The new UN economic report on Africa speaks of the continent’s great potential. However, money is lacking for the expansion of the economy and renewable energies.
Forklifts roll through the CP Solar factory on the outskirts of Kenya’s capital, Nairobi. The company supplies solar systems for trade, industry and private customers. However, the modules are not produced in the country, says General Manager Annissa Osman: “Our headquarters are in France, but the panels are imported from China. Most of the systems sold worldwide come from there. The Chinese systems are particularly widespread in East Africa.”
Kenya once dreamed of getting involved as a producer in the field of solar energy. But in the meantime the competition from China has won. The systems from Kenya simply could not keep up in terms of price. Now it’s just assembling.
Renewable energies as an opportunity
Alternatives to the market-dominating China would definitely be necessary, says Rebeca Grynspan, Secretary General of the United Nations World Trade and Development Conference. That was already shown by the corona pandemic, when China suddenly stopped delivering: “Being 80 percent dependent on one supplier for solar panels is a problem. There has to be diversification – and that’s already happening.”
The UN organization presented a report on economic development in Africa in Nairobi. The continent has a lot of potential, say the experts. A large part of the raw materials required worldwide comes from here. In the metropolises in particular there are more and more well-trained young people who are involved in developments in the digital industry, for example. And the expansion of renewable energies offers new opportunities.
There is a lack of money
However, as in the solar sector, there is often a lack of the necessary capital. Investors are reluctant to invest on the continent. “Two percent – only two percent – of global investment in renewable energies goes to Africa. There are opportunities here, but the money isn’t coming,” says Grynspan.
The start-up difficulties would have to be bridged with international support, says Grynspan. Then not only Africa would benefit, but also the rest of the world, because gaps in the global supply chains would be closed: “Politicians and investors only have to create the necessary framework for this to happen.”
A first step could be to lower interest rates for African countries. Because of the risk assessments by rating agencies, financiers estimate eight times as much on average as for European countries. That makes development difficult.
Solar energy is booming
Despite all the hurdles: “CP Solar” hopes for further growth. Because solar energy is also booming in Kenya, says the managing director: “15 years ago, people had at most a solar pocket calculator. Now this form of energy is playing an increasingly important role.”
She has even received requests for solar-powered cars, reports Osman: “We’re not that far yet, but we hope that it can be developed.” Again, the same applies here: The competition from China never sleeps. But maybe Africa can keep up at some point.