Trade in Electricity Services in the Southern African Customs Union: Towards a Negotiating Strategy

The electricity sector in SACU member states is characterised by chronic capacity shortages, underdeveloped infrastructure, and a dominance of state-owned monopolies. While the Southern African Power Pool (SAPP) facilitates cross-border trade, the region remains heavily dependent on South Africa's Eskom. The paper argues that the lack of cost-reflective tariffs and political reluctance to allow independent power producers (IPPs) hinder investment. It recommends a harmonised regional regulatory framework and a strategic approach to liberalisation through a mix of SADC, WTO GATS, and bilateral agreements to improve energy security and economic growth.

• The electricity sector in SACU member states suffers from chronic challenges, including a lack of surplus capacity and underdeveloped transmission and distribution infrastructure, which increases the cost of doing business.
• South Africa is the dominant producer in the region, accounting for approximately 99% of total production in 2007, with 43,061 MW of installed capacity.
• Regional electricity pricing is unsustainably low and fails to reflect the actual costs of production, transport, and distribution, largely due to the prevalence of subsidies.
• State-owned monopolies continue to dominate the sector, and while some countries allow independent power producers (IPPs), they have gained little footing due to a lack of political will and weak regulators.
• The Southern African Power Pool (SAPP) facilitates regional trade, but its effectiveness is limited by national utilities prioritising self-sufficiency over regional needs and by transmission constraints.
• Renewable energy in SACU is primarily used for rural electrification via solar photovoltaic (PV) cells, but large-scale grid-connected potential is hindered by a lack of regional standards and investment frameworks.
• The region's transmission infrastructure is under severe pressure, leading to high losses and frequent electrical outages for firms, which averaged 19 days in 2007.
• Harmonisation of energy policies is necessary to prevent a 'race to the bottom' in attracting investment and to avoid the polarisation of capital toward South Africa.
• The paper suggests a negotiating strategy for liberalisation that combines multilateral (WTO GATS), bilateral (EPAs), and regional preferences, particularly for generation and transmission services.

APA

Disenyana, T., & Samuel, C. (2009). Trade in Electricity Services in the Southern African Customs Union: Towards a Negotiating Strategy. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-46.pdf

Chicago

Disenyana, Tsidiso, and Cézanne Samuel. Trade in Electricity Services in the Southern African Customs Union: Towards a Negotiating Strategy. South African Institute of International Affairs, 2009. https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-46.pdf.

Wikipedia

{{cite report |last1=Disenyana |first1=Tsidiso |last2=Samuel |first2=Cézanne |title=Trade in Electricity Services in the Southern African Customs Union: Towards a Negotiating Strategy |publisher=South African Institute of International Affairs |date=September 2009 |url=https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-46.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{disenyana2009trade, author = {Disenyana, Tsidiso and Samuel, Cézanne}, title = {{Trade in Electricity Services in the Southern African Customs Union: Towards a Negotiating Strategy}}, institution = {South African Institute of International Affairs}, year = {2009}, month = sep, url = {https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-46.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }