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Europe’s energy demand boosts Africa’s importance

AMADOU DIALLO The DHL Global Forwarding MEA CEO is confident that Africa will continue to remain of high importance in the future energy transition

RENEWABLE RESOURCE REVOLUTION Wind turbines are a prime example of an alternative method for energy generation

22nd March 2024

By: Trent Roebeck

Features Reporter

     

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Ongoing geopolitical tensions and conflicts – such as the war between Ukraine and Russia, and trade tensions between China and the US – are increasing the trend of European countries investing in countries on the African continent for new and/or replacement energy sources, as well as manufacturing facilities in different sectors, says logistics company DHL Global Forwarding Middle East and Africa CEO Amadou Diallo.

Consequently, there will be new opportunities for DHL in the Middle Eastern and African market, as Europe aims to retract from using Russian energy supply, such as gas, and explores new sources of, or locations for, energy.

“There are talks of the potential construction of gas and hydrogen pipelines, such as the Nigeria-Morocco Gas Pipeline or a hydrogen pipeline connecting North Africa and Europe. This creates interesting growth opportunities for us in the project logistics sector. In addition, we see more and more manufacturers are expanding their production facilities to the African continent to be closer to the European and African markets. A development that will further increase the demand for logistics and transport.”

However, before this is done, Diallo adds that it is important for African countries, such as South Africa, Nigeria and other West Africa countries, to provide affordable and greener energy for their respective populations. This will reduce Africa’s dependence on expensive imports, which will, in turn, reduce the negative impacts that such reliance might have on Africa, including hyperinflation, owing to poor-performing hard currencies.

For example, South Africa can “deaden the deficit” of the trade imbalance – owing to the increase in imported generators and uninterrupted power-supply technologies to mitigate supply-related issues such as loadshedding – by generating its own electricity using alternative renewable resources.

Diallo adds that the country is struggling to become the hub of Africa as there is a lack of affordable energy, infrastructure issues persist at the Durban port and red tape has complicated the country’s import and export processes, besides other, protracted challenges.

“South Africa has to leverage its opportunity to enable further intercontinental trade, in addition to international trade and exports, and should become a relevant place for connecting all of the African countries [through] trade.”

There are several projects that will come into existence once South Africa’s port issues are resolved and once effective governance is implemented, Diallo posits.

Additionally, the growing need for affordable and sustainable food to accommodate and sustain the global population means that Africa is also likely to benefit from the food-source aspect of the global energy transition, as it has most of the available arable land and has introduced measures for farmers to access and reuse water.

The continent also has higher solar irradiance than other continents; it is, therefore, potentially well positioned to decarbonise food production processes while supplying food locally and internationally.

Africa will, therefore, play an important role in the global energy transition as it can accommodate other countries’ requirements in terms of providing renewable energy for affordable and sustainable food and for natural minerals, such as cobalt and platinum-group metals required to manufacture batteries.

“We are in a state of consolidation where the world should leverage intercontinental cooperation in a sustainable way, and our continent has a lot of resources. There is abundant availability of mineral resources and young talent in Africa which will both be in intense demand to further energise the world,” he declares, citing the example of Morocco having started a project to install solar energy plants to supply electricity to the Netherlands.

Diallo sees a bright future for the African continent, as several countries are investing in renewable-energy projects in remote locations that will benefit the African economies, with renewable energy being sold to international markets, in addition to supplying energy to the local market.

Edited by Nadine James
Features Deputy Editor

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