Major Challenges in Africa in the Development of Competitive Electricity Markets. An Analysis of the ECOWAS Regional Electricity Market

Two trends have driven the evolution of electricity markets worldwide in recent decades: the liberalization of historically monopolistic markets and the integration of national markets through the creation of interconnections and power pools. This double movement has been observed in sub-Saharan Africa and particularly in West Africa since the 1990s. Indeed, African countries pursued power sector reforms from a “standard model” advanced by development finance institutions (DFI) such as World Bank and International Monetary Fund (IMF). Under structural adjustment packages: DFI required governments to reform strategic sectors of the economy through the separation of powers and functions and the introduction of market-based incentives. There has been a series of reforms carried out by the States to liberalize the sector. Few African countries have a wholesale or retail electricity market, and only a handful of countries have created independent grids, unbundled from state-owned generation. This paper analyzes the process of liberalization and evolution of competitive reforms electricity sector and the construction of competitive electricity markets both at national and regional levels in the Economic Community of West African States (ECOWAS) region. The methodological approach is based on theoretical analysis of policy documents and regulations defined in the fourteen ECOWAS member states and data analysis of secondary data collected from several databases. The approach used is based on both theoretical analysis and analysis of policy documents, implemented regulations, and secondary data to analyze completions and make the most comprehensive assessment possible of the state and evolution of electricity markets in the region.