September 2023

South Africa and China continued to strengthen bilateral relations through the 2023 BRICS Summit. South Africa has welcomed investment in several sectors including trade, aerospace, agriculture and business, with the lion’s share being directed towards energy. South Africa is also ready to seal a deal with China that will assist solar power installers secure access to panels for projects needed to tackle the country’s energy crisis. Simultaneously, South Africa’s Industrial Development Corporation and the Bank of China signed a framework agreement that could unlock a US$519 million funding package over the next five years to support regional projects in energy and other sectors. In addition, China has pledged to donate emergency power equipment worth US$8.6 million, as well as send alternative power supplies to an estimated 500 critical facilities around the country. These developments will advance energy cooperation between the nations while assisting South Africa with its energy crisis.

The African and Asian nations have sought to strengthen bilateral relations through various energy and mining agreements. In early August, an agreement was signed to jointly explore rare earth minerals. This forms part of Japan’s plan to develop supply chains for cobalt and other minerals used in electric vehicle battery manufacturing, in order to be less reliant on Chinese imports. The Japan Organization for Metals and Energy Security (JOGMEC) and Epangelo, Namibia’s state-owned mining company, will lead this partnership. Later on in the month, JOGMEC secured critical mineral agreements with the African countries of Angola, the Democratic Republic of Congo, Madagascar and Zambia, to further mitigate reliance on China and ensure supply for Japan’s high-tech industry. Concurrently, Namibia’s Hyphen Hydrogen Energy signed an MoU with Itochu, a Japanese import/export company, to explore areas for potential collaboration and drive forward the region’s largest green hydrogen project. Following Japan’s lead, the UK also signed mining and energy agreements with Zambia and South Africa, to diversify its supply chains.

The potential for African cannabis continued to grow over July as Ghana introduced new cultivation laws. The country has become the first West African market to legalise the cultivation of cannabis for medical and industrial use – recreational use remains illegal. In a move to boost the sector, Ghana’s Parliament adopted the Narcotics Control Commission (Amendment) Bill 2023, empowering the Minister of Interior to grant licences for cannabis cultivation for certain varieties of hemp cannabis that have a tetrahydrocannabinol content of less than 0.3%. The bill paves the way for the development of a more regulated industry, ensuring that its cultivation and usage adhere to strict guidelines and quality standards. The West African country’s progressive approach mirrors a broader trend in Africa as 11 other countries have made the move to legalise cannabis for medical and scientific purposes – the global cannabis market is projected to grow from US$57 billion in 2023 to US$444 billion by 2030.

Kenya continued to position itself as a leader in the African green transition amid the continent’s first Climate Summit in September. Kenya, alongside the NDC Partnership, a global coalition of countries and institutions collaborating to drive transformational climate action, launched the National Climate Change Action Plan 2023-2027, targeting a 32% reduction in greenhouse gas emissions by 2030. To support this initiative, government pledged to bolster its climate action by implementing low-carbon and efficient transport systems, and construction of Kenya Power’s EcoCloud data centre commenced, benefitting from 953MW of geothermal power generation. Kenya Petroleum Refineries, now under Kenya Pipeline Company ownership, will rehabilitate the defunct refinery into a gas-to-power plant, which will be supplied by natural gas from Tanzania. A further significant initiative to address climate change was the launch of Kenya’s Green Hydrogen Strategy and Roadmap. In partnership with the European Union, the strategy outlines Kenya’s ambitions for green hydrogen, aligning with its overarching climate change goals.