posted by System Administrator on 01/02/07

"The question is: how can the vast potential of biofuels ever be exploited in such a way that African populations themselves benefit most? Many of the top stories on Africa this year, indicate that there are several strategies being set out to turn Africa into a biofuel superpower. Those with a stake in the industry think Africans will become the "Arabs of biofuels".

Independent analysts agree on Africa's potential but also point to a large number of challenges and barriers (earlier post). Our closest 'intellectual ally', professor John Mathews, for his part wrote a strong 'manifesto' on the opportunities and challenges developing countries face in the biofuels race.

South-South, North-South, South-North-South
One of the best options, we think, is for African states to collaborate with experienced partners from the South, who transfer technologies and help create global markets. Brazil, India and China have started doing so in 2006. During the first South America - Africa Summit, held this year in Nigeria, a new development paradigm was discussed in which South-South cooperation and pragmatism go hand in hand. Both continents will join forces so they can throw more weight on the scale of global trade negotiations.

At the Summit, Brazil's president Lula explained that the development of a carbon-neutral energy system was crucial for Africa and that his country will assist partner countries in this matter. Creating favorable biofuel markets for export in Europe and the US is a major goal (earlier post). India for its part pledged to contribute up to US$250 million to West Africa's newly created Biofuels Fund, mainly because the fund will invest most of its money in jatropha, an energy crop with which India has a lot of experience.

This year also saw Senegal offering us a prototypical example of "trilateral" South-South cooperation on biofuels: Brazilian technology and knowledge is combined with the Indian entrepreneurial spirit in Senegal, which offers land, labor and hopes to gain by becoming less oil dependent. Finally, China closed a bilateral agreement on ethanol production with Nigeria and made a first investment. China has a large interest in Nigerian oil, but Africa's largest oil producer is troubled by social conflict and instability. If biofuels investments can bring much needed jobs and help stabilise the volatile oil production zones, then it's worth the money. In short, China pragmatically uses a biofuels investment to ensure its much larger oil investments don't go to waste.

Besides bilateral and multilateral South South cooperation, Brazil is also creating typical South-North-South relations in which the country partners with Europe to kickstart the creation of ethanol markets in Africa. Both the Dutch and the British government have already committed to take this "triangular" route. With their combined strength, they do not shy away from investing in some of Africa's most troubled countries, such as Sudan.

 A considerable amount of direct foreign investment and European development aid went straight into Africa as well, this year. Sweden announced cooperation with Mozambique to develop a sugarcane based ethanol industry supplying both the domestic market as well as exports to Europe, one US firm started a major palm oil based biodiesel venture in post-war Liberia while another one invested in Nigeria's first sugarcane based ethanol plant, whereas Thai entrepreneurs have been invited to invest in Ghana's nascent bioenergy industry.

Perhaps most importantly, 2006 was the year when African countries themselves joined to form a "Green OPEC" of sorts. The PANPP - Pays Africains Non-Producteurs de Pétrole - unites 15 non-oil producing African countries who want to share the burden of the rising energy costs which affect their economies so much. They also aim to deflect some of that burden on their wealthier oil-producing collegues, who they asked to create a fund for the development of a pan-African biofuels industry (earlier post). It will be very interesting to see how these proposals aimed at achieving greater energy independence will work out next year."

Excerpted from BioPact.com "Looking back on Africa 2006" 12.04.06