the Justice Equality Movement (JEM) emerged and Sudan never remained the same.  Sentiments for cessation and independence in Darfur flared and faced with an insurgency, President Omar enlisted militias including the Janjaweed to quell the rebellions. Around 10,000 were killed and over 2.5 million displaced. The balkanisation of Sudan was continuing to play out.

Militarisation of politics erodes democratic values and principles which can take decades to rebuild.

Omar Bashir came to power in 1989 when, as a brigadier general in the Sudanese Army, he led a group of officers in a military coup that ousted the democratically elected government of Prime Minister Sadiq al-Mahdi after it began negotiations with rebels in the south. Omar Bashir subsequently replaced President Ahmed al-Mirghani as head of state and ruled with the military closely fused into the politics and governance of Sudan.

The military elites elevated to power during President Omar Bashir’s government enjoyed privileged positions.  Even with his overthrow in 2019, these generals maintained a firm grip on the Transition Military Council and the Civil-Military Sovereignty Council.  These are less likely to accept any position below total control of the central authority. The net effect is that the return to full civilian and democratic rule of state governance in an entrenched militarized political environment such as Sudan can or may take decades to be rebuilt.

Vulnerability to geopolitical manipulation and fiddle diddle can be a driver to political instability and eventual weak governance

Both Sudan and South Sudan have been victims of well-orchestrated geopolitical game plans from external powers interested in taking control of the rich natural resources wealth that these countries possess. Sudan and South Sudan have vast oil deposits and forestry products.  With eyes focused on these resources external powers succeeded in playing one community against another and one country against the other and successfully throwing the region into an abyss of endless crisis. Religion was used as a tool to play the North against the South and continues to be used in some segments of the Sudanese and South Sudanese communities.

Key Takeaways

  1. The East African Community (EAC) governments cannot afford to take a wait-and-see attitude. The problems facing Sudan and South Sudan are latently present in several other EAC countries. For this reason, therefore without taking lessons from Sudan and South Sudan other countries can also easily erupt in the future, bringing down the entire EAC. The EAC has therefore an obligation to ramp up support for the resumption of the peace process and finding lasting solutions for peace and tranquility in the two countries. For this to happen there has to be trust and objectivity of the actors to the crisis and the EAC mediators. 
  1. Stop ethnicization and militarization of politics and state governance: The Sudan experience demonstrates this, whereby the collapse of President Omar Bashir’s strong grip on power let loose the lid off a can of worms that had eaten the state to its collapse. Similar conditions of ethnic rivalry in state governance have created uncertainty about guaranteed stability in South Sudan. In some other EAC member states there have been attempts to elevate dominant ethnic groups to power and military influence in state politics built around one strong leader. The Sudan experience demonstrates that the absence of such a strong leader holding the center together can lead to a lacuna, leading to a trail of conflict and instability leading governance to fall apart and eventual state collapse.
  1. The EAC countries must stop viewing at South Sudan as merely a market but as an independent viable state whose stability is good for the entire region. According to the EAC trade statistics, South Sudan was the leading market for goods from Uganda and Kenya. With a total population of 11 million and a collapsed agricultural and industrial base, South Sudan has provided a ready market for agricultural goods and manufactured goods from Uganda and Kenya. According to UN Comtrade Data Uganda exported goods worth USD483.9Mln and Kenya’s exports to South Sudan were worth USD170Mln. Uganda’s exports to Sudan also increased by 154% from around USD48Mln in 2016 to USD123Mln in 2022.  With the eyes largely focused on trade opportunities, there can be a tendency to lose track of the human suffering that the people in these countries face. Also, the jostle for geopolitical control over trade deals can overwhelm the genuine solidarity intentions of good neighbors. The EAC members should focus on the stability of these countries. 
  1. The International Community Must not give up on Sudan and South Sudan. Despite the donor fatigue and reports of corruption, the international community has a moral obligation to continue engaging with the protagonists in the war, facilitating the avenues for a peaceful resolution of the conflict and providing humanitarian aid to the suffering people. The Sudan and South Sudan conflict must be treated with equal measure with the Ukraine-Russia, Israel, and Gaza conflicts. The EAC must scale up diplomatic efforts and be an Anchor in Chief in this process, coordinating and connecting Sudan, South Sudan to the world. 
  1. The EAC media and Civil society must continue highlighting the suffering in Sudan and South Sudan. With the Israel and Gaza war ongoing, the Sudan and South Sudan stories that were largely covered by the Western media have since died out.  There has been little coverage given within the EAC of the recent developments in this war and how it is affecting its neighbors. Moreover, with limited internet connectivity and restrictive conditions, communication advocacy from inside Sudan and South Sudan is quite difficult.  The media and civil society in the EAC therefore must speak loud on behalf of their Sudanese counterparts

 

[1] War in Sudan displaces over 500,000 to South Sudanhttps://www.nrc.no/news/2024/january/sudan-refugees-to-south-sudan/#:~:text=%E2%80%9CMore%20than%20500%2C000%20people%20have,the%20poorest%20places%20on%20earth.

[2] The East African Business Khartoum unable to ensure smooth export of South Sudan oil https://www.theeastafrican.co.ke/tea/business/khartoum-unable-to-ensure-smooth-export-of-south-sudanese-oil-4564064

[1] Sudan conflict: ‘Our lives have become a piece of hell’ https://www.bbc.com/news/world-africa-67438018

[2] War in Sudan: more than 7 million displaced – UNhttps://www.africanews.com/2023/12/22/war-in-sudan-more-than-7-million-displaced-un//

[3] More than 1,200 children have died in the past 5 months in conflict-wrecked Sudan, the UN sayshttps://apnews.com/article/sudan-conflict-military-rsf-children-measles-malnutrition-ec7bb2a1f49d74e7b5f01afa12f16d99

Oil and Energy Transition: Why Sudan conflict provides new hope for EACOP

The Sudan conflict is a catastrophe that must be stopped but its unintended consequences provide new optimism for the East African Crude Oil Pipeline (EACOP).

By Moses Kulaba, Governance and Economic Policy Center

With the constant fighting and insecurity along the pipeline and its pumping stations, the South Sudanese government is now open to exploring new opportunities via EACOP to guarantee its future oil exports.

On March 16th the government of Sudan admitted that it cannot guarantee the smooth export of oil from South Sudan, as a year of war has made it difficult to maintain or even protect the pipeline to Port Sudan.

In a letter to major oil companies involved in the oil production and export, Sudan’s Minister of Energy and Petroleum Dr Mohieldin Nam Mohamed Said admitted that the war had made it difficult to provide any guarantees for safety.

He acknowledged that the conflict was hampering the flow of oil to Port Sudan, as it took time to repair pipelines ruptured during the fighting. In addition, there was a telecommunications breakdown between the pumping stations (PS4) and PS5 in Sudan, which were shut down in the midst of heavy fighting. The area was an active military zone and access for repairs was not guaranteed.

As a response the South Sudanese government had declared a force majeure, making production and export impossible and thereby revamping suggestions to explore new possible safer routes for South Sudan’s oil.

The war in Sudan added to the challenges South Sudan faces in maximizing its only major resource – oil – to fund a financially constrained government and other operations.  As a consequence of the war, South Sudan’s oil production fell from 160,000 barrels per day in 2022 to 140,000 barrels per day in 2023. This is was more than half of the previous peak of 350,000 barrels per day before civil war broke out in 2013.

Talks to have South Sudan pump its oil south wards had all along been explored and presented as part of Uganda’s grand plan to make the EACOP an East African project by connecting and supplying all the EAC member states with oil and gas.

Under this grand plan and initial drawings, the Oil pipeline would radiate from its nerve center in Hoima with an artery of pipelines running northwards to South Sudan, westwards to the Democratic Republic of Congo (DRC), eastwards to connect Kenya’s oil from Turkana and southwards with an arm extended to Rwanda and long route via Tanzania to Tanga port.

Map showing initially considered alternative EACOP routes

But the progress of this was partly hampered by Uganda’s fall out with the Kenyan route and the existing agreements signed between Khartoum and Juba during the independence talks. Provisions in these required among others a concession that Sudan will retain territorial control of some oil rich territories and that South Sudan would continue exporting its oil via Port Sudan. By doing this, the government in Khartoum would maintain some revenues from the oil sector that had been largely lost with South Sudan’s cessation and independence.

I remember in a private conversation with a friend from Sudan some years ago he confided that during one meeting with   Sudanese youth and young professionals, President Omar Bashir, before his overthrow, had admitted that he was not sure about the economic future of Sudan without South Sudan. He clearly predicted a catastrophic economic meltdown leading to chaos and that was why Sudan had to maintain a grip on South Sudan. The oil pipeline was a win-win infrastructure politically and economically anchoring the two countries as good neighbors.

By Sudan admitting that the safety cannot be guaranteed and reconstruction of the damaged infrastructure will take longer than usual provides South Sudan with a legitimate cause to start exploring new safe routes for its oil.

An oil route from Juba southward would be beneficial to South Sudan, the EACOP but also good for the East African Community as a region. South Sudan derives 90% of its revenues from oil exports and would like to have a constant flow of this oil to sustain its economy. EACOP would guarantee that flow. South Sudan would also have access to other EACOP related infrastructure such as the refinery and international airport for other logistical needs.

An extended pipeline from Hoima northwards to connect with the oil from South Sudan would increase volumes of oil pumped out of EACOP by at least 150,000 to 200,000 barrels per day, increasing EACOP’s profitability and attractiveness to investors.

Moreover, with its oil, South Sudan would become a major regional player with a stronger voice in EAC matters perhaps more than it is today. The pipeline would bring Sudan in the north closer to the EAC, increasing its prospects for joining the EAC and thus facilitating the region’s expansion ambitions.

There could be some differences in the chemical composition and technical aspects of the two oils (Uganda and South Sudan) with perhaps one being waxier than the other but these complexities can be handled through technical re-engineering and design of the oil pipeline.

The EACOP has always been a controversial project with environmental activists and anti-oil crusaders campaigning against its construction.  Environmentalists argued that the world’s longest heated pipeline will have serious environmental impacts and contribute to global warming. The future profitability of the pipeline was also questioned given the global push towards a transition away from fossil-based system and uncertainty about the future of oil as an energy source.

None the less, plans for construction of the pipeline are ongoing.  Land compensations in Uganda and Tanzania was completed. An advance consignment of pipes was delivered and a coating and insulating plant for the pipelines was commissioned and already operational in Tanzania, paving way for the pipeline construction and ground laying to commence before end of 2024.

The conflict in Sudan therefore provides more impetus to the project as it opens a new door for possible access and increased volumes from South Sudan’s oil and taping into already existing markets can be guaranteed.

The future of oil as a dominant fuel in the global energy system is a controversial subject and a debate exists whether it makes sense to construct new oil pipelines and infrastructure.  

However, the crisis and the significance of oil in driving South Sudan’s economy comes at a time when there are all indications that major global super powers such as the United States and United Kingdom are backtracking on their commitments to end and move away from fossil or oil as source of energy.

Despite the announcements made at the COP27 and 28, in his maiden speech to Parliament, King Charles in November 2023 announced that the UK government will issue new licensing rounds for exploration and drilling of oil and gas in the North Sea. The rounds will go ahead each year so long as the UK remains a net importer of oil and gas and if emissions from UK-based production remain lower than those associated with imports.

In the US, Republicans have maintained a firm support for oil and Donald Trump, the most preferred Republican nominee for President has vowed to overturn any existing legislation and commitments made by the Democrats against the fossil energy sector, by signing an executive order to issue new rounds oil and gas drilling.  According to Trump this would be his first executive order immediately signed, if he was elected to power in November of 2024. Clearly, the US political will is divided and the future US policy terrain on oil and gas cannot be guaranteed.

Quietly, the leading oil producers are strongly supporting continued pumping of oil. Despite global campaigns, large oil producers are still skeptical that renewables can replace oil in the medium term and by 2050. They believe that the focus should be on decarbonizing oil and not ending its supply and use all together. Ending use of oil would be returning the world to stone age error, one Middle East leader remarked at COP28 before backtracking after coming under intense criticism. The approved language at COP28 was phase down and not phaseout. Oil therefore may have a longer lifetime than earlier anticipated.

Despite the catastrophe that the war has caused, that we all condemn, Uganda and Tanzania should exploit the opportunity it provides to ramp up and conclude talks with South Sudan on the viability of exporting its oil via EACOP.

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.

 

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