Export Performance Enablers in Africa’s Emerging Green Hydrogen Sector: A Capabilities-Based Analysis

Abstract

Fossil fuels continue to dominate the global energy sector, leading to high greenhouse gas emissions and environmental deterioration. As climate change concerns intensify, transitioning to renewable energy has become crucial. Green hydrogen, capable of long-term energy storage and mitigating the intermittent nature of solar and wind power, stands out as a promising solution. While developed countries are regarded as proponents of green hydrogen due to their substantial investments in green hydrogen initiatives, six developing African countries - Egypt, Namibia, South Africa, Mauritania, Djibouti, and Morocco, possess abundant natural sources of renewable energy. However, the question remains as to whether these African countries with immense potential, have the capability to benefit from the green hydrogen value chain despite the challenges associated with the adoption of renewable energy. Using data from the UNCTAD stands for the United Nations Conference on Trade and Development (UNCTAD) and WDI (World Development Index) across six African countries, this paper analyses technological and productive capabilities conceptualised as production capabilities as crucial drivers for global value chain participation and export performance in the green hydrogen sector. The findings indicate that innovation, infrastructure and technical capacity drives participation in the green hydrogen value chain. Furthermore, trade openness highlights the importance of conducive trade agreements while exchange rates are a major determinant of export performance. The findings further revel that Green Hydrogen might be less attractive to African countries. This paper contributes to renewable energy transition literature, offering policy implications to enhance Africa's participation in the green hydrogen economy, aiming for a sustainable future with reduced emissions and improved living standards.