AFRICA: mobility and decarbonisation, a difficult equation ?
Based on data from the International Organisation of Motor Vehicle Manufacturers (OICA), Africa only possesses 2% of the global automobile market. This translates to a mere 43 cars for every 1,000 people, in contrast to Europe's 565 cars per 1,000 individuals. In 2017, the number of new vehicles sold in Africa amounted to less than 1.1 million, which is three times fewer than in Europe. This discrepancy can be easily understood as sub-Saharan Africa, in particular, serves as the primary destination for second-hand vehicles. Countries such as Nigeria, Libya, Tanzania, Guinea, and Ghana are at the top of this list. The United Nations Environment Programme (UNEP) released a report in 2018 indicating that these nations alone accounted for 47% of the 14 million exported units, some of which originated from Asia. Popular used car brands found on African roads include Toyota from Japan and Hyundai from South Korea.
Although it is a fact that the secondary market in Africa's car industry is encountering numerous obstacles such as the lack of a distribution system, absence of local production facilities, small independent repair shops, counterfeit spare parts, and trade barriers; we must recognize that the car fleet in Africa has become outdated as time passes. Furthermore, the issue of fuel availability has become problematic in certain countries due to increasing prices, which have been worsened by the energy implications of the conflict in Ukraine. In light of the ongoing demographic expansion from one sub-region to another, the environmental pollution caused by the automotive sector is garnering significant attention, particularly in today's world.
City Life And The Shift To Clean Energy
Research indicates that the release of carbon dioxide (CO2) from cars and trucks that run on fuel and diesel is a leading cause of the declining air quality, primarily in cities. Moreover, this emission also poses considerable health hazards to both drivers and passengers. Consequently, there is a growing consensus worldwide regarding the importance of eliminating carbon emissions from transportation. This anticipated shift towards cleaner energy sources is causing people to reconsider the notion of "all-electric" vehicles, although it remains a subject of debate.
In fact, when we consider the whole life cycle, starting from the production and ending with the recycling of these supposedly eco-friendly vehicles, their carbon footprint is significant. According to the French Environment and Energy Management Agency (ADEME), the process of making the battery that provides electricity for these vehicles involves sourcing metals like cobalt, graphite, manganese, lithium, nickel, and others, which can sometimes come from distant places in the world. Extracting these metals requires an enormous amount of energy and also contributes to environmental harm due to the use of harmful chemical additives and water. These points were explained to our colleagues at Le Parisien by ADEME.
Despite some African countries not getting on board with the "all-electric" movement, there are still others who believe it is the perfect solution for reducing the environmental impact of transportation. East Africa seems to be leading the way in this regard. From 2017 to 2023, a growing number of start-ups will enter the market for electric motorcycles, tricycles, taxis, and especially buses. One of these start-ups is BasiGo, led by Jit Bhattacharya and based in Kenya. BasiGo recently won the 2022 Keeling Curve prize for climate innovation. They are making waves in the electric transport market in Nairobi and are even providing training in eco-friendly driving for public service operators through their Advanced Mobility Africa center.
A company called Ampersand, located 1,300 kilometres away, is gaining recognition for its innovative Pay-as-you-drive app. This app simplifies the commercial operations of electric motorbike users in Kigali. The company claims to have around 1,000 motorbikes available for purchase in Rwanda. With their mobile payment solution, they aim to provide an alternative to using vehicles that run on fossil fuels. By using this app, drivers can save up to 40% on the cost of their electric motorbikes. The directors of Ampersand believe that this will contribute to a reduction of 4.6 million tonnes of CO2 emissions in Rwanda by 2030.
In addition to the solutions suggested by entrepreneurs, governments are now starting to implement large-scale initiatives to tackle the lack of transportation infrastructure and reduce the environmental impact of the sector. One such example is in Senegal, where the people of Dakar, the capital city, eagerly await the introduction of the first-ever Bus Rapid Transit (BRT) system. The project is being undertaken by the French company Meridiam, which specializes in the development, financing, and management of public infrastructure projects. According to the authorities in Senegal, this initiative will reduce travel times by half for local residents and decrease emissions by 59,000 tons of CO2 equivalent annually. This comes at a critical time, as the government of this West African country estimates that traffic congestion in Dakar results in economic losses of 100 billion CFA francs (equivalent to 150 million euros) each year.
Côte d'Ivoire's neighboring country, the Republic of Côte d'Ivoire, has plans to build the first metro line in Abidjan using electric power. This metro line is expected to become operational by 2024 and will cater to a population of 540,000 individuals. The construction work for this project is being conducted by the Société de transports abidjanais sur rail (STAR) in collaboration with Alstom, a French multinational company specializing in railway engineering, and Colas Rail, a subsidiary of Bouygues, a French conglomerate. Similar projects involving the rehabilitation or establishment of transportation systems are being considered in various African cities. However, the successful implementation of these projects, aimed at reducing carbon emissions from transportation, is facing multiple challenges, primarily due to financial constraints.
Funding African Athletes
A recent report released by General Motors (GM), an American car manufacturer, and Oxford Business Group (OBG), a British think tank, has highlighted the financial challenges faced by the automotive sector in Africa. Currently, there are only a few investors and lenders operating in the continent, with venture capitalists and development partners being the primary sources of funding. Japan has emerged as one of the major contributors in this regard, with the Japan International Cooperation Agency (JICA) providing a substantial sum of 319 million dollars to support the construction of the fourth line of the Cairo metro in Egypt. This project aims to connect Greater Cairo with the south-western region of the Egyptian capital through the establishment of 16 train stations, with a target of serving 2 million passengers. The responsibility for overseeing this project lies with the Egyptian construction firm, Orascom Construction, and Colas Rail, who will be partnering with local civil engineering companies such as Hassan Allam Construction and Arab Contractors Company (Arabco) for the installation of the necessary track systems.
Just to clarify, the countries of Germany, Denmark, and the United Kingdom collectively pledged a sum of 136 million dollars at the recent 26th United Nations Conference of the Parties on Climate Change (COP26) in Glasgow, Scotland. This funding will be directed towards supporting eco-friendly transportation initiatives in Africa. It's worth mentioning that France is already leading the way in Europe when it comes to financing sustainable transport projects on the African continent. The French Treasury, along with BNP Paribas and Société Générale banks, are actively involved in financing the Abidjan metro, although the exact cost has not been disclosed yet. France is also closely monitoring the carbon market as it has the potential to further boost the financing of environmentally conscious mobility efforts.
Aera, a carbon credits trader from France who focuses on Africa, has formed a partnership with the Swiss foundation myClimate to sell carbon credits worth $5 million to Mauto Electric Mobility (M Auto). Spiro, the car manufacturer from India, which was previously known as M Auto, has also declared its plans to introduce up to 140,000 electric motorbikes on the roads and construct 3,000 battery exchange stations in the streets of Kampala, Uganda. The investment contract, valued at $200 million (equivalent to 754.6 billion Ugandan shillings), has been officially signed with the local authorities who view it as a means of generating 9,000 job opportunities.
Meanwhile, the African Development Bank (AfDB), by means of the Sustainable Energy Fund for Africa (SEFA), has provided a financial aid of $1 million to assist in the advancement of electric transportation in seven nations such as Nigeria, Rwanda, South Africa, and Sierra Leone. In the Western parts of Africa, the International Finance Corporation (IFC) actively funds private endeavors that focus on all-inclusive and sustainable mobility.
A couple of months ago, the part of the World Bank Group that provides funding to private companies agreed to give Gozem, a group of young engineers, $10 million. The money is meant to help them bring 6,000 electric motorbikes to Benin and Togo by 2024. This is a lot more money than the $6.6 million that BasiGo received in the second half of 2022 from investment companies Keiki Capital, Trucks Venture Capital, Novastar Ventures, and mobility54. The latter works in Africa under the guidance of Toyota Tsusho Corporation and the CFAO group (Corporation For Africa & Overseas).
EVTech, a mobility start-up located in Grand-Bassam, Ivory Coast, executed a comparable endeavor earlier this year. They successfully organized a financing round called Series A, which entailed participation from both local and international investors. The total amount raised during this round was approximately 4.2 billion CFA francs, equivalent to roughly 6.4 million euros. The primary objective behind securing these funds, as stated by Florent Thomas, the founder of EVTech, is to establish and implement charging stations for electric vehicles.
The Battery Dilemma: Charging Solutions
The lack of sufficient charging infrastructure remains a major obstacle to the growth of electric transportation in Africa. The oil industries, in particular, have been quick to capitalize on this situation by implementing their corporate social responsibility (CSR) strategies in certain countries. This is evident in Algeria, where the state-owned energy company Sonelgaz and its subsidiary Naftal, which specializes in the research, production, transport, processing, and marketing of hydrocarbons, are currently collaborating to establish 1,000 electric vehicle charging stations across 58 regions, including Sidi Kaci, Zerizer, Ain Assel, El Tarf, and Khanguet.
Besides this North African nation, where the transportation industry produces 20 million tonnes of CO2 annually based on official data, these systems are becoming more prevalent in Kenya, the leading hub for electric mobility in Africa. In Nairobi, the French oil company TotalEnergies has already installed three charging stations at their Hurlingham, Dagoretti, and Mountain View stations to charge the batteries of electric motorcycle riders. Some automakers are also relying on charging infrastructure to facilitate their transition to "all-electric" vehicles. For instance, the American firm Tesla has expanded its network of superchargers for electric cars (with a maximum power of 150 kW) from 2021 to 2022, particularly in Agadir, Marrakech, Tangiers, Casablanca, and Rabat in Morocco. However, the crucial question remains whether Elon Musk's automotive brand will establish a lasting presence on the continent, similar to its successful conquests in North America, Europe, and Australia.
Meanwhile, another technical obstacle that is slowing down the move towards decarbonisation of transportation in Africa is the delay in producing electric batteries locally. Some experts believe that this development would establish the continent's independence in the global industrial sector. By the way, Mozambique and Japan are currently in discussions about the potential establishment of a factory in Cabo Delgado. Cabo Delgado, a province in Mozambique, is rich in graphite, a crucial raw material for lithium-ion batteries used in electric vehicles. This collaboration is not the first of its kind, as there is already a $39 million partnership between Zambia and the Democratic Republic of Congo (DRC) aimed at creating a joint value chain for the electric mobility and clean energy industries. Both neighboring states are focused on developing their cobalt reserves, an important metal in the transition to clean energy due to its ability to store large amounts of energy.
Meanwhile, Morocco is about to open the first facility of its kind on the continent, located in the Bouknadel district of Rabat. The future plant, which will be managed by the Chinese company Gotion High Tech, will have a production capacity of up to 100 GWh/year and will cost a total of 65 billion dirhams (5.9 billion euros). Additionally, according to the Moroccan Investment and Export Development Agency (Amdie), it will also create 25,000 jobs. However, the slow progress of such projects is increasing the doubt of certain analysts who believe that Africa's energy transition, particularly in the transportation sector, relies solely on Asia and Europe.
As a result, African governmental bodies need to swiftly establish rules and regulations regarding electric transportation.
Institutions: What Measures?
African countries are taking steps to promote green mobility and electric vehicles through the implementation of tax incentives and the formation of national committees. Morocco, known for its diverse electricity sources and high reliance on renewable energy, has recently established the Apime, an intersectoral professional association for electric mobility. Supported by the FENELEC, the Apime is a crucial component of the National Plan for Electric Mobility initiated by Morocco's ONEE. This plan, with the support of the OECD, aims to reduce the transport sector's contribution of 40% of CO₂ emissions in Morocco.
Togo and Rwanda have recently made the decision to remove customs duties on imported electric vehicles. In addition, Tunisia has decreased the tax on importing "recharging equipment" for these eco-friendly vehicles by 17%. This change went into effect on January 1, 2023. In Kenya, lawmakers are expected to vote on similar measures to support the National Plan for Electric Mobility, which is currently being developed by the government. The goal is to establish an environmentally friendly transportation system in all 47 counties of Kenya, located in the Horn of Africa.
Although these choices currently retain a political nature, they signify a significant advancement. France, regarded as a prominent example in today's world, has established its own standard through the Mobility Orientation Law (LOM) to aid in achieving its goal of carbon neutrality by 2050. This is not surprising, considering that the utilization of automobiles by the French population alone is responsible for 16% of the country's overall emissions, as indicated in the European nation's Annual Transport Report for 2020.
