At a time when the second-hand vehicle market is exploding in Africa, the electrification of transport and the adoption of sustainable practices in the sector are attracting particular interest. Firstly, in view of the continent's low purchasing power, the increase in deaths linked to atmospheric pollution and the lack of infrastructure despite the involvement of the private sector. These are major challenges which, in the absence of a harmonised policy, will leave Africa out of the global business for electric vehicles.
According to the International Organisation of Motor Vehicle Manufacturers (OICA), Africa accounts for just 2% of the world’s cars, with 43 cars per 1,000 inhabitants, compared with 565 in Europe. Less than 1.1 million new vehicles were sold there in 2017. That’s three times fewer than on the Old Continent. This is easy to understand when you consider that sub-Saharan Africa in particular is the number one destination for second-hand vehicles, with Nigeria, Libya, Tanzania, Guinea and Ghana topping the list. According to a report by the United Nations Environment Programme (UNEP) published in 2018, these countries alone accounted for 47% of the 14 million units exported, some of them from Asia. And the most popular used car brands on African roads include Toyota (Japan) and Hyundai (South Korea).
While it is true that this secondary market faces a number of difficulties, including the absence of a distribution network, the lack of local factories, small garages, fake spare parts and customs barriers, it must be acknowledged that Africa’s car fleet has become increasingly outdated over the years. Added to this is the problem of fuel supply, which has become difficult in some countries due to rising prices, itself exacerbated by the energy consequences of the war in Ukraine. Against this backdrop of demographic growth from one sub-region to another, pollution from the automotive sector is making headlines, today more than ever.
Urban mobility and the energy transition
Studies show that the carbon dioxide (CO2) emissions generated by internal combustion vehicles (fuel and diesel) make a major contribution to the deterioration in air quality, particularly in urban areas, as well as posing significant health risks for both drivers and passengers. As a result, much of the world is beginning to agree on the need to decarbonise transport. This expected energy transition is giving food for thought to the concept of “all-electric”, albeit a controversial one.
Indeed, if we take into account the entire life cycle, from manufacture to recycling of these so-called non-polluting vehicles, the carbon footprint is heavy. “To make the battery that supplies the electricity, the metals (cobalt, graphite, manganese, lithium, nickel, etc.) have to be sourced, sometimes from the other side of the world, and extracting them requires a phenomenal amount of energy. Not to mention the water and chemical additives that are extremely harmful to the environment”, explains the French Environment and Energy Management Agency (ADEME) to our colleagues in Le Parisien.
This is not stopping some African countries from following the “all-electric” movement, confident that this is the ideal solution for curbing the environmental impact of transport. In this respect, East Africa appears to be the best pupil at the moment. Between 2017 and 2023, more and more start-ups will be entering the world of fully electric motorbike, tricycle, taxi and, above all, bus assembly. One of these start-ups is BasiGo. Headed by Jit Bhattacharya, the Kenya-based start-up, winner of the 2022 Keeling Curve prize for climate innovation, is taking the electrified transport market by storm in the capital, Nairobi, and is even offering public service operators (PSVs) training in eco-responsible driving through its Advanced Mobility Africa centre.
1,300 kilometres away, Ampersand is making a name for itself with a Pay-as-you-drive application that streamlines the commercial operations of its electric two-wheeler customers in Kigali. According to the company, which claims to have 1,000 motorbikes on the market in Rwanda, this mobile payment solution aims to develop an alternative to the use of combustion-powered vehicles by enabling drivers to save up to 40% on the purchase of their e-motorbikes. According to its directors, this should help to reduce 4.6 million tonnes of CO2 emissions in Rwanda by 2030.
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Alongside these solutions proposed by entrepreneurs, governments are starting to implement large-scale projects to address both the shortage of transport infrastructure and the reduction of the sector’s carbon footprint. This is the case in Senegal, where the people of the capital Dakar are impatiently awaiting the launch of the very first Bus Rapid Transit (BRT). The project is being carried out by the French firm Meridiam, which specialises in the development, financing and management of public infrastructure projects. According to the authorities in the land of Teranga, the initiative will halve journey times for local residents and cut emissions by 59,000 tonnes of CO2 equivalent per year, at a time when the government of this West African country estimates that traffic jams in Dakar cause economic losses of 100 billion CFA francs (150 million euros) per year.
Neighbouring Côte d’Ivoire is planning Abidjan’s first metro line with electric traction, which should be operational by 2024, serving 540,000 people. The construction work is being carried out by the Société de transports abidjanais sur rail (STAR) in partnership with the French multinational Alstom, and Colas Rail, a subsidiary of the French group Bouygues, both of which specialise in railway engineering. The rehabilitation or construction of such modes of transport is envisaged in several African metropolises. However, this transition, which is aimed at decarbonising transport systems, is coming up against a number of challenges linked in part to the lack of capital.
Financing players in Africa
According to a report published in 2022 by the American car manufacturer General Motors (GM) and the British think tank Oxford Business Group (OBG), financing for the sector remains precarious in Africa. For the time being, the few financiers and creditors active on the continent are mainly venture capitalists and development partners. One of the biggest allocations since the start of 2023 has come from Japan. In Egypt, the Japan International Cooperation Agency (JICA) has granted 319 million dollars to finance work on the fourth line of the Cairo metro. Targeting 2 million passengers, the work aims to link Greater Cairo to the south-west of the Egyptian capital through the construction of 16 train stations. The contracting authority for this project is the Egyptian construction company Orascom Construction and Colas Rail. They will install the track systems in partnership with other local civil engineering companies such as Hassan Allam Construction and Arab Contractors Company (Arabco).
For the record, a package of 136 million dollars was pledged jointly by Germany (114 million dollars), Denmark (14 million dollars) and the United Kingdom (5 million dollars) at the 26th United Nations Conference of the Parties on Climate Change (COP26) held in November 2021 in Glasgow, Scotland, to support green mobility in Africa. France is already representing Europe in the race to finance sustainable transport in Africa. The French Treasury and French banks BNP Paribas and Société Générale are rightly financing the Abidjan metro, at a total cost that has yet to be revealed. France is also paying close attention to the carbon market, which can boost the financing of environmentally-friendly mobility.
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Aera, a French trader in carbon credits for Africa, has entered into a partnership with the Swiss foundation myClimate to sell $5 million worth of carbon credits to Mauto Electric Mobility (M Auto). Now known as Spiro, the Indian car manufacturer has also announced that it will put up to 140,000 electric motorbikes on the road and build 3,000 battery exchange stations along the streets of Kampala in Uganda. The $200 million (754.6 billion Ugandan shillings) investment contract has been signed with the local authorities, who see it as a way of creating 9,000 jobs.
At the same time, the African Development Bank (AfDB), through the Sustainable Energy Fund for Africa (SEFA), has granted $1 million to support electric mobility in seven countries, including Nigeria, Rwanda, South Africa and Sierra Leone. In West Africa, the International Finance Corporation (IFC) directly finances private initiatives on inclusive and sustainable mobility.
A few months ago, the private sector financing arm of the World Bank Group pledged $10 million to the young engineers at Gozem to deploy a fleet of 6,000 electric motorbikes in Benin and Togo by 2024. This is considerably more than the $6.6 million that was injected into BasiGo’s capital in the second half of 2022 by the investment companies Keiki Capital, Trucks Venture Capital, Novastar Ventures and mobility54. The latter operates in Africa under the aegis of Toyota Tsusho Corporation and the CFAO group (Corporation For Africa & Overseas).
A similar operation was carried out in the first half of this year by EVTech. The mobility start-up based in the Ivorian town of Grand-Bassam carried out a Series A financing round involving national and international investors. The funds, worth 4.2 billion CFA francs (around 6.4 million euros), will be used to finance and deploy charging stations for electric vehicles, according to its founder Florent Thomas, interviewed by AFRIK21.
Batteries and electric recharging solutions, the impasse
The inadequacy of recharging facilities remains the other major challenge to the expansion of electric mobility in Africa. The oil industries in particular have been quick to take advantage of this situation to establish their corporate social responsibility (CSR) strategies in certain countries. This is the case in Algeria, where the public energy company Sonelgaz and Naftal, the subsidiary of the national company for the research, production, transport, processing and marketing of hydrocarbons (Sonatrach), are currently working together to install 1,000 charging stations for electric vehicles in 58 wilayas, including Sidi Kaci, Zerizer, Ain Assel, El Tarf and Khanguet.
In addition to this North African country, where the transport sector generates 20 million tonnes of CO2 per year according to official figures, such systems are becoming increasingly widespread in Kenya, the African capital of electric mobility. There, the French oil group TotalEnergies has already commissioned three charging stations at its Hurlingham, Dagoretti and Mountain View stations to power the batteries of electric motorbike drivers in Nairobi. Some carmakers are also banking on recharging facilities to optimise their conversion to “all-electric”. For example, the American company Tesla has extended its network of superchargers for electric vehicles (maximum power 150 kW) between 2021 and 2022, notably in Agadir, Marrakech, Tangiers, Casablanca and Rabat in Morocco. But the million-dollar question is whether Elon Musk’s car brand is on the way to establishing a lasting presence on the continent, following its successful conquest of North America, Europe and Australia.
In the meantime, the other technical aspect holding back the decarbonisation of mobility in Africa is the delay in the local manufacture of electric batteries. A prospect which, in the view of some players, should gradually confirm the continent’s sovereignty in the global industrial game. Incidentally, the State of Mozambique and Japan are in talks about the possible launch of a factory in Cabo Delgado. Cabo Delgado is a Mozambican province rich in graphite, an essential raw material for lithium-ion batteries used in electric vehicles. This is not the first cooperation of its kind, since a $39 million agreement already exists between Zambia and the Democratic Republic of Congo (DRC) as part of the project to create a joint value chain for the electric mobility and clean energy sectors. The two border states have their sights set on developing their cobalt reserves, a key metal in the energy transition because of its high energy storage capacity.
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In the meantime, Morocco is set to inaugurate the first facility of its kind on the continent, in the Bouknadel district of Rabat. At a total cost of 65 billion dirhams (5.9 billion euros), the future plant operated by the Chinese company Gotion High Tech will have a production capacity of up to 100 GWh/year and will also create 25,000 jobs, according to the Moroccan Investment and Export Development Agency (Amdie). However, the slowness with which such projects are being implemented is showing up day by day the scepticism of certain analysts who are convinced that Africa’s energy transition, including in the transport sector, depends exclusively on Asia and Europe.
It is therefore becoming urgent for African public authorities to put in place regulatory frameworks for electric mobility.
What about institutional measures?
Between the introduction of tax incentives to encourage the import of electric vehicles and the creation of national committees dedicated to green mobility, African states are taking action. Morocco, which boasts one of the most diversified electricity mixes on the continent, with a high proportion of renewable energies, has just set up the Association professionnelle intersectorielle pour la mobilité électrique (Apime). The new body, backed by the Fédération nationale de l’électricité, de l’électronique et des énergies renouvelables (FENELEC), is also one of the key elements of the National Plan for Electric Mobility drawn up by the Kingdom of Morocco’s National Water and Electricity Company (ONEE). This plan, supported by the Organisation for Economic Co-operation and Development (OECD) based in Paris, France, aims to reduce the 40% of CO₂ emissions generated by the transport sector in Morocco.
Togo and more recently Rwanda have decided to exempt imports of electric vehicles from customs duties. Tunisia, for its part, has reduced by 17% the tax on imports of “recharging equipment” for these low-polluting vehicles. The measure came into force on 1 January 2023. In Kenya, parliamentarians are expected to vote between now and 2024 on whether to approve identical measures to complement the National Plan for Electric Mobility that the Kenyan authorities are preparing. The aim is to set up a “clean and green transport system” in the 47 counties of this country in the Horn of Africa.
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Even if these decisions remain political for the time being, it’s already a big step forward, because France, considered to be one of today’s models, has its own benchmark in the Mobility Orientation Law (LOM), which contributes to its objective of being carbon neutral by 2050. This is only to be expected, given that car use by the French alone accounts for 16% of their total emissions, according to the European country’s Annual Transport Report for 2020.
Benoit-Ivan Wansi
