The paradox of overcapacity in African energy sectors

Several African countries are experiencing problems with overcapacity in their energy sectors on a scale that cannot be explained or justified with reference to the volatility of supply alone. This constitutes a paradox in contexts where many people do not have access to modern energy. Based on a review of the scant existing literature, this paper provides an overview of existing explanations for overcapacity and discusses its potential implications. It identifies three general explanations whose relative weight, however, differ from one country to another, namely the quality of planning and management, national ideology and political interests, and the role of donors and private investors. Among the potential implications are not only the increasing deficits and debts of public utilities, higher tariffs and reduced access to energy, but also delays in energy transitions. This has policy implications for energy-sector planning, including the role of bureaucracies and experts, the management of public utilities and debt, and tariffs, as well as for procurement and contracting. Overall, more research is needed.