This is the 4th and final part in a series of interviews with President Isaias Afwerki, which began on February 12, 2023 in Massawa. In the previous three interviews, President Isaias discussed regional and global issues as well as national development priorities. This final part, conducted on Saturday, March 11, focuses on domestic issues.
Q 1. Energy is one of the pre-requisite supplies that must be secured for the effective implementation of national development programme. Whether for agricultural development, manufacturing, or domestic use, energy remains essential. Are there measures put in place to mitigate the obvious challenges in this sector?
A. In the previous sessions of the Interview, we had glossed over certain details for the sake of brevity. In this particular case, we probably need to delve into all its dimensions for a more profound or holistic appraisal of the question at hand.
Our economy, similar to the majority of economies in the developing world, is one of subsistence - producing and exporting raw materials. We have not transitioned to a manufacturing-based economy as yet.
A key sector that would accelerate the desired transition from one phase to the next - from subsistence to industrialization - is energy. Everything, from street lights to electricity for home use to large industries, requires energy.
Our overarching goal remains a comprehensive and sustainable forward-march in all development sectors, and an adequate and consistent energy supply is a key prerequisite. Energy is the backbone of complete production activities and we cannot move from one stage to the next without first meeting this prerequisite. The critical question revolves on the approaches and options available; on taking stock of our specific situation in order to chart out phased implementation of solutions that would help us meet our objectives.
The current capacity is estimated at 120 MW and this obviously falls far short of the national demand. The numerous obstructions and hindrances met in this area were briefly discussed in the previous interview. The fact remains that 120 MW is quite insignificant as far as our national need is concerned. We must contemplate substantial surge of capacity in the range of one, two or three thousand megawatts. What is our strategy and road-map to achieve these targets? What is our overall strategy of transition?
This leads us to a discussion about sources of energy, which include the latest technology in renewables such as solar, wind, and other less costly and more affordable sources. We must move away from the haphazard and disjointed methods we have come to rely on thus far such as the diesel generators in every corner.
Having gleaned important lessons from our experience, we have now charted out a phased strategy that responds to the needs and requirements of each sector in a consistent and methodical manner.
As mentioned earlier, the sources of energy up for consideration are varied, and the actual implementation plan is modular in configuration and hybrid in nature to include thermal, solar, wind and geothermal sources.
At this time, thermal energy, such as that used at the Hirgigo plant and other locations with generators, is our main resource. The plan worked out now consists of a hybrid approach to include solar and wind renewable sources of energy. Geothermal energy is yet another source that has been studied and is said to have immense potential.
Cost-effectiveness, impact, and sustainability are key aspects that are addressed when considering all these aspects.
Another key aspect that must be taken into consideration is transmission, which includes the physical installation of powerline poles and the possibility of having a national grid. In our context, however, a country-wide national grid was deemed unrealistic at this time, which is why a modular approach was chosen as fitting our context. This modular concept revolves around devolved installation of 30MW power plants and mini-grids in each of the twelve economic units throughout the country in the initial years. Each plant and mini-grid, depending on its geographical location, would have a corresponding source of energy to generate the required supply as well as its own transmission and distribution networks.
The blueprint of the programme envisages phased implementation with initial additional output of 360MW in the immediate, short-term, phase. Total output is slated to increase to several gigawatts in subsequent periods. The whole road-map is closely aligned and interfaced with our development plans in the three Economic Zones - the Eastern Lowland Zone; the Highland Zone and the Western Lowland Zone.
The plan is to have a transmission and distribution system that is linked to the development programs in a given area. For example, there are extensive agricultural development and food processing programs in Kerkebet. There are various other programs as well, so whatever energy is produced around that area must meet the needs of the activities in the vicinity.
We must also consider the cost of energy - kilowatt/hour or megawatt/hour. Thermal energy is usually more expensive because it requires fuel. In practical terms, it costs USD 20 to 24 cents per kilowatt/hour, while hydro products cost 8 cents per kilowatt/hour. The difference between 8 cents and 24 cents is obviously substantial. On the other hand, solar energy does not require fuel, but it requires the technology to produce it so one would have an initial cost.
We have divided the national energy network into 12 development areas or economic units. Each of the plants would have a combination of different technologies. The configuration and linking of these subnets into a central, national, grid will be phased. Two or three mini-grids can be connected at the opportune time and the loop may be eventually expanded to incorporate all of them.
Furthermore, one must consider the energy source in each of the 12 mini-grids that corresponds to the surrounding environment. In some areas we would have generators, in other areas solar and/or wind energy. It would have to correspond to the environment and existing development plans. If we take solar, for example, the radiation in the highlands is stronger while the eastern part would be different and the western plains have their own characteristics related to the geographical situation.
If the target is to produce 30MW in each network, the question that follows is: how? Would we produce 30MW at once or do we do that gradually? It would obviously need to be a gradual process and be closely linked to our development plans. The total production can start at 360MW and eventually rise to thousands.
The point is that we cannot continue to rely on thermal energy, and we aim to have a sustainable transition to more efficient sources such as wind or solar with the ultimate aim of developing a geothermal program. We are located at the Rift Valley and this has its advantages. Geothermal sources were previously explored a long time ago but further research is required to install the appropriate technology and thereby generate the requisite energy.
In Kenya, for example, about 17 years ago, they were producing only 20 MW from geothermal sources. They have now reached 1,100 MW as witnessed during our last State visit. This is quite significant. The potential estimates are 10-15,000 MW. We envision introducing such a gradual program here, too, but proper research must also be conducted in terms of the capital expenditure required, as well as on matters of operational efficiency and utilization.
In brief, the current blueprint envisages generation of 360MW at this initial phase. Funding and technology are key considerations. Above all, however, capacity building is crucial. The human resources and expertise we develop alongside this plan would be an asset in and of itself.
Other considerations include the technology used for consumption. It must be cost-effective and this is important for both domestic and industrial consumption.
Incorporation of advanced technology in the energy sector will catalyze and expedite the transition from subsistence to indusrial economy. For example, we can begin by producing cotton and move to quilts and from there to textiles and apparel. This would require us to develop the industrial technology in tandem. This is a process. We can then consider more complicated productions such as iron ore. The production of steel bars, for example, is something that we have done in the past. There was a plant in Godaif that produced nails and steel bars. With the technology available at the time, the plant consumed 4 MW. Obviously, cost-effectiveness must be considered but this is an industry that should not be abandoned. All this is to say that energy remains a key prerequisite for all these plans.
In brief, the roadmap charted out both for the immediate and long-term development of the energy sector is sound and on the righ track. It is also fully aligned with the geographical delimitation of our development programme in the three Economic Zones. This information is obviously a general introduction and aims to show that for us to move towards our desired objectives, we would need continuous monitoring, research, and information as we respond to our needs.
Q 2. Eritreans, at home and abroad, have shown utmost dedication and commitment in responding to the immense challenges - to combat COVID-19 or to marshal support and strengthen our national resilience - that the counry has faced in the past three years. As we enter this new phase of invigorating encomic growth, what are government's policies and programmes to attract investment from our nationasl? How about foreign investment and cooperation?
A. The controversy is not on the formulation or refinement of policy. The key question is whether the designed policy was implemented and the extent to which it achieved the desired objectives.
The Government of Eritrea, (GOE), had pursued an extensive programme of divestment of public enterprises in the early 1990s in the immediate aftermath of independence. Nationalized enterprises, including housing, were all privatized at the time. Unfortunately, the programme did not yield the expected contributions to the growth of a dynamic national economy for a variety of reasons, including corruption among those who were given the opportunity. This is not being raised to exaggerate the anomaly or review the whole process. Indeed, it did not breed disillusion or engender policy changes. Widespread citizens' participation remains at the core of our investment policies and the GOE continues to pursue a policy framework that encourages private domestic investment.
This policy framework, however, is not confined to a certain section of society and encompasses the participation of all stakeholders - from the farming or pastoral households to those with much higher capacity. - with the ultimate aim of bettering the lives of every single citizen.
We cannot gloss over or ignore the potential contribution of our pastoralist citizens to the economy. Our latent livestock potential is indeed huge. We must find ways and means to enhance the contribution of the pastorlists to the national economy. This includes providing them with all the key inputs and services that would help them access services and markets. The measures that must be envisaged include introduction of various and appropriate new technologies that would maximize their production.
This also requires laying the groundwork for this relatively large section of society to add value to their products - helping them move towards producing milk and milk products, leather tanning, meat production, etc. Furthermore, this refers to providing this sizeable section of society with key social services such as education and health, water, roads, energy, veterinary clinics, etc.
This may be viewed as primitive economy, but the fact remains that this area cannot be underestimated as pastoralism generates a significant contribution to the national economy. But requires substantial investment in order to yield its full latent potential.
If we are to speak of a context-based investment, then it must be all-inclusive and equitable. At this time, the majority of so-called investment tends to revolve around hotels, restaurants, bars, etc. This is all well and goo. But in the grand scheme of things, this is a very small part of what is truly required for the economy to develop.
Agricultural development is yet another area that requires substantial investment considerations. Use of modern technology selected and improved seeds, appropriate fertilizers, proper land allocation and use are among key parameters that will require investment. The whole gamut of envisaged transformation encompasses use of modern technology at the household farming level, and widespread irrigation for multiple annual harvests.
The next and related logical step is to move towards processing and manufacturing. The metal industry; assembly plants for various vehicles; processing of cotton, sugar and other agricultural products can be developed by marshalling the requisite investment.
All of this is to say that, in every sector of the economy, there is ample room for the active participation of, and investment by, citizens - whether in partnership, individually, through cooperatives, etc. At this point in time, the Government may have initiated and is actually operating especially large-scale agricultural projects. But this is transitory and will have to be transferred and divested, with time, to the citizens at large as appropriate investors. The approach also applies to other seemingly large investments, including mining. The modalities will have to be worked out, but this is the policy and ultimate aim.
Furthermore, this is also an area where Eritreans in the Diaspora ought to play a very active role. Eritreans abroad have evidently higher potential, and this will be tapped in an optimal manner. This will require relevant data collection as well as judicious advice to funnel investment for more impacting ultimate output. Investments can be done individually or through groups. The roadmap and institutional frameworks are being refined, and some bottlenecks (housing, etc.) will be resolved, in view of the latent potential and demonstrated desire in the Diaspora to invest in their homeland. Domestic private investment must also be seen in its regional context.
Investment will obviously not be ignored due to some negative experiences in the past. Our approach must be directed towards a sound campaign. There must be individual, partnership, group, local, sector-by-sector, industry-by-industry investment that ensures broad public participation. Eritreans in the US, Europe, Africa, and the Middle East must be given the opportunity to invest their hard-earned income in their country. All of this would have a cumulative positive effect on economic growth. A key challenge related to this area is housing. This is something that we need to work on more broadly as the supply outweighs the demand at this time.
We can implement large-scale investment programs in processing plants, agriculture, plastic and metal industry, and even electronics. We also have general guideline in place that provide investment advice to citizens. Ultimately, however, the decision is up to the individual investor. Although we have previously drawn up an investment roadmap, it would have to be updated taking into consideration the various key aspects that relate to it - energy, water and other sectors mentioned earlier.
The tourism industry, for example, is one with immense potential. But, it requires some key inputs - infrastructure, energy, air, land, and sea transports as well as social services - to be in place before it can be fully realized at this point in time.
All this is to say, investment cannot be based on emotions and requires careful planning and timing.
As it was underlined earlier, we currently have agricultural programs that are developed by public corporations. Ultimately, however, these corporations must open up, and not deter, investment opportunities for citizens. Similarly, public transportation modes and other services which are broadly operated by public enterprises will be open to private investment by our citizens; individually, jointly or in consortium with other investments. Informative sensitization campaigns will have to be launched to increase the awareness of potential investors in making the right choices.
Our citizens living abroad want to eventually return home. As such, the groundwork laid must be able to absorb this demand. Similarly, a potential investor has to have a plan in place to be able to meet his or her objectives. This entails savings. Furthermore, people ought to consider working in partnership and in cooperatives instead of thinking individually. One can then invest in any industry or sector of their choice. All of this may seem easy theoretically but needs organization and management.
Increasing national revenues is not tantamount to increment of government revenues. Mining, agricultural program, and many other sectors are open for investment. The most important part of the economy, and an aspect that can contribute significantly to growth, is in fact the activity of citizens. Therefore, all opportunities should be open to citizens who wish to participate. Continuous advocacy and awareness raising is required so that they can invest in vibrant projects, industries and sectors rather than running around or looking for shortcuts. The legal framework must also help them invest. Past experience and some negative events will not deter us from these plans.
Data collection remains key, and we must provide robust information on all areas that are open for investment - every sector and industry. We must be able to give sound advice by taking into consideration not only the domestic reality but also regional and global situation. There is also much that can be done in collaboration with other citizens and in other countries in the region.
The analysis must therefore be dynamic, becoming stronger over time, increasing in depth and breadth. The launching of this program can be made easier once we refine our plans in 2023.
That the desire for investment coming from our citizens living abroad has leap-frogged the framework already in place is evident indeed. As such, we must make all efforts to march alongside it. Even if we are not able to meet all the requirements immediately, we can develop the process over time. But the current general understanding is that we must take the initiative to lay the groundwork for a successful investment program that can be tracked through milestones in 2023, 2024, etc.
. . . Q. What about foreign investment and cooperation?
A. Foreign investment is also linked to citizen's investment. As far as foreign investment is concerned, the GOE has always been open to, and encourages, foreign investment. The problem is that what is often termed as Foreign Direct Investment, (FDI), has largely been a zero-sum game in Africa as a whole, confined as it is, in most cases, to the extraction of raw materials. Most foreign investment is about exploiting the country's raw materials and labour force with two or three partners. This has to change. One must ask, why does Africa continue to find itself in the situation it is in while it holds 60 percent of the world's wealth or resources? It currently has 1.2 billion people. It is estimated to grow to two or three billion in a few generations. The current subsistence economy will not solve the challenges faced by the majority of people.
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In this respect, contrary to some wrong perceptions, Eritrea welcomes foreign investment - from the US, Europe, Asia or elsewhere - as long as it meets three cardinal parameters: it must create substantial employment for highly skilled manpower; it should result in the transfer of technology; and it must focus on full value-addition instead of exporting unprocessed raw materials.
We must have criteria to measure the benefits accruing from investment; and what it can contribute to the overall roadmap. Ultimately, its contribution to economic growth is determined by those factors. Domestic investments too are governed by these standards, not just foreign investments.
Competition between big powers, be it the US, Russia and others, is driven by advances in their industrial economies. We cannot enter the race with our hands and feet tied as it would result in zero-sum game for us. We cannot allow extraction-based investment at the expense of the country, at the expense of the people, at the expense of future generations.
We have our own standards, and our measurements are the policies we formulate; the programs we issue and the plans that go along with them. Beyond that, we have nothing to worry about, even if one comes to invest from Mars. Our only measure is whether it benefits us or not.
Q 3. We have come to the end of this series of interviews. Due to the paucity of time, we presume that all the questions on international, regional and domestic issues raised in the previous sessions may not have been addressed exhaustively. In this respect, are there additional issues that you wish to emphasize within the framework of GOE's policies of social justice and cohesion? What concluding messages would you like to convey to our people?
A. I would like to presume that the core questions have been discussed. But the fundamental issue or objective is the progress and advancement of the country and its people. In this regard, the selflessness and commitment of the Eritrean Defense Forces, (EDF), which transcends its role in safeguarding the national security of the country, must be recognized and highlighted. As such, the members of the EDF must remain an integral part and beneficiaries of the country's extensive development programmes. The development work achieved by the EDF is not easy. This body is at the forefront of all development programs - today, tomorrow and thereafter - whether agriculture or other sectors, the sacrifices are immense.
Having said this, it is also important to note that EDF is part and parcel of the larger society and as such must function within it and be supplemented by its efforts.
In this spirit, we must commit to higher organization and more effective modalities of participation by all segments of the Eritrean society at home and abroad, including the EDF, to ensure the crystallization of, and thereby achieve the desired progress, that is commensurate with their unparalleled resilience and dedication.
For all of this to materialize, we need peace and stability. This is not Manna that will come from without. The same applies for development. These objectives will be realized through our own toil only; with the broad participation of our people.
All administrations - at the Regional, Sub-Regional, and local levels - must be able to organize themselves. The development roadmap that is envisaged or drawn is achieved by organized human resources. The defense forces, police, security, and other institutions of the people's army are part of the people. The awareness needs to be deepened.
Everyone must be equipped with all the tools needed - from the basic tools to the most advanced technologies. We need to highlight these programs frequently. Sporadic interviews are not enough. Benchmarks must be set, and continuous monitoring and evaluation must take place periodically. We must evaluate what we have done and where our plans have reached. This comprehensive national program is implemented by the people at home and abroad, the security forces and all government bodies. We cannot view any part of this national mosaic separately. We have to set a timetable to implement the overall guideline and mobilize the requiste financial and material resources. We must be able to deal with the bottlenecks. We must also organize our human capacity. Every citizen must be able to enjoy his or her right and hard-won dividends. At the same time, he or she must be willing to carry out his or her responsibility. In practical terms, one must be able to defend with one hand and build with the other.
Mr. President, on behalf of the audience, we thank you for the extensive information you have provided us. We hope to follow up the progress in the coming months with a similar interview during May-June. For now, we thank you again for this extensive four-part series.
