Strengthened regulation in Africa's electricity sector
Dear Friends and Colleagues,
The Coronavirus pandemic has brought to the limelight the challenges and opportunities that exist in the energy sector. For Africa, this is critical as actors work together to expand energy access to underserved communities. Energy is important to the survival of African countries in both COVID-19 and post-COVID-19 era.
Strengthened regulation underscores efforts to scale up access to energy. With effective regulatory regime in the energy sector, economies can attract private investments and leverage efficiency in the energy sector.
Over the past months, some African countries have taken positive steps to enhance regulations. The Senegalese Ministry of Oil and Energy has decided to exempt equipment for the production of renewable energies such as solar, wind and biogas from value added tax. In Nigeria, there is a one-year deferment of the 35 per cent import adjustment tax (levy) imposed on Fully Built Unit (FBU) electricity meters. Mali has removed taxes on the importation of materials and equipment for the production of renewable energies.
An enabling environment is key to bridging Africa’s energy gap. Countries and private sector actors must work towards this. In our first ‘AEP Knowledge Series’, we explored some of the factors behind current low trade levels and transmission capacity utilization rates in the ECOWAS regional electricity market. These non-infrastructure barriers, generally linked to electricity sector reforms, require policy and regulatory interventions.
To unleash Africa's renewable energy potential, there ought to be an enabling environment that removes barriers to investment. This demands a strong and efficient regulation of the electricity sector.
The Africa Energy Portal, through its data and statistics, is providing the platform to enable countries and other key stakeholders, including academia and private sector actors, to assess, track and implement effective regulatory reforms. We need all hands on deck.
Sincerely,
AEP Editorial Team
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