🔒 Boardroom Talk – Comparative energy costs help explain why Nigeria, Egypt are pulling ahead of SA

As our cartoonist Dave Doubell points out, SA’s Electricity Minister has a lot of work on his plate before he should be doing any dancing

By Alec Hogg

Nigeria ending its fuel subsidy pushed the oil-rich nation’s petrol price to the equivalent of US80c a litre – apparently emptying Lagos’s famously clogged roads, but unleashing a torrent of complaints from citizens. Nigerian petrol, though, remains well below the US ($1.01); China ($1.19); India ($1.26) and the UK ($1.88). SA’s pump price per litre is $1.21.

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This means it’s still a third cheaper to power a vehicle in subsidy-free Nigeria than SA. The difference is primarily fuel taxes which swallow between a quarter and a third of what we pay at the pump here. Observing this got me wondering about other energy costs – in particular electricity – and how how SA compares with competitors.

On that point, all-knowing ChatGPT provided a list of eight countries it considers direct competitors to SA for global businesses consider an African presence. Nigeria, Egypt, Kenya and Ghana head a list that also includes Ethiopia, Botswana, Mauritius and Rwanda.

In the tables, I added relevant SADC neighbours for completeness. A glance at the table above helps explain why Egypt and Nigeria now surpass SA in GDP. Both offer far lower petrol prices than here – a benefit of being oil producers. It emphasises the urgency for SA to exploit its abundant oil and gas reserves.  

The table above confirms the Egyptian energy advantage. And that of potential new BRICS member Ethiopia, whose abundant hydroelectric and other renewable power is particularly appealing to multinational manufacturers needing to reduce carbon emissions. Once again, Nigeria also stands out as a better option. Sobering stuff for Pretoria.

These numbers, incidentally, were drawn from GlobalPetrolPrices.com, which has up-to-date data on energy costs for virtually all countries. A useful resource.  

Sterkte

Alec  

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