What will happen next in Africa’s green economy

Media loves to predict the future – but of course knows no better than anyone else. 

• We won’t play that game – of throwing darts in the dark.

• Much better to look at how existing trends might evolve.

• Most change is gradual rather than out of a clear blue sky.

A. Electric motion takes off on African roads

The EV market achieved a breakthrough in 2023. Several manufacturers opened assembly plants on the continent, bringing down consumer prices. The focus is on buses and electric motorbikes. 

Kenya talks of going from 2,000 electric motorbikes to 200,000 by the end of the year. Along with Rwanda, it also saw the introduction of electric buses on regular public routes. South Africa's electric vehicle (EV) adoption has surged by 127%, and the country is set to produce its first EV in 2026.

This paves the way for rapid expansion. The sector has reached a tipping point. But this does not currently apply to cars or electric bicycles, which remain neglected. 

B. Pain in the carbon markets is not yet over

The setbacks of last year have not run their full course. Several scandals were reported in newspapers, some in Africa, kicking off heated debates that have yet to cool down. Criticism is still getting louder. Watch for mentions of green colonialism and “blood carbon” (akin to blood diamonds).  

The impact on carbon markets will be significant. Trust and credibility suffered a big hit last year that won’t be repaired quickly. By some estimates, deal volume was down by more than 50% for some developers. A recovery is not yet here. And indeed there are problems with monitoring and verification. Still, the carbon markets retain core elite support. John Kerry said at COP28 that carbon markets are needed. 

Further minefields loom in the cookstove sector, which relies heavily on carbon markets, as new (tougher) standards are set. On the plus side, biodiversity markets will likely gain independent standing adjacent to carbon markets. 

C. Hello to realism in green hydrogen, minerals and industrialisation

Last year saw extraordinary growth in African announcements of green industrial projects. With the pipeline of new ventures now somewhat cleared, attention will turn to what’s actually achievable. 

This is no bad thing for the serious players. Robust scrutiny will only strengthen them. South Africa, Morocco and Egypt do have the knowhow to land highly complex projects. 

But the lightweights will be shown up. Mauritania is not the most obvious place to have a green hydrogen hub as announced some months ago.

D. Oldies but goldies: Tired solar and mini-grids are powering up

When lots of new money arrives in a complicated place such as Africa’s green economy, tried and tested solutions get new, even outsized attention. New money is conservative. It’s looking for relatively safe bets. 

This benefits solar and mini-grids. Their tech is mature. Solar in particular has seen many ups and downs over the decades. It appears we’re now looking at a new upswing in Africa alongside mini-grids. 

Cost reductions have helped. Prices at Chinese factory gates keep on tumbling. But a new global climate focus on the continent is the bigger driver. The new money needs to go somewhere… somewhere that’s easy to understand for newcomers.