PARTNER-ATLAS

SOUTH AFRICA

as a partner for securing essential natural resources and protecting the climate

01 — The key questions for the Partner-Atlas

RELEVANCE: What relevance does South Africa have for Germany with regards to "securing essential natural resources and protecting the climate"?

The world needs Africa in order to stop climate change, EU Commission President Ursula von der Leyen emphasised during the EU-Africa summit in early 2022. South Africa, the continent’s most developed economy, is pursuing ambitious goals in this field, similar to what is being debated in Germany. Examples include the reduction of CO2 emissions and minimizing the enormous dependence on coal. The role that the various players in South African politics who could veto these efforts will play is hard to assess, however.

Restructuring the energy supply in Africa, whose population is growing rapidly, is seen as one of the major challenges in the global fight against climate change. South Africa is one of the 15 largest CO2 emitters in the world and produces the highest emissions per capita in Africa. However, South Africa has set itself ambitious goals as stipulated in the Integrated Resource Plan (IRP), which came into force in October 2019. The share of renewable energies is to be increased from 3 to 25 percent by 2030, and 35 gigawatts of the current 42 gigawatts of coal-based electricity is to be redistributed to other energy sources by 2050. The latter target, however, has the potential for causing quite some turmoil for the ruling African National Congress (ANC) in domestic politics. The plan‘s implementation, therefore, needs to be evaluated critically, irrespective of the consequences of Covid for South Africa, which will probably have a negative impact on these ambitious projects. Since July 2019, a carbon tax has been in effect, which was raised to the equivalent of 9 US dollars per ton of CO2 in February 2022, the first such increase. Further increases are planned for the next few years. However, there are still various exemptions, limiting the effectiveness of the tax.

South Africa is also one of the most important exporters of metals and minerals and is the world’s number one producer of platinum and chromium. . As these natural resources are increasingly needed for e-mobility, the entire region of southern Africa will gain geopolitical relevance in the coming years. Water insecurity, on the other hand, is an issue that has not received much political attention, but must not be forgotten.

WILLINGNESS: To what extent is South Africa willing to work with Germany in realising this interest?

South Africa has demonstrated a high level of willingness to cooperate with Germany. Numerous cooperation projects in the fields of renewable energy, energy transition and climate policy have been initiated. In addition, political relations between both countries have been good since the end of apartheid and the subsequent adoption of one of the most modern and liberal constitutions in the world. South Africa’s current political commitment to expand the use of renewable energies presents an opportunity for Germany and the German economy to intensify cooperation.

At a time when multilateral organisations and rules are questioned, South Africa can be regarded as a reliable partner for Germany in certain core areas – even if this is occasionally undermined by an ideologically driven loyalty to old alliance partners who supported the ANC liberation struggle. Since the Zuma era ended and Ramaphosa took over the presidency, South Africa has increasingly pursued a foreign policy that is oriented towards partnership with the West, without neglecting a partnership with China that is also growing stronger. South Africa is a member of the German Foreign Office´s Alliance for Multilateralism initiated in late 2019.

STATUS QUO: How close is Germany and South Africa's current cooperation in this area?

The African continent offers huge opportunities for investments in renewable energies. Cooperation between Germany and South Africa is already quite close in this area and is supported mainly by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the German Chamber of Commerce Abroad (AHK) and the Kreditanstalt für Wiederaufbau (KfW). A project funded by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports South Africa´s climate policy, focusing on the development of a national climate policy and the strengthening of South Africa’s role in international climate negotiations, which also promotes Germany’s strategic international interests and is thus very welcome. A project funded by the Federal Ministry of Economic Cooperation and Development (BMZ) also promotes renewable energies and energy efficiency. The Federal Ministry for Economic Affairs and Climate Action (BMWK) has also been active in the German-South African Energy Partnership since 2013. In late 2021, South Africa concluded an ambitious and long-term partnership for an equitable energy transition with Germany and other partners. The goal of this agreement is to accelerate the de-carbonisation of the South African economy and, at the same time, to support an inclusive transition of the South African coal-mining sector. In addition, cooperation between Germany and South Africa on developing hydrogen and fuel technologies has gained importance recently. South Africa could play a key role in the production of green hydrogen thanks to its enormous renewable energy resources and its good research and technology infrastructure, compared to other African countries.

It remains to be seen, however, how South Africa will implement its ambitious strategies in practical terms. In the past, many progressive legislative initiatives were either implemented very slowly by the ANC government or not at all. In this context, the dwindling influence of the reform-oriented forces in the ANC must be continuously re-assessed and analysed against the backdrop of the country’s numerous veto players. Even after President Ramaphosa has taken office, the progressive forces in the ANC still do not have a secure power base.

A similar uncertainty revolves around the medium to long-term impact of the Covid-19 crisis on the plans for restructuring the energy supply in South Africa, which have been initiated. Shortly after the outbreak of the pandemic and the drastically reduced energy demand that followed, private providers of renewable energies were barred from selling their previously guaranteed power volumes. The national public power supplier, Eskom, justifies this by invoking force majeure, and yet continues to source energy from its own coal-fired power plants. Although energy demand will rise again in the short term, this situation has led to a loss of confidence among private utilities which could have a negative impact on the future investment climate.

POTENTIAL: What is the potential for strengthening the partnership between Germany and South Africa in this area?

There is potential on both sides for a further strengthening of the partnership. Due to South Africa‘s economic relevance not only for the southern African region, but also as an important trading partner for Germany, the energy transition offers great potential for German companies: Germany is South Africa’s third most important trading partner after China and the US. German companies hold a leading position in the field of renewable energy: more than 20 already have branch offices in South Africa, hoping for a progressive liberalisation and decentralisation of the electricity market. As a matter of fact, South Africa is among a handful of countries on the continent that organise tenders for renewable energy projects in a competitive and transparent procedure. The Renewable Energy Independent Power Producer Procurement (REIPP) is an important tool for expanding the share of renewable energies in the country.

It will be interesting to see if there is also potential for German-South African cooperation in promoting renewable energies beyond South Africa. In economic terms, South Africa is the gateway to Africa. Many South African entrepreneurs are active across the continent and possess the knowledge that is necessary for achieving business success in Africa. Being the only African nation within the G20, South Africa can act as a channel for private-sector climate investments in Africa. The predicted doubling of Africa’s population by 2050 and the urbanisation fueled by it create great potential for new sales markets. Cooperation with Africa is mentioned as part of the European Commission’s European Green Deal, which offers additional opportunities to focus on South Africa.

POLICY RECOMMENDATION: What in German foreign policy has to change in order to fully exploit this potential?

Based on the positive partnership, Germany should make sure to engage in an honest and constructive dialogue with South Africa and insist on addressing the lack of transparency and corruption in the energy sector. Providing financial and technical support for the energy transition should not be the only engagement. It should be combined with demanding appropriate political reforms that are not just adopted but also implemented.

New energy models are becoming increasingly competitive and, due to weaknesses in the public sector, market economy-based concepts from the private sector are gaining relevance. Germany can support South Africa politically and technically, based on its expertise in energy matters, in order to trigger similar developments in the region. Economic access to Chinese capital, expertise and investment plays a role in South Africa, but is not as relevant as in other countries on the African continent. Against this background, Germany should step up its efforts to convince South Africa of the advantages of new alliances and partnerships, ideally based on shared values.

Anja Berretta heads the KAS Regional Programme for Energy Security and Climate Change in Sub-Saharan Africa.
Dr. Tilmann Feltes heads the KAS Office in Tanzania and was policy advisor for Southern Africa in the Department of Sub-Saharan Africa.

Last update: 16 May 2022

SOUTH AFRICA

  • Population: 59,308,690
  • Capital: Bloemfontain, Capetown, Pretoria
  • Interest: Securing Essential Natural Resources and Protecting the Climate
  • Region: Sub-Saharan Africa

04 — The region

Sub-Saharan Africa

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CÔTE D IVOIRE

Côte d‘Ivoire is an anchor of political and economic stability in West Africa. Whereas there were three military coups in the neighbouring countries of Guinea, Mali and Burkina Faso in an eight-month period beginning in May 2021, the situation in Côte d’Ivoire remained calm. The commodity-rich hub on the Gulf of Guinea has recorded consistently strong economic growth since 2012, regularly exceeding 6 percent, well above the population growth rate, which is also high at about 2.5 percent per annum. Its population grew from 16.5 million in 2000, to 26 million 20 years later.

  • Population: 27.712.600
  • Capital: Yamoussoukro
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DR CONGO

The Democratic Republic of Congo (DR Congo) has various resources that play, or will play, a major part in limiting global warming, in addition to helping with the global energy and mobility transition. The world’s second largest area of rainforest – about 100 million hectares – is located in DR Congo. Tropical ecosystems such as the Congolese rainforest are capable of storing CO2, and thus play an important part in global climate protection and in limiting global warming. At a micro level, forest areas can also reduce the occurrence of extreme weather events such as heat or intense rain.

  • Population: 95.403.294
  • Capital: Kinshasa
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MALAWI

Malawi has shown that it can serve as an example of a functioning democracy in Africa and a partner for Germany in defending a democratic, values-based world order. The country made history in 2020 when the May 2019 elections, which had been overshadowed by irregularities, were successfully disputed by the opposition. New, free and fair elections ordered by the court were held under Covid-19 conditions within 150 days. An alliance of opposition parties, the Tonse Alliance, won the elections with an absolute majority. Since then, new President Lazarus Chakwera has pursued the objective of suppressing widespread corruption and putting the country onto a successful economic footing.

  • Population: 20.150.838
  • Capital: Lilongwe
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CÔTE D IVOIRE

As part of its security policy commitment in West Africa, German foreign policy has focused for many years on Mali and its neighbouring countries, also known as the Sahel Region, whose stability is directly relevant to peace and security in this country on account of its close proximity to Europe. Nevertheless, we need to broaden our geographical horizons, since Jihadism, ethnic conflicts and organised crime are becoming more widespread throughout West Africa. This poses a threat to political and economic stability among the southern neighbours of the Sahel countries in particular, such as Côte d’Ivoire. Côte d’Ivoire is an important partner for Germany in the area of trade and development policy cooperation in West Africa. One area where this finds expression is in the Reform Partnership which Germany has maintained with the country since 2017.

  • Population: 27.712.600
  • Capital: Yamoussoukro
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SOUTH AFRICA

The world needs Africa in order to stop climate change, EU Commission President Ursula von der Leyen emphasised during the EU-Africa summit in early 2022. South Africa, the continent’s most developed economy, is pursuing ambitious goals in this field, similar to what is being debated in Germany. Examples include the reduction of CO2 emissions and minimizing the enormous dependence on coal. The role that the various players in South African politics who could veto these efforts will play is hard to assess, however.

 

  • Population: 59,308,690
  • Capital: Bloemfontain, Capetown, Pretoria
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KENYA

Kenya is one of the most stable countries in East Africa and has an internationally oriented economy. With consistently strong economic growth in the twelve years before the Covid crisis and a GDP of more than 100 billion US dollars (2020), Kenya has the largest economy in East Africa and is a growth engine for the region. Thanks to the ports of Mombasa and Lamu as well as the airport in Nairobi, the country is an important regional hub for trade,finance and the transport of humanitarian aid in the region. Many international companies and organisations have chosen Kenya as the seat of their (East) Africa branches.

  • Population: 53,771,296
  • Capital: Nairobi
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GHANA

Despite its relatively small population of approximately 28 million inhabitants, Ghana is growing in relevance for Germany. This is evident not least of all from the fact that Ghana has been included in the Compact with Africa project since 2017 and became one of Germany’s reform partner countries in the same year. Ghana’s willingness to accept reforms in the economic and fiscal policy sector, along with its framework, which is relatively stable and reliable compared to many other Sub-Saharan African countries, made Ghana an interesting partner for the G20, and especially for Germany (as a reform partnership).

  • Population: 31,072,940
  • Capital: Accra
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NIGERIA

With a population of around 216 million, Nigeria is not only the most populous country in Africa, but it has also been the continent’s largest economy for some years now. The country is rich in oil and gas and is one of the largest oil exporters in the world. Nonetheless, Nigeria faces immense security and economic problems, which have worsened as a result of the Covid pandemic and could further destabilise the entire region in the medium to long term, posing major challenges for Europe. This applies both to the European interest in supporting the Sahel states in their fight against terrorism and to stopping irregular migration from Africa.

  • Population: 206,139,589
  • Capital: Abuja
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NIGER

The unstable security situation throughout the Sahel region reveals the weakness of state authorities in the region. Niger’s security forces are also struggling to exercise effective control of the country. Several terrorist groups, such as the Islamic State or Boko Haram, regularly attack military bases and also civilians. Niger is also one of the poorest countries in the world with one of the highest rates of population growth (on an average, women have 7 children) and is wrestling with numerous governance problems, including regular accusations of corruption against government representatives or officials. There were several demonstrations against the rampant corruption and bad governance in the past. However, in the 2020/21 elections, Niger for the first time successfully managed the transfer of power from one elected President to another, Mohamed Bazoum. In the past, the country had suffered numerous military coups.

  • Population: 24,206,644
  • Capital: Niamey
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