Africa Competitive Landscape: Slowly Unbundling Its Power Potential


BMI View: The unbundling of state-owned power companies and efforts to liberalise power markets will continue to characterise the competitive landscapes of both Southern and East Africa. While reform will be a protracted process, efforts will gain greater traction as governments look to attract private investment into power infrastructure so as to keep pace with surging demand for electricity - with the renewables segment offering opportunities for private players.

Despite most countries in East and Southern Africa having adopted strategies to reform the power sector over the last two decades, the introduction of competition and broader liberalisation efforts have thus far yielded limited success. Reform is often stifled by opaque policies, an absence of policy continuity and a reluctance to relinquish control of strategic assets in the power sector.

Meanwhile, despite the huge array of opportunities on offer and significant untapped demand for power, many private investors have been deterred by wider political, social and economic instability in Africa. Other factors that have hindered liberalisation efforts include a region-wide failure to embrace tariffs that truly reflect the cost of electricity generation and a failure to establish the regulatory principles that would sustain such tariffs.

Low Electrification Rates
Electrification Rates In Selected African Nations (%)

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Related sectors of this article: Utilities - Power, Power, Regulatory - Power, Tenders - Power
Geography: Africa, Angola, Botswana, Kenya, Mozambique, Namibia, Sudan, South Sudan, Tanzania, Uganda, Zambia, Zimbabwe