The sugar industry in Eswatini is playing a crucial role in the country's energy sector, with a current generation of 107 megawatts from bagasse. This was highlighted by UN Resident Coordinator to Eswatini, George Wachira, during his address at Business Eswatini's Annual General Meeting. He emphasized that this existing capacity can be built upon to achieve energy security, which is essential for economic security. No industry can grow at scale without reliable and affordable electricity.
Wachira pointed out that sugar, traditionally treated as an export crop, has now become an energy crop. The 107MW cogeneration base in the sugar belt demonstrates Eswatini's ability to produce its own predictable power. He stressed that energy security is vital for economic growth and that the country can leverage this existing capacity to move towards a more sustainable energy future. This can be achieved through a clear framework for independent power producers and access to concessional climate finance.
The UN Resident Coordinator highlighted the potential for solar energy to complement the existing bagasse cogeneration capacity. He noted that solar is now the cheapest source of new power globally and, when combined with bagasse and storage, provides businesses with an opportunity to be both producers and customers of electricity. This can help Eswatini address its energy challenges, including frequent blackouts and reliance on imported power.
Wachira also linked the sugar industry to a broader narrative about Africa's economic development. He cited the continent's significant losses due to illicit financial flows, estimated at $88.6 billion annually, mainly through trade mispricing. He emphasized that African pension savings, which could fund local industries, are often invested abroad, highlighting the need for the continent to retain value and build its own economic resilience.
The UN Office of the Special Advisor for Africa refers to this phenomenon as the triple paradox: rich in resources yet fiscally distressed, rich in energy sources yet short of energy, and rich in agricultural land yet food insecure. For Eswatini, Wachira emphasized that the sugar industry can serve as a model for retaining value and promoting economic resilience. He proposed the Energy Resilience Compact, one of four co-investment deals the UN Country Team is suggesting to Business Eswatini.
The proposed Energy Resilience Compact aims to pool demand from industrial estates and large users for solar, bagasse cogeneration, and storage, backed by climate finance. The other three proposed compacts also draw lessons from the sugar industry. These include the Food Systems and Water Compact, which would link smallholders to agro-processors, and the Skills and Future of Work Compact, which would focus on co-designing and co-financing curricula and apprenticeships with TVET colleges.
Wachira also highlighted Eswatini's weakness in knowledge and innovation, citing Africa's low contribution to global knowledge production. He emphasized the need for the country to invest in education, health, and skills development, which are critical for building a competitive and resilient economy. The proposed Digital and Data Compact aims to address this challenge by investing in connectivity, digital payments, and data systems to reduce the cost of doing business, particularly for small and medium enterprises.
Key points
- Eswatini's sugar industry generates 107MW from bagasse, a potential anchor for a new energy economy.
- The UN Resident Coordinator proposes four co-investment deals to promote economic resilience in Eswatini.
- Africa loses $88.6 billion annually due to illicit financial flows, mainly through trade mispricing.
