Thesis (MBA)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: Energy of any form is of paramount importance in the development process of communities, regions and nations. It is a domestic necessity but also a factor of production whose cost directly affects prices of other goods and services, and the competitiveness of enterprises. Energy also plays a critical role in enabling social improvement and development: economies that are unable to provide access to modem energy for everyone at reasonable costs are left behind in a globalised world. Industrialised countries have proved that efficient energy production and distribution is a key factor for the generation of wealth. They have built there success on energy sources that are easily accessible and convertible into motion, heat or electricity. However, most of these sources are limited and not renewable in the literal meaning of the word. Huge infrastructure projects and trillion dollar investments are done in energy sources like fossil fuels that will in a not too distant future be exhausted. Additionally, these fuels lead to climate change with unpredictable consequences. Renewable energy on the other hand, has not been given enough political and financial attention that would make it competitive and provide a real alternative. Developing countries, and the African continent as a whole, have tried to imitate the economies of the first world when it comes to energy sourcing. They are very likely to fall into the same traps: large investments into projects that benefit a small number of people, over capacities on the supply side, energy generation that is closely connected to environmental pollution and last but not least: dependency on energy reserves that are located in politically unstable regions of the world. It is recommended that Africa as a continent should work on energy sourcing concepts that • reduce poverty and enable development, • give its scattered population access to modern energy at reasonable cost, • rely on socially and environmentally sustainable energy generation, • integrate regions to avoid conflicts, • lead to independency from external energy supply and • make the continent a competitive actor in the global market place. In the case of 3 African countries namely Algeria, Ghana and South Africa it is illustrated that there is an opportunity for Africa to do things differently and to learn from the mistakes in the history of modem energy. The focus on existing opportunities, the interest to learn from others and the readiness to work together with partners enable these nations to really fuel development and achieve above average social and economical growth. / AFRIKAANSE OPSOMMING: Energie in alle vorme is van uiterste belang in die ontwikkeiingsproses van gemeenskappe, streke en nasies. Dit is beide 'n plaaslike vereiste, maar ook 'n produksiefaktor, waarvan die koste 'n direkte invloed het op pryse van ander goedere en dienste en die mededingendheid van ondernemings. Ekonomië wat nie die vermoe het om toegang na moderne energie vir almal teen redelike koste te gee nie, word agtergelaat in 'n geglobaliseerde wereld. Geindustrialiseerde lande het bewys dat effektiewe energieproduksie en -verspreiding 'n sleutelfaktor is vir welvaartskepping. Hulle sukses is gebou op energiebronne wat maklik, toeganklik en omskakelbaar is in beweging, hitte of elektrisiteit. Meeste van hierdie bronne is egter beperk en nie hernubaar nie. Enorme infrakstuktuurprojekte van biljoene dollar word investeer in energiebronne soos fossielbrandstof wat in die nie-soverre-toekoms uitgeput sal wees. Die gebruik van hierdie tipe brandstof lei tot klimaatsveranderinge met onvoorspelbare gevolge. Hernubare energie het egter nog nie genoegsame politieke en finansiele steun gekry wat dit 'n mededingende werklike alternatief maak nie. Ontwikkelende lande en Afrika as geheel, probeer eerste wereldse ekonomie navolg ten opsigte van energie verkryging. Die kanse is goed dat hulle in die volgende slaggate sal val: Groot investering wat min mense bevoordeel; oorvoorsiening ten opsigte van lewering; energie-opwekking wat omgewingsbesoedeling aan die hand werk; afhanklikheid van energie-reserwes wat in politiese onstabiele streke van die wereld gelee is. Dit word aanbeveel dat die Afrika-kontinent werk na energiebron konsepte wat: • Verminderde armoede aan die hand werk en ontwikkeling bevorder • 'n Verspreide bevolking toegang gee tot moderne energie teen billike pryse • Vertrou op sosiaal en omgewings volhoubare energie opwekking • Streke integreer ten einde konflik te vermy • Afhanklikheid van eksterne energie bronne vermy • Die kontinent 'n mededingende speler in die wereldmark, maak. In die gevalle van drie Afrika lande naamlik, Algerie, Ghana en Suid-Afrika, is dit geillustreer dat daar is 'n geleentheid vir Afrika om nie die foute van die verlede te herhaal nie. Die fokus op bestaande geleenthede, die belangstelling om te leer van andere en die bereidwilligheid om saam met vernote te werk, skep die geIeentheid vir hierdie lande om ontwikkeling te dryf en om bo-gemiddelde ekonomiese en sosiale groei aan te teken.

In terms of economic development, internal availability of energy in a region means the capability to produce essential goods and services for the improvement in the quality of life of all the economic agents. Economic development consists in large part of harnessing increasing amounts of energy for productive purposes or by making more efficient use of available energy resources. In this dissertation, the future electricity supply and demand interactions are examined for seven countries in West Africa: Benin, Ghana, Ivory Coast, Niger, Nigeria, Togo, and Upper Volta. A description of the primary energy resources (coal, hydro, natural gas, and oil) available in each country is presented. The future demands for electricity in the medium term (1980-1989) are projected through econometric models developed in the study. Two sectorial models for each country's economy, the residential sector, and the commercial and industrial sector, are presented. Multiple regression analysis is applied in the estimation of all demand equations. Major determinants for electricity demand used in the estimation for the residential sector were average price of electricity, real personal income, and the number of households with access to electricity. Data on these variables were obtained from international organisations such as the United Nations and from government publications for the period 1960-1977. Each of these determinants was found to be significant for most countries; however, their relative importance differ across countries. Similarly, average price of electricity, real output, and employment were major determinants used and found to be significant in the demand for electricity in the commercial and industrial sector of all countries. Price and income elasticities were obtained from the estimated equations. A general multi-region supply model was developed to structure the future electricity supply possibilities in the countries involved. The objective of this model, using linear programming, was to seek the least-cost combination of resources (primary energy, capital, and technology) for the production of electricity. The impacts of various levels of resource availability on average cost of electricity were examined for each country, and for joint development efforts using a non-integer, deterministic, linear version of the general model. The application of the supply and demand models to West Africa over the decade to 1989 reveals that except for Nigeria, all countries in the region will require fossil fueled systems to supply additional demands for electricity, because all hydro resources would have to be exploited by the mid-1980s. This will lead to higher costs in producing electricity. However, Nigeria is expected to have excess electrical energy if plans initiated in its third development plan are completed. The extension of transmission lines between Nigeria and Benin could effectively distribute the relatively cheaper energy from Nigeria to other countries, since adequate transmission network already exists between most of the countries.