Energy Efficiency Is Not About Electricity—It Is About Competitiveness

One of the greatest misconceptions in industrial development is that energy efficiency is merely about reducing electricity bills. In reality, energy efficiency is about increasing productivity, strengthening competitiveness, preserving capital, and ensuring that manufacturers remain viable in an increasingly demanding global economy.

This was the central message delivered by Prof Sampson Mamphweli of the South African National Energy Development Institute (SANEDI) during the 13th Manufacturing Indaba Conference & Expo. His remarks remind us that the future of manufacturing will not be determined by energy alone, but by the people who design sound policies, develop innovative technologies, and adopt automation to produce more value with fewer resources.

From the Banking On Africa’s Future perspective, this is ultimately a capital formation story.

Every kilowatt-hour saved is capital preserved. Every automated production process increases productive capacity. Every innovation that reduces waste improves the return on investment. These outcomes strengthen balance sheets, enhance competitiveness, and create greater opportunities for reinvestment and long-term growth.

South Africa’s National Energy Efficiency Strategy, targeting a 29% reduction in energy intensity by 2030, demonstrates how public policy can create an enabling environment for private investment. Likewise, the Section 12L Energy Efficiency Tax Incentive shows that governments can encourage productive behaviour by rewarding measurable efficiency rather than merely subsidising consumption. More than 34,000 GWh of verified energy savings and over R29 billion in tax incentives illustrate the scale of value that can be unlocked through well-designed policy.

Equally important are the forthcoming regulatory developments, including Phase 2 of the Carbon Tax, Minimum Energy Performance Standards, expanded electricity wheeling arrangements, and Energy Performance Certificate requirements. These are not simply compliance obligations; they are signals directing investment towards a more productive and resilient industrial economy.

Consistent with the philosophy underpinning this series, South Africa itself does not innovate. It is the people acting through businesses, research institutions, government departments and entrepreneurial enterprises who innovate. They are the agents of change. They are the ones who create value, formulate policy, invest capital, develop technology, and ultimately shape the country’s industrial future.

For Africa’s industrialisation agenda, the lesson is clear. Competitive manufacturing will not emerge from natural resources alone. It will be built by people who combine policy certainty, technological innovation, automation, disciplined capital allocation, and continuous learning to produce more with less.

That is how industries become globally competitive.

That is how productive assets are created.

And that is how the people of Africa secure their economic future.