A series of research reports published by the Institute for Economic Justice and partners have identified significant challenges facing the renewable energy sectors in South Africa, Ghana, and Kenya. Despite growing demand for renewable energy, the sectors in these countries are being held back by unstable demand, limited localisation enforcement, deficits in decent job creation, and persistent gender biases. The reports, which formed part of a four-year, three-country study, highlight the need for more effective policies and implementation to support the growth of the renewable energy industry.
The nature of demand has been identified as one of the biggest obstacles to the growth of the renewable energy sector in the three countries. Public procurement has played a central role in stimulating the sector through programmes such as the Renewable Energy Independent Power Producer Procurement Programme in South Africa, the Energy Act of 2019 in Kenya, and Ghana's 2021 National Energy Policy. These programmes have led to substantial growth in capacity, with South Africa reaching over 7GW, Ghana 5.3GW, and Kenya 2.6GW. However, intermittent procurement cycles have created uncertainty for investment, expansion, and worker retention.
Localisation efforts in the three countries have been hindered by imports of renewable energy technologies, which have increased substantially. Established manufacturing hubs, particularly China, benefit from mature value chains, large-scale production, and extensive supplier networks. In contrast, local manufacturers in South Africa, Ghana, and Kenya face higher production costs and intense competition. Local content policies, which require a proportion of certain products to be sourced from local producers, have been implemented but have suffered from implementation challenges.
Weaknesses in monitoring and enforcement frameworks, capacities, and capabilities, as well as legislative gaps, have converged to make local content policies ineffective at boosting demand for locally produced products. Tariff misclassification has also been identified as a major issue, with "staged consignment" in South Africa leading to large equipment being imported as components using component tariffs that attract lower duties. In Ghana, a mismatch in the incentive structure for the solar PV segment has hindered the development of a domestic manufacturing base.
Employment outcomes across the renewable energy production network reveal the limitations of current localisation efforts. While the sector has created jobs, many are concentrated in downstream activities and are often precarious in nature. In South Africa's renewable energy manufacturing sector, firms employ a range of strategies to keep afloat, including short-term contracts and limited job security. In Ghana, employment is similarly concentrated in downstream activities, with firms relying on short-term labour for installation and on-site work.
The research also highlights significant gender biases and job segregation in the renewable energy sector. Women remain underrepresented and tend to be in sales, administration, and assembly lines, while men dominate technical jobs that tend to earn more income. Sexist sociocultural norms at the workplace and women's unpaid care burdens limit their entry into the sector and progression to higher-paying jobs.
To address these challenges, the researchers recommend more effective implementation of local content policies, improved monitoring and enforcement frameworks, and addressing the mismatch in incentive structures. Additionally, there is a need to promote decent work creation, address gender biases, and support the development of a strong manufacturing base in the renewable energy sector. Policymakers, business associations, and labour organisations are working together to address these challenges and support the growth of the renewable energy industry in South Africa, Ghana, and Kenya.
Key points
- Unstable demand and limited localisation enforcement are major challenges facing the renewable energy sectors in South Africa, Ghana, and Kenya.
- The sectors in these countries are also hindered by deficits in decent job creation and persistent gender biases.
- Effective implementation of local content policies and improved monitoring and enforcement frameworks are needed to support the growth of the renewable energy industry.
