Energy in the African contextCultural and institutional challenges

Otto Kroesen

J.O. (Otto) KroesenEthics and intercultural internships

TU Delft / TPMBuilding 31Jaffalaan 5, Room B.3.3302628 BX DelftT +31 (0)15 27 85262 M +31 (0)653796968Sk otto.kroesenE j.o.kroesen@tudelft.nl

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Universalistic state and open civil society

• Three demands to the state: it should be strong, universalistic (equitable), and accountable (Fukuyama: The Origin of Political Order).

• This is only possible if there is an independent public sphere and an open civil society apart from, cooperating with, also opposing the state.

• Constant realignment of organizations and individuals

• Co-opetition: cooperation and competition• These Western requirements are not fulfilled

automatically in the developing world

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Consequences for energy introduction• Without equal treatment by the state one needs relationships for

licenses etc.• Collectivist ethics (closed groups orientation) causes lack of trust

and lack of cooperation• What if a collectivist group takes control over the state with

exclusion of other collectivist groups?• Bad effects on customer relationships• Bad effects on chain management and marketing (lack of trust)• Bad effects on sectoral regulation (easy access for flawed

products)

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Consequences for energy introduction

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• Strategic niche management is new and difficult, lack of trust

• Networks are not coming off the ground because there is no developed civil society.

• Regulation by the government is dependent on relations between some big players and politicians

• Customers find their way to companies via personal relationships

• No long-term customer relationship business strategies

• Research institutions and business separated worlds

Economic culture: Porter

“The productivity paradigm gives rise to a whole series of supportive attitudes and values: innovation is good, competition is good, accountability is good, high regulatory standards are good, investment in capabilities in technology is a necessity, employees are assets, membership in a cluster is a competitive advantage, collaboration with suppliers and customers is beneficial, connectivity and networks are essential, education and skills are essential to support more productive work and wages should not rise unless productivity rises, among others. These can be contrasted with unproductive attitudes and values: monopoly is good, power determines rewards, rigid hierarchy is needed to maintain control, and self-contained family relationships should determine partnership.”

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Entrepreneurship

Entrepreneurship takes a certain degree of individualism, an open attitude towards the future (no uncertainty avoidance), labor and effort to be valued instead of status on the basis of position, sequential time management, internalism and initiative, being a turning point of change.

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Generalized view of African culture

• Too much hierarchy (power distance)• Too little egalitarianism (it is about mutual

penetration of both)• Too much collectivism (and therefore

traditionalism and therefore uncertainty avoidance)

• Too little initiative (it is about mutal penetration of belongingness and novelty)

• How to make progress?7

The detrimental effects of neoliberal thought – social entrepreneurship required• Neoliberalism promotes competitive self-interest within

the regulatory framework of a universalistic state creating an equal level playing field. By some invisible hand this would lead to common wealth.

• Africa doesn’t much apply neoliberal economics, but the neoliberal moral is deeply detrimental, because powerful players feel justified to care only for their self interest, while the Western conditions of a strong state and equal level playing field are not in place.

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A small inventory of cultural values1. Power distance versus egalitarian relationships2. Collectivism versus individualism3. Masculine versus feminine4. Uncertainty avoidance5. Universalism versus particularism6. Specific over against diffuse relationships7. Neutral versus affective behaviour8. Status by achievement or by position9. Synchronic or sequential time management10. Internalism (or voluntarism) versus externalism (fatalism, traditionalism)11. Civil society: open association of individuals and groups apart from tribal/family loyalties and state authorities.

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Reinforced by institutional hurdles

• Since the upfront cost of energy systems is high, it takes a lot of investment to get something off the ground.

• It is difficult to get loans, since many companies or future owners of the energy systems do not have enough collateral.

• Add the trust problem: customers do not have much trust in companies (it is normal to be cheated) and companies do not put much effort in building up trust and confidence (often bad materials, bad customer support).

• The consequence of all this is that there is only a market for some rich people who can afford and use the systems to counter power blackouts etc., or else there is a market for very cheap stuff, lamps etc. mostly from India or China.

• Challenge 1: bridge the gap

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Energy for productive use• Energy is basic for producing anything, but customers do

not buy an energy system without having an idea of how it can be earned back. Actually that means that if you want to sell energy, you have to sell ideas about productive use in the same bargain.

• Schemes for productive use for energy in Africa are necessary, targeting as customers those below the few rich and above very many poor, those people who can afford some thousand euro for an energy system, but who can only afford it if they can produce something with it. The central question is: what could they produce with it?

• One such idea to be explored: irrigation pump powered by solar energy, transportable design, which can be taken from farmer to farmer.

• Challenge 2: Productive use: Could you come up with more of such ideas?

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Energy for productive use

Next it needs to be taken into account that standalone solutions are a good start, but not the real solution. Take cooling systems: if a farmer has a refrigerator he can keep his vegetables or milk cool and bring them to the city the next day. But there may not be much gain in this if there is not a cooling system in the city as well. (And again careful and disciplined handling of the vegetables, packing, transport etc.).

Can you figure out such chain

solutions and at the same time

solve the managerial issue of

large-scale cooperation (trust!)?

Challenge 3: larger chains

Maybe an electronic tracking system for products through the whole chain to monitor and guarantee quality?

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Energy for smallholder farmers

• An important question is how an energy system can become part of a strategy for growth of smallholder farmers. There are many of them, but if they want to enlarge the production, they do not start with energy of course. They will have to start with better seeds, fertilizers, water provisions, but if they do so, sooner or later they will need energy, for processing their produce (making flour, juice etc.) and other things.

• That means that if you want to solve the energy problem you have to solve a whole bunch of other problems as well before you really get to the energy issue. (The situation is not that different from the West. All companies need energy, but only in an instrumental way.)

Can you come up with energy ideas for smallholder farmers for productive use?

Challenge 4: Smallholder farmers

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