This paper discusses the synergistic relationship between the African Continental Free Trade Area (AfCFTA) and the African Single Electricity Market (AfSEM).
These important initiatives of the African Union (AU) aim at promoting regional integration and economic growth. While AfCFTA seeks to establish a unified continental market for the free movement of goods, services, and persons, AfSEM focuses on establishing the world’s largest electricity market to provide affordable, reliable, and sustainable energy across Africa. The major findings highlight the critical role played by AfSEM in enabling the AfCFTA’s objectives by tackling Africa’s energy deficit, facilitating cross-border trade, and promoting industrialisation. AfSEM plans to develop energy infrastructure, such as energy interconnectors and large power plants, to reduce energy costs, enhance energy security, and promote sustainable growth. This is also in alignment with AfCFTA’s green energy transition and promotes the creation of jobs, capacity building, and foreign and local investments. The policy recommendations explore the importance of aligning national energy policies with regional energy policies and AfCFTA Protocols, encouraging private-sector participation through financing mechanisms such as green bonds, and investing in digital innovations like smart grids and blockchain. This paper highlights the vitality of strengthening regional energy collaborations and the establishment of a monitoring framework to ensure the effective implementation of both initiatives. Finally, AfSEM is important to bridge the energy infrastructural gap in Africa and enhance the AfCFTA objectives towards sustainable energy trade across Africa.
Synergies and Spillovers between the African Continental Free Trade Area(AfCFTA) and the African Single Electricity Market (AfSEM)
