When African Union Chairman Macky Sall addressed the United Nations General Assembly last September, he wasn’t shy about speaking up for his continent. The gist of his message? There is absolutely no excuse for failing to ensure consistent African representation in the world’s key decision-making bodies.
“It is time to overcome the reticence and deconstruct the narratives that persist in confining Africa to the margins of decision-making circles,” said Sall, who also is the president of Senegal.
Sall’s speech was about the need to give Africa permanent seats at the UN Security Council so, as he put it, “Africa can finally be represented where decisions that affect 1.4 billion Africans are being taken.”
But that was far from the first time he has called upon the global community to seek and consider African perspectives. From the beginning of his one-year term as the African Union’s chairman last February, Sall said he wanted to see fair, equitable international partnerships that welcomed African contributions instead of dismissing African priorities.
“Our continent cannot be a field which is the feast of others,” Sall said during his inaugural speech.
He also has spoken up for greater African representation in the G20, which as of yet only has one African member (South Africa). Multilateralism must “serve the interests of all,” Sall argued in October, or it will suffer “loss of legitimacy and authority.”
I commend Chairman Sall for his tireless work, not only to insist that the global community listens to and respects African issues, but also to build awareness of just what those issues are.
He has put African needs and priorities — including infrastructure development, greater access to COVID-19 vaccinations, food security, and an end to energy poverty — in front of world leaders ranging from Chinese President Xi Jinping to U.S. President Joe Biden. He has done the same at global events, including the 2022 G20 summit and the COP27 climate conference.
Sall has been particularly outspoken about Africa’s energy needs and the rights of African countries to continue extracting and capitalizing upon their oil and gas resources, even in the face of tremendous global pressure for Africa to make a rapid switch to renewable energy sources. Sall has firmly stated that, when it comes to the global march toward net zero emissions, Africa will not be in lockstep with the rest of the world at the expense of our countries’ well-being.
We are in an era when Africa needs fierce advocates. Nations and international partnerships are fighting for their respective priorities, and unless African leaders are willing to stand up for what our continent needs, our objectives will be pushed aside. Sall has, indeed, taken a stand.
An Unwavering Voice for a Just Energy Transition
African energy was not Sall’s only priority as chairman of the African Union, but he did, rightfully, use his platform to expand global awareness of Africa’s unique energy needs in 2022. He pointed out the hypocrisy of wealthy countries that harnessed fossil fuels to industrialize and grow their economies telling developing African countries that the world’s zero-emission goals trumped their right to do the same.
“We will not accept that polluting countries, responsible for the situation of the planet, tell us that we are no longer going to finance fossil fuels,” Sall said in September.
He made similar remarks when he opened the MSGBC Oil, Gas & Power 2022 conference and exhibition, held Sept. 1-2 this year in Dakar. The MSGBC region comprises Mauritania, Senegal, the Gambia, Guinea-Bissau, and Guinea-Conakry.
“In this new configuration of the world, energy resources are major assets for Africa. Therefore, we must not accept that our continent is an object of world geopolitics, but an actor, aware of its natural wealth of interests, which acts on the competition instead of suffering it,” Sall said, adding that made no sense for African countries to stop exploiting their oil and gas resources while more than 600 million Africans lacked electricity. “While remaining committed to the implementation of the Paris Climate Agreement, we must continue to defend the interests of our countries in the run-up to COP27 next November in Egypt.”
And that’s exactly what happened. Sall and other African leaders fiercely defended Africa’s energy interests before and during COP27. The result? As multiple news outlets reported, African natural gas took center stage at the conference.
A Strong Collaborator
As I tweeted in November, Africa was fortunate to have Sall at COP27. He understands both sides of the African energy transition debate: the need for Africa to set the timing for its shift to renewables and the world’s need to address climate change. Sall advocated for ongoing natural gas production in Africa, which allows us to minimize carbon dioxide emissions while providing much-needed gas to generate electricity domestically, build our economies, and move toward industrialization. Sall also has pushed for the international community to help fund the renewable energy infrastructure Africa needs for a just transition and to provide financial support for African climate adaptation.
Climate adaptation measures have particularly been a priority for Sall. In his capacity as president of Senegal, he and the CEO of the Global Center on Adaptation (GCA), Patrick Verkooijen, partnered in 2022 to unlock $1 billion in climate finance for Senegal under the Africa Adaptation Accelerator Program (AAAP). The AAAP, Africa-led and Africa-owned, is working to bolster adaptation in agriculture, digital services, infrastructure, entrepreneurship, and jobs for young people. It was developed by the Global Center on Adaptation (GCA) and the African Development Bank (AfDB) in collaboration with the African Union.
Sall was among the trailblazers to convene the Africa Adaptation Leaders’ Event during COP27. He also co-wrote, with French President Emmanuel Macron and Dutch Prime Minister Mark Rutte, an opinion piece for the Guardian about the AAAP. It emphasized the critical importance of increased funding from developed countries for climate adaptation initiatives in developing countries, particularly those in Africa.
What we’ve seen is a pragmatic approach from Sall, one that recognizes the need for Africa to continue harnessing its oil and gas reserves while working diligently to move toward the transition to renewables — and to build climate resiliency into Africa’s economy.
When Sall’s one-year term at the helm of the African Union concludes February 5, the many challenges facing Africa will hardly be behind us. Nevertheless, I firmly believe that Sall has been making a vital difference in his role. Sall has said, loudly and clearly, that African voices will not be silenced. Thanks to Sall, it appears that the global community is starting to hear that message. That is a step in the right direction.
ExxonMobil’s recent discovery in Block 15 off Angola in the Bavuca South prospect adds further credence to the notion of Africa as a significant contender in future energy markets.
The discovery, the company’s first in the region since 2003, lies approximately 365km to the northwest of Luanda’s coastline at a depth of 1,100m and is expected to contribute to an eventual production capacity of 40,000 barrels of oil per day.
This find would not have been possible without a welcoming disposition to exploration and the agreeable conditions established by the government of Angola. The African Energy Chamber regards every outcome like this as a great success and another step closer to a prosperous future for Africa as a whole. However, our perspective is not shared by many who attended and spoke at COP27, the UN climate summit held this month in Egypt.
Voices of Opposition
South Africa-based climate activist Bhekumuzi Bhebhe, apprehensive of the environmental impact that African partnerships with international oil companies could lead to, led chants of “Don’t gas Africa” outside the event. Radical environmental group extinction rebellion, Chloe Lebrand and their sponsors that don’t hire Africans with an Anti-African agenda have joined the chorus.
Omar Elmaawi, an activist from Kenya who opposes the construction of the East African Crude Oil Pipeline, fears that government corruption would lead to the exploitation of African resources.
“My assessment has always been either our government leaders are really ignorant and stupid, or some of them have been compromised, and they are not working in the best interest of their people,” Elmaawi said.
Critics of African oil industry expansion suggest that investments should divert toward developing renewable energy for the continent instead.
German nonprofit Urgewald contributed to the 2022 Global Oil & Gas Exit List, an annual report that details the investment activities behind global oil and gas production. This year’s report revealed that despite their declared commitments to the UN’s Net Zero emissions goals, many financial institutions continue to back oil and gas companies, encouraging expansion for 96% of the industry.
Noted environmentalist Heffa Schuecking, executive director of Urgewald, spoke to journalists at COP27 on the difference between the stated intentions of the oil and gas industry and its real-world actions.
“We see new fossil fuel projects in 48 out of 55 African countries and these projects can be traced back to 200 companies,” Schuecking said. While the discussions are ongoing here at COP, we see a disconnect with what is happening in Egypt and in the rest of Africa. In Egypt alone, we have 55 companies prospecting for new gas discovery.”
Regarding Africa’s potential for renewable energy and the $5 billion currently at play in African oil and gas exploration, Schuecking said, “If we compare the investments going into the fossil side and going into the renewable side, it’s a huge gap. It’s enormous. We’re investing in the wrong place.”
The African Energy Chamber holds a differing view. We believe that these investments are targeting exactly the right place, at the right time, and we encourage more investors to follow suit.
An Overdue Reality Check
Climate protestors around the world have made headlines in recent months for blocking roadways, defacing buildings, and vandalizing priceless works of art while calling out for an end to oil. As they glue their hands – and even their heads – to gallery walls and showroom floors, they sport clothing, footwear, and accessories made from petroleum.
Some of these attention seekers have disrupted professional tennis matches, tangling themselves in the nets while demanding a cessation of airline travel or prophesizing environmental doom in the days ahead. One went so far as to set himself on fire, but none of them have offered any viable alternatives to fossil fuels.
Aside from their moments of questionable zealotry, these activists likely lead normal, modern lives in first-world nations that would be impossible if not for the incredible conveniences that oil and gas have delivered.
Despite the fact that fossil fuels deserve credit for enabling the technological revolution, massive improvements in quality of life across the globe, and the fastest population growth in human history, the dominant opinion shared by world leaders today is that we should stop using them as soon as possible.
While many of the COP27 discussions on timelines for ending global CO2 emissions often included improbable dates in 2050 or even 2030, one voice in the crowd offered a dose of realism.
In a statement given to UN News, Miriam Hinostroza, an environmental economist with the UN Environment Programme, laid out the stark truth of our current situation.
“Sometimes, a priority for countries is economic growth, which they only get from using fossil fuels – they are still cheap, the technologies are there, there are many power plants [and] they cannot [all of a sudden] just get rid of these plants. So, there is this issue on the stranded assets – what to do with all these investments, all these technologies,” Hinostroza said, suggesting that the idea of mandates banning fossil fuels within the next decade is “not a reality.”
A Handout or a Leg Up?
Considering that Africa is responsible for only 4.8% of global CO2 emissions but suffers under a disproportionate impact from climate change, the COP27 consensus is that Africa should leave its fossil fuel reserves in the ground and collect financial reparations from the nations fortunate enough to have already profited from their own petroleum resources.
Such pledges, however, often amount to no more than lip service. It has been two years since the Paris Agreement committed $100 billion per year to developing countries, but those promises remain unrealized.
As we watch China build more than half of the world’s new coal plants and Germany replace wind farms with coal mines, it becomes increasingly difficult to seriously consider the recommendations of the G20, given that they do not adhere to the practices they espouse.
Africa deserves to profit from the assets that lie in its soil and beneath its coastal waters, just as so many resource-rich nations already have. Rather than placing itself at the mercy of foreign aid that may never come, Africa must leverage its holdings to garner the greatest possible reward and wide-ranging advancements for its people.
Achieving the Right Balance
Exxon’s discovery in Angola serves as a case study on the correct course of action for African nations to follow. The generous tax incentives and red tape-slashing industry reforms put in place by Angolan leadership were significant enough to draw the U.S. oil giant’s focus away from South America for the first time in years. Furthermore, Angola’s plan to implement natural gas as a transitionary fuel while investing in solar energy projects and conducting green hydrogen and biofuel research will support an eventual conversion to renewables on a timeline that makes the most economic sense.
The idea that Africa’s oil and gas could remain untapped forever is a fantasy. The collection of our vast resources isn’t subject to debate. It is inevitable. International oil companies will continue to extract petroleum wherever it is available for as long as it is economically advantageous – a timeframe that will likely last decades. The only question is how to proceed. Will it be to our detriment, or will it be a net benefit?
The African Energy Chamber agrees that government corruption should be rooted out and barred from any seat at the negotiating table. We agree every measure should be taken to protect the African environment from harm, but addressing the issues of energy poverty and wealth inequality and ensuring a future where our children can flourish is of equal importance. By following the example Angola has set, welcoming exploration and pursuing mutually beneficial relationships with partners capable of erecting the needed infrastructure, we’ll find ourselves on the best path forward.
The global gas markets are interconnected. As the recently released report from the African Energy Chamber (AEC), “The State of African Energy: 2023 Outlook,” notes, just how closely they’re linked becomes more apparent — and more important — during times of strife, such as the war in Ukraine. Before invading Ukraine, Russia expected to increase its gas production by 800 billion cubic meters (bcm) by 2030, both to expand its presence in the Chinese market and to maintain its European market share. But just as Russia didn’t consider the possibility of a protracted conflict with Ukraine, it seems they also didn’t predict the response across Europe: Many customers expressed their outrage by cutting their imports of Russian natural gas. The significant drop in export volumes to Europe is taking a substantial bite out of Russian revenues, which in turn means that some projects — like developing huge gas condensate resources in east Siberia and the Yamal Peninsula — will be delayed by at least three to four years. The AEC’s latest estimates see Russia’s average production loss at around 140 bcm per year between 2022 and 2030. We’re All Connected As Russian output decreases, global volumes of natural gas are expected to fall in the short term, despite additional production in North America. Prior to 2022, global natural gas volumes were expected to rise marginally higher. But since the invasion of Ukraine, the AEC report indicates a 150 bcm decrease for this year and anticipates a 165 bcm decrease in 2023. The decline over the medium term is even more striking: The average drop in global output between 2022 and 2030 is estimated to exceed 200 bcm per year. Because of Russia’s dominance in the oil and gas industry, we’ll all feel the effects of their decreased production. The resulting squeeze on the global LNG market likely will continue to push natural gas prices higher around the world. Changing Market Partners What’s more, Europe’s attempt to wean itself from Russian gas has put it in a precarious situation. The region still needs huge volumes of liquefied natural gas (LNG) imports to fulfill their substantial energy needs. The chamber’s report anticipates Europe’s LNG demand to increase by 20-40 million tonnes per annum (mtpa) through 2030. Europe, wisely, has been considering multiple strategies to replace the gas it had been receiving from Russia, including more imports from Africa. We expect to see Algeria, Egypt, and Nigeria leading African gas and LNG flows to Europe. This seems like a natural progression. After all, as Africa’s largest energy producers they already supply some natural gas to Europe and have enough capacity to increase production within the next few years. While our report expects to see Africa’s overall natural gas production dip through 2025, LNG exports are expected to pick up in short term in response to Europe’s need. Algeria, for one, is already supplying fuel directly to Spain and Italy through two pipelines across the floor of the Mediterranean Sea. And with overall gas liquefaction capacity of about 75.3 mtpa, this activity could help solve Europe’s energy crunch in the medium term. As I discussed back in August, a few other African countries are pursuing some exciting long-term natural gas developments that seem fit to help Europe free itself from its dependence on Russian gas:As the executive chairman of the African Energy Chamber (AEC), it’s my honor and my privilege to tell the world the story of Africa’s oil and gas industry – to explain what this continent can do to help power the world and fuel its own future. But it’s also my mission to talk about African energy poverty and to explain why this continent needs better access to energy now in order to illuminate its own potential and power forward.
To illustrate the issue of energy poverty in general, I’d like to focus on energy poverty in Nigeria in particular.
Within Africa, Nigeria is an interesting subject. It’s the most heavily populated country in Africa, with more than 200 million citizens. It surpassed South Africa to become the continent’s largest economy about a decade ago, and its GDP topped USD441.5 billion in 2021. It has the largest crude oil reserves in sub-Saharan Africa and is typically the largest liquids producer in the region, though output figures have slumped this year due to problems with theft and sabotage. Likewise, it has sub-Saharan Africa’s biggest reserves of natural and associated gas and is far and away the region’s biggest gas producer.
Nigeria also experiences significant energy poverty, despite these advantages. As noted in the AEC’s recently released report, “The State of African Energy: 2023 Outlook,” consistent access to modern energy services – that is, steady and reliable electricity supplies – is available to only 60% of the country’s population on average, and access rates appear to be significantly lower in rural areas than they are in urban areas. And according to World Bank data, about 99.9 million people, or more than 47% of Nigeria’s population, lived in rural areas as of the end of 2021. That means nearly 100 million Nigerians are living without any true level of certainty that the lights and the electric power that so many in the developed world take for granted will stay on.
I, for one, think they deserve to have that certainty.
They deserve it on human grounds, and their country already has a significant amount of what is needed to provide them with it. And by that, I mean that Nigeria has gas that it could use to generate power.
What Nigeria Has
As I’ve already noted, the country’s gas resources are the largest in sub-Saharan Africa. Nigeria has already been shown to have more than 200 trillion cubic feet (tcf) of gas in proven reserves, and government officials believe that the figure could go even higher, perhaps reaching 600 trillion cubic feet (tcf) following additional exploration.
If that prediction comes true, Nigeria will have the fourth largest gas reserves in the world, behind only Russia, Iran, and Qatar. It will have more than enough gas to meet current demand; it will have enough gas to produce significant volumes of LNG for export while also supporting gasification programs, both on the domestic and regional levels.
But it’s not enough just to have all that gas. Nigeria also needs the means to make use of its gas. Without the proper infrastructure, it won’t be able to put its resources to work and will merely have a scattered collection of raw materials.
What Nigeria Needs
In practical terms, this means that Nigeria ought to have the following:
I’m not suggesting here that it’s the Nigerian government’s job to provide all this infrastructure. But I do believe that it’s Abuja’s responsibility to make sure that this infrastructure becomes available. To this end, I think that Nigeria also needs government bureaucracies that are competent and trustworthy enough to ensure that oil-, gas-, and power-related contracts are only awarded to companies capable of providing the goods and services required within the acceptable parameters.
What Nigeria Envisions
Developing this infrastructure requires the right kind of vision, which Nigeria already has in place: its “Decade of Gas” program is designed to make the country entirely gas-powered by 2030.
When President Muhammadu Buhari rolled out this initiative in March 2021, he indicated that it aimed to make the gas sector the cornerstone of Nigerian economic activity. By the time the “Decade of Gas” comes to an end, he said, the country will have done the following:
Nigeria still has a significant amount of ground to cover before it achieves all of these targets. However, it has made progress. The biggest example of this is the Petroleum Industry Act (PIA), which Buhari signed into law after it passed both houses of the National Assembly. The Nigerian government is also successfully promoting LPG, a gas-derived fuel, as a replacement for wood and charcoal as cooking fuel. (According to NLNG, domestic LPG consumption has climbed by around 1,000% over the last 14 years.)
And as recently as this November, Nigeria moved closer to building its first floating liquified natural gas (FLNG) facility. Nigerian company UTM Offshore signed a front-end engineering design (FEED) contract to design the facility with JGC Corporation, Technip Energies, and KBR. Chief Timipre Sylva, Minister of Petroleum Resources, Nigeria, described the project as a step in the right direction for Nigeria to develop, exploit, and monetize its natural gas.
During the African Energy Week in Cape Town, Amni International Petroleum Development Company Limited, a Nigerian independent oil and gas exploration and production company and the African Export–Import Bank (Afreximbank) signed an agreement for the provision of a $600 million syndicated reserve-based lending facility.
To a lesser extent, Abuja can also claim credit for the headway it has made on the Ajaokuta-Kaduna-Kano (AKK) pipeline, which is being built to bring gas to the northern part of the country. When finished, the pipeline will deliver fuel to gas-powered industrial facilities and feedstock to TPPs with a generating capacity of 3,600 MW. It may also serve eventually as the first leg of the Trans-Saharan Gas Pipeline (TSGP) network, which will allow Nigeria to export gas to Europe via Algeria. Unfortunately, though, the project has been running behind schedule, and the heavy floods that began hitting many parts of the country in mid-2022 have caused additional delays.
In the meantime, Abuja has also moved forward with plans for establishing another gas export network – the Nigeria-Morocco Gas Pipeline (NMGP), a 5,600-km offshore network that would serve more than a dozen West African states. This system would, like TSGP, pump Nigerian gas to Europe, but it would also serve the purpose of delivering the gas to regional markets as well. As such, it would establish Nigeria as a supplier of fuel to much of West Africa.
Thus far, neither NMGP nor TSGP has been built. But Nigerian authorities are working to hammer out agreements on these projects – and they see the ways that European market conditions have changed since the beginning of 2022 as an incentive to work harder and to work faster.
What Nigeria Could Achieve
If they succeed, they will create infrastructure that could do quite a bit to alleviate energy poverty in Nigeria and beyond.
In the case of NMGP, the construction of this pipeline would provide multiple countries beyond Nigeria with a steady source of gas. As such, it would serve as an incentive for the construction of TPPs in places where millions of people do not have access to reliable energy supplies. At the same time, the pipeline’s access to European markets, where buyers are more likely to pay in hard currency, would help ensure the profitability of the whole system.
Likewise, the TSGP network has the potential to benefit Nigeria by ensuring that the country has enough access to hard-currency markets in Europe to cover the costs of the domestic initiatives that depend on AKK – that is, the gas-fired power and industrial projects in the northern part of the country.
Infrastructure Is Needed Throughout the Continent
Of course, energy poverty is not limited to Nigeria; more than 600 million people in Africa lack access to electricity, and nearly 730 million use hazardous and inefficient cooking fuels and technologies. Nevertheless, while each African country is unique, I hope that this look at Nigeria helps shed light on some of the common challenges facing our continent’s countries — a higher rate of energy poverty in rural areas and the tremendous need for infrastructure development.
As “The State of African Energy: 2023 Outlook” points out, even in the four African countries with a universal electricity rate of more than 70% — Egypt, South Africa, Kenya, and Algeria — access to electricity drops significantly in rural areas, to an average of about 63% of the population, compared to an average of 96% in urban areas.
The situation for rural Africans is even more dismal in other parts of the continent. In the Democratic Republic of Congo, for example, only about 19% of the overall population has access to electricity and in rural areas, only 1% of the population has electricity.
This will not change until we develop the necessary infrastructure to deliver energy to Africans throughout the continent.
On the brighter side, Nigeria also gives us examples of measures African countries can take to begin addressing these challenges. No, Nigeria has not achieved its ultimate goal-eradicating energy poverty, but it has plans and initiatives in place with real potential to make a difference — as long as Nigeria continues pursuing them.
If they haven’t done it yet, governments throughout the continent should be developing and implementing multipronged programs of their own to eradicate energy poverty. They, like Nigeria, should be leveraging their natural gas resources. They should be developing and executing gas utilization plans, improving their approach to resource management, monetizing natural gas to help pay for infrastructure projects, and launching more gas-to-power initiatives.
Instead of being daunted by the vast numbers of Africans without electricity, shrugging our shoulders, and giving up, I hope that we will be steadfast in our determination to make energy poverty history by the end of this decade.
For a complete look at our recommendations and “The State of African Energy: 2023 Outlook,” download our report here
When TotalEnergies and Shell separately announced “significant” discoveries of what appears to be commercial quantities of oil and gas offshore Namibia — possibly more than 4 billion barrels of oil in total — it signaled something new for the nation: a chance to monetize its natural resources to combat energy poverty and accelerate economic growth. The offshore deposits — the nation’s largest find since independence — are at peak likely to provide Windhoek an estimated $5.6 billion annually in royalties and taxes and should help the nation double its $11 billion economy by 2040.
The find also demonstrated how well African oil and gas development activity is faring despite repeated efforts to tamp it down. With activist investors trying to stem the flow of international funds into African fossil fuel projects, and major oil companies under pressure to rebalance their portfolios by adding lower emission assets, the Namibia experience is impressive on several counts. The pragmatism of Namibian officials has been encouraging to investors and we hope that pragmatism stays.
It’s also likely a harbinger of things to come for Africa’s upstream energy sector, according to the African Energy Chamber’s (AEC’s) report, “The State of African Energy: 2023 Outlook,” now available here.
The report says investment in African upstream activities (defined as exploration, production, and development) will wrap up 2022 at about $33 billion, then grow as much as $15 billion more over the period 2023-2025 compared to year-end 2021 estimates. In addition to Namibia, greenfield spending — that is, foreign direct investment in new projects — is being driven by Mauritania, Senegal, Uganda, Congo, Mozambique, Ghana, Angola, and Cote d’Ivoire. In 2022, exploration alone was up 130% over 2021.
Deep Pockets
The twin discoveries by TotalEnergies and Shell came three weeks apart, but there are no overnight successes in oil and gas. Exploration by one company or another has been taking place in Namibia for more than 30 years, and first production from the giant find isn’t expected until 2028. Still, while this is the largest discovery to date, it’s just the latest in a series of new opportunities that include a high-impact onshore exploration program by Canadian oil company ReconAfrica (the basin is the size of Texas, and some are saying it could shape up to be the last great onshore oil discovery in the world) and developments by Atlantic Oil & Gas and Global Petroleum — projects the 2023 Outlook describes in some detail.
Could there be better proof that the world isn’t ready to abandon fossil fuels, especially given the push and pull of market conditions and the fact that renewables, while desirable, aren’t ready to replace hydrocarbons quite yet? And could there be more evidence that the “last frontier” fields onshore and offshore Africa are considered a fruitful alternative to the world’s legacy basins whose productivity is waning?
True, COP26 and its international fossil fuel finance bans took the wind out of certain sails. Lack of investment has delayed some projects and suspended others during the last year. But even climate agreements haven’t kept the United States International Development Finance Corporation (DFC), one of the primary funders of all types of overseas energy projects, from plowing far more support into African oil and gas development than into renewables. The Guardian recently reported that DFC and Exim — the Export-Import Bank of the United States — have invested more than $9 billion in hydrocarbons compared to just $682 million in wind and solar, Together, they have bankrolled oil facilities in Senegal and Equatorial Guinea and invested in an Egyptian gas pipeline. And in 2019, Exim agreed to provide a $4.7 billion loan to finance a project in northern Mozambique overseen by TotalEnergies.
The truth, plain and simple, is that the world needs more energy. And Africa needs it even more than most.
Powering Progress
Africa is ripe for increased energy development, hydrocarbons, and renewables alike, especially as the continent undergoes dramatic demographic shifts, chiefly staggering population growth, sustained urbanization, and greater industrialization. Consider this: In 1950, less than 10% of the world’s population lived in Africa, but by 2050, that figure will be closer to 25%. Between now and then — less than 30 years — the populations of more than half of Africa’s nations are expected to double. In real numbers. This means Africa will be home to 2.5 billion people by 2050, and its urban areas alone will have added 950 million people. In fact, Africa’s cities are the fastest growing on the planet. Generally speaking, that’s good news. City life is associated with better economic outcomes for individuals as well as higher standards of living: greater access to education, jobs, services, infrastructure, and electricity. Progress in cities far outpaces rural areas by just about every metric.
Of course, it takes a lot of energy (and money) to power progress. Experts say energy demand in Africa is expected to be 30% higher over the next two decades (by contrast, global demand will only grow 10%), meaning it will easily outstrip supply. And although Africa has about 60% of the world’s best solar resources, its 1% installed solar capacity isn’t likely to keep many lights on or factories running. No wonder we’re seeing the kind of uptick we are in upstream activity.
Sub-Saharan Opportunity
While oil is still in play, much of the focus has pivoted to natural gas, which is considered a cleaner, even “green” fuel, even by the most ardent hydrocarbon proponents. Today, analysts believe that countries with significant gas production could expect their gas reserves to be more resilient under various energy transition scenarios than their oil reserves.
What does that mean for Africa? As discussed during African Energy Week in Cape Town, the 2023 Outlook notes that the continent holds more gas potential in the medium term than oil; more than 700 trillion cubic feet (tcf) of natural gas resources have been discovered in Africa but are yet to be approved for development. Many of these discoveries are planned to be developed as liquified natural gas (LNG) projects. In fact, most of the gas projects sanctioned in Africa are related to supplying LNG either within Africa or to markets like China and Europe, which is diversifying away from Russian gas. With the exception of developments in Libya, the LNG projects are largely in sub-Saharan Africa. As such, this is where CAPEX spending is centered. The AEC report estimates that 80% of the 2022 – 2025 cumulative greenfield spending from Africa is expected to come from sub-Saharan projects.
While some decry those investments because they generate energy for export outside the continent, government officials say their economies — and, therefore, their citizens — depend on resource wealth. And intraregional trade within Africa is destined to grow, especially as investment increases in gas infrastructure required to support domestic industrialization — pipelines, processing facilities, and LNG regasification plants, and the like.
A Template for the Future?
Regardless of whether they’re onshore or offshore, the Namibian discoveries aren’t just important — they’re transformational. ReconAfrica’s huge, conventional oil play is already providing well-paying jobs to 200 people from the Kavango region, where 40% of the people live in generational poverty, and local hiring is expected to continue as the project advances. The company has also made it a priority to provide clean water to the region; they’ve drilled four water wells and have permits for 16 more.
And, as we’ve seen time and time again, in the energy business, success breeds success. In this case, Namibia shares the same geological sedimentary basin with South Africa — and Shell, TotalEnergies, PetroSA, Sezigyn, and Impact Africa all hold exploration acreage in the South African sector. South Africa needs to move with a petroleum legislation immediately and ensure stability so more investment can come into the country. The hydrocarbon potential of the region is tremendous, suggesting the economic potential is as well — as long as development is allowed to continue.
By now, I’m certain that many of my readers are quite aware of the massive economic potential of Africa’s natural oil and gas reserves. Many African countries sit upon an inordinate layer of abundant energy that stands to bring prosperity to its people, the country, and even the global community as a whole.
But as many energy titans and political leaders in the world begin to turn their attention toward renewable energy sources, African countries will have to have their own solution that can be brought to the global table.
Although there is great potential for African countries to leverage their abundant energy resources, the continent’s unique and varied geographies also offer significant opportunities in the developing renewable energy sector as well.
In the interest of presenting both sides of the situation, I thought it would be prudent to explore some of the best renewable energy choices for African countries as the world accelerates its transition toward renewable energy.
In particular, we’ll talk about the potential for Africa to develop strong programs for both wind and solar energy.
Wind power is a unique source of renewable energy that stands to benefit many areas of the world that don’t have access to electricity. But as a technology, it presents challenges to overcome in both African countries as well as many others around the world.
Of course, the first issue with wind power is simply having the installation built in an area that will capture energy from regular windy patterns. For this reason, wind power is often discredited as only being able to provide “intermittent” power, as it’s largely contingent on the weather conditions in that area.
While true, this isn’t an entirely fair criticism of wind power — as consistent hydroelectric power is also determined by the regular flow of water, which is often contingent on rain and snow patterns in the surrounding area.
Thus, like most renewable energy initiatives, the success and viability of wind power in Africa will be determined by science’s innovations in energy storage. Battery technology and energy storage today is leaps and bounds beyond what it was even 10 years ago. At our projected rate of development, it’s not unreasonable to expect our ability to efficiently store energy to greatly improve in even the next five years.
This will help pave the way for more successful wind farm installations, as there will be little to no waste from the energy they generate.
Speaking to Africa specifically, there are already several countries exploring wind farm projects and generating GWs with high reliability. According to an April study by the International Renewable Energy Agency (IRENA), Morocco, Egypt, and South Africa have already installed more than 1 GW of wind energy capacity.
There will be economic hurdles to overcome in installing further wind energy projects across Africa, including the cost of building the power lines that will take the captured energy to countries that need it most.
Wind energy does uniquely serve as a strong counterbalance for solar’s daytime energy capture, as most high winds in Africa blow through the night.
While wind energy is an emergent opportunity for any country looking to develop more renewable energy programs, solar is currently the renewable source with the most proven success and rapid innovation.
In a publication from the WEF (World Economic Forum), the solar energy potential in Africa is quite significant. Studies have been conducted globally that aim to determine the average potential of solar energy around the world, and many believe that Africa could well lead the charge.
When it comes to measuring solar energy potential, the figure of 4.5kWh/kWp (kilowatt hours/peak power) per day is described as excellent conditions for solar power.
Deeper investigation reveals that Africa’s average long-term yield for a solar energy installation is 4.51 kWh/kWp per day — just above the threshold for excellent conditions.
From a natural resource perspective, Africa has no shortage of sun to harness for electricity. Solar panel installations have also greatly grown in efficiency and could unlock energy potential and transformation for African countries that need it most.
The greatest obstacles to overcome will be regulatory, as not every African country has the right economic and political climate to accept such a large-scale renewable energy installation. It is partly for this reason that a just transition toward renewable energy will need to be pursued gradually and incrementally, as many African countries rely on their existing natural resources for energy.
The right direction for the “many” is not always the right direction for the “few,” and vice versa. It’s difficult to make large-scale prescriptive decisions that affect an entire global community and may even create new problems in the process.
However, this phenomenon is no reason not to pursue a common goal together. The world is expressing greater demand for renewable energy, and I believe that African countries will have a great role to play in that initiative. 
Wind and solar energy are just two of the renewable sources that Africa can bring to the table, but it will take time to work toward that end hand-in-hand with world leaders.
In the meantime, I believe that we ought to leverage the resources that we possess currently in-hand while we work proactively to develop our solutions for the future
By NJ Ayuk, Chairman, African Energy Chamber
While the consensus opinion of the western elites may be that oil and gas is a dirty, outdated technology staggering on its last legs, the African Energy Chamber remains grounded in reality.
As proponents of a zero-carbon future tout the promises of solar, wind, geothermal, and hydropower – depicting a world free of emissions yet somehow exponentially more electrified than it is today – the global oil and natural gas industry is certain that fossil fuels will continue to play a major role in powering the earth for decades to come.
If a fully sustainable energy future truly awaits us, however far off it may be, oil and gas will undoubtedly continue to fuel our journey toward it just as petroleum-based materials will remain central to its development. Hydrocarbons will continue to provide heat and generate electricity as we assemble turbines, solar panels, and electric vehicles from components made of plastic.
The fact that legacy oil fields diminish in productivity over time doesn’t mean we should abruptly halt all production in the name of climate change and learn to manage with what little output renewables currently offer. Such an ill-advised decision would constitute a veritable death sentence for the developing world, if not most of society.
New Players on the Field
As noted in our recently released report, The State of African Energy: 2023 Outlook, untapped discoveries, both onshore and off, practically encircle the African continent, and several new oil and gas economies stand ready to come online, stepping up into their rightful place on the world stage.
In 2022, one month after Shell announced an oil discovery off the coast of Namibia, the TotalEnergies discovery in the Venus-X1 well in block 2913B in the Orange Basin became the region’s second significant find for the year. The discovery is estimated to be more than 1 billion barrels of oil equivalent (BOE) and represents the southern African nation’s first opportunity to become an oil producer. Operations in the region are underway, and production is expected to begin in 2026.
On the eastern coast, Mozambique’s recent entry into the natural gas industry has set the impoverished country on a new path toward economic development. With discoveries made in the Rovuma Basin projecting annual liquefied natural gas (LNG) output in excess of 30 million tonnes, Mozambique’s LNG industry has secured $55 billion in investments, quadruple the value of the nation’s GDP. A quarter of the LNG produced will be reserved for domestic use while revenue from exports will add $10-$14 billion to their GNP each year.
Moving south, the Brulpadda and Luiperd discoveries off the coast of South Africa’s Mossel Bay are estimated to hold more than 2 billion barrels of gas condensate – an amount that would set South Africa’s total petroleum resources at approximately 9 billion barrels of oil and 60 trillion cubic feet of gas. Such figures would dramatically transform the national economy by covering more than half of the country’s current energy demands and slashing its reliance on imports. Successful development of the Brulpadda and Luiperd sites will inevitably lead to further exploration, capitalization, and investments toward much-needed infrastructure, providing welcome relief from South Africa’s economic troubles.
When Samia Suluhu Hassan took office as Tanzania’s first female president, the change in leadership led to revived negotiations between the government, Royal Dutch Shell, and Norway’s Equinor regarding the development of the country’s offshore LNG reserves.
Discovered in 1974, the sizeable reserves remained untouched mainly due to political stagnation, but the new administration has managed to arrange for a project construction start date in 2023. In addition to attracting outside investment, job creation, export revenue generation, and providing a supply of domestic energy, the Bank of Tanzania estimates that this project will single-handedly increase the nation’s economic growth rate by 2%.
Recent discoveries in the Senegal-Mauritanian basin have proven that the region sits atop more than 1 billion barrels of oil and 40,000 billion cubic feet of natural gas – designating the find as one of the petroleum industry’s largest to date.
In an effort to appeal to foreign investors, both Senegal and Mauritania have taken steps to facilitate the establishment of offshore operations in the area. Senegal’s Plan for an Emerging Senegal (PES) commits billions to infrastructure, including airport, highway, and rail improvement projects and the construction of a deepwater port in the capital city of Dakar.
Mauritania has revised its previously prohibitive regulations, developed a gas master plan, and designated the port city of Nouadhibou as a hub for gas processing and international trade.
A Healthy Compromise
Africa cannot be deprived of this long-awaited opportunity for economic growth. An adjustment to the oil and gas industry’s focus – from elsewhere in the world to Africa – will create jobs, business and monetization opportunities, infrastructure improvements, and a diversification of national economies.
Governments across Africa will collect massive increases in revenue. The spread of reliable and affordable electricity across the continent will rectify widespread energy poverty issues. Schoolchildren will find all new educational opportunities, and the overall quality of life in Africa will significantly improve.
As nations across the globe work to transfer their energy dependence from fossil fuels to renewable resources, the same cannot be expected from Africa, at least not on the same timetable.
For more than a century, Asia, Europe, the Middle East, and North America have reaped the economic and technological rewards that this head-start has given them. Africa will require time to catch up but can offer much support to the global energy evolution in the meantime.
Between 2026 and 2030, Namibia, South Africa, Mozambique, Tanzania, and the Senegal/Mauritanian region will be capable of producing a million barrels of oil per day (boepd) and 2.5 million boepd over the following decade.
This production rate will initially account for 8% of Africa’s oil and gas output, increasing to roughly 20% of its total production between 2031 and 2040.
Any impact on climate change brought about by an increase in African oil and gas production, if not balanced by emissions reductions in more developed countries, will be minimal compared to what the world has already accommodated. The African Energy Chamber stands by these nations as they prepare to benefit from their natural resources, and we are excited by the prospect of contributing to the transition to a sustainable and prosperous future for all.
Vilifying fossil fuels seems to come easily to many people these days. That includes UN Secretary General António Guterres, who recently associated them with war, pollution, and climate catastrophe. The only true path toward peace in the 21st century, he said, is an accelerated renewables-based energy transition, and African gas exploration be damned in the process. In fact, he claimed that exploring for gas and oil anywhere in the world is “delusional.”
That’s pretty strong language from a man whose native Portugal produces 4.34 metric tons of CO2 emissions per capita – more than twice that of Brazil, which has 20 times more people, and more than five times the per capita total of the entire continent of Africa.
Don’t get me wrong: the African Energy Chamber absolutely supports renewables. To meet the climate targets set out in the Paris agreement Africa must radically change its energy landscape, and that means increasing our renewables capacity.
But when Guterres and others call for an immediate or even rapid energy transition, they are forgetting that a one-size-fits-all solution isn’t possible. As we point out in our recently released report, “The State of African Energy: 2023 Outlook,” many factors determine the pace of energy transition in each individual country: its current dependence on fossil fuels, its existing industrial productivity, its future technology choices, the depth and diversity of its domestic supply chains — and, of course, its current renewables generation capacity. In that regard, Africa is a small fish in a big pond. Asia, Europe, and the United States all have considerably more investment in renewables than we do, whether we’re talking about solar PV or onshore wind power. In fact, as our 2023 Outlook notes, Asia, Europe, and the United States are the top three producers of solar and wind power, with about 90% of total overall volumes. By contrast, Africa’s volumes are a mere 1% – 2% of the total.
Does that mean we have a long way to go? It does, and parity with Asia, Europe, or the U.S. isn’t something anyone can reasonably expect. Their head start is just too significant and asking us to catch up anytime soon is, dare we say, delusional.
But it’s not impossible for Africa to build on its modest achievements. In fact, while our capacity to produce renewables is currently in the moderate range, our 2023 Outlook expects it to expand, spread across the continent, and also venture into hydrogen. Projections are that by the end of the decade, Africa’s renewables capacity will be 150GW. That’s five times what it is right now — which looks like progress by any measure.
Where We Are Now
To understand where we’re headed — and how we’ll get there — we have to recognize where we are.
The 2023 Outlook forecasts that by year-end 2022, Africa’s solar PV capacity should be about 12.6GW (or 2% of global volume. Onshore wind capacity will be at 10GW (1% of global volume), and hydrogen at sub-0.5GW (<0.5% of global volume).
Next year, though, the numbers start looking considerably rosier. Total capacity is expected to increase to 80GW in 2023, with solar PV and onshore wind projects mainly in Egypt, South Africa, Morocco, Algeria, and Ethiopia driving 80% of the total. Solar PV and onshore wind capacities are expected to gradually increase going into the next decade and considerable hydrogen capacity is expected to kick off by 2025 – 2026 with projects in South Africa, Egypt, Mauritania, Morocco, and Namibia.
Of course, when you’re starting at 1% or 2%, even a five-time growth in renewables capacity is a small contribution to the world’s total in real numbers, especially when everyone else’s portion is growing, too. Some might even say it’s insignificant. However, any type of growth reflects Africa’s willingness to do the heavy lifting, to adopt “modern” forms of energy — even though oil revenues fund many national budgets and access to reliable electricity is shrinking rather than increasing. It also indicates confidence in the continent’s ability to attract investment to its renewables sector. That’s an area that has faced a number of challenges in recent years.
Investments Have Fallen Short
Among the factors that have historically constrained the African renewables energy segment is the absence of robust regulatory and legal frameworks; without them, investment in renewables has been more expensive than it could be. But not all of the problems are internal: although public financing for hydrocarbon projects outpaces that for clean energy by four to one, Africa has received only 2% of global public renewable energy investments in the last two decades. (And the world wonders why we’re behind.)
China, which has long backed traditional energy infrastructure but is moving to finance clean and renewable energy technologies, is likely to increase its presence in the market, especially as it seeks new solar projects, an area where they lead the world. Between 2008 and 2020, 20% of Chinese policy bank energy financing went to Africa, in the form of loans for fossil fuels (coal, oil, and natural gas) and – to a much more limited extent – renewables like hydropower, geothermal, solar, and wind projects.
As for the European Union, in 2020 the EU allocated only €82 million for renewables projects in Africa through the European Fund for Sustainable Development (EFSD).
European investment is expected to grow even more now but not necessarily where we might have seen it even a year ago: Despite clamoring for a global carbon-neutral energy future, the EU may be targeting African natural gas as it seeks new solutions to meet its energy demands in light of the war in Ukraine. Yes, natural gas is a fossil fuel, but the EU has rightfully cloaked it in green: earlier this year, the EU decreed that natural gas is a clean transitional fuel and investments in it are to be considered equivalent to investments in solar, wind energy, and the like. That can easily be read as a sign that they view African gas as sustainable, at least for the sake of their collective conscience. The EU is also looking to Africa as a source of hydrogen, which the EU needs if it is to decarbonize its industrial base. Europe lacks the space and sunshine to produce enough green hydrogen from renewable energy, but Africa has both of those elements in abundance.
What We Need Now
The course of the African energy transition received a major boost from The World Bank earlier this month when the group approved South Africa’s request for a $497 million project to decommission and repurpose the Komati coal-fired power plant using renewables and batteries. World Bank said this is a demonstration project that can serve as a reference on how to transition fossil-fuel assets for future projects in South Africa and around the world.
A portion of project financing will be devoted to creating economic opportunities for local communities, which is expected to benefit approximately 15,000 people.
There’s no understating how meaningful this is.
Still, public financing isn’t the only answer to increasing renewables capacity in Africa. It might not even be the best answer.
As the Atlantic Council said, Africa possesses an abundance of opportunities to tap into renewable energy, a dynamic demography, and vibrant economic prospects. What it needs are significant private-sector investments.
The 2023 Outlook notes the entry of private renewable energy investors like CWP Global into the African market. Right now, solar power producer Scatec, renewable energy players including Masdar and Hassan Allam, and the renewable energy-focused wings of E&P players like TotalEren, are working with various governments to bring renewable developments to the continent. The Mauritius-based Africa Renewable Energy Fund (AREF) is actively investing in small hydro, wind, geothermal, solar, stranded gas, and biomass projects across Sub-Saharan Africa (excluding South Africa).
The fact that green power is in Africa’s future is not up for debate. The potential is high and because renewables facilities are by nature more decentralized than other types of power plants, they may hold the key to getting people connected to the grid more easily.
But as “The State of African Energy: 2023 Outlook suggests, change can’t happen overnight. Africa can’t shut down the economic engine of fossil fuels without revving up its renewables first. That will take time, support, and money — and the ability to put our own needs and our own people first.
Africans at COP27 and beyond need to pay critical attention about Africa’s position as a key source of critical minerals. Climate change and energy poverty are two sides of the same coin.
How about during this COP27, Global leaders push to process Africa’s minerals in Africa. Let’s not forget, Africa is blessed with some of the world’s largest reserve of metals and minerals needed for batteries, including lithium and cobalt, making the continent a key supplier for the global energy transition. At this COP27, the African Energy Chamber believes when we process these minerals in Africa, we rapidly eliminates emission-spewing shipments of the continent’s minerals and commodities.
As the entire global transportation marketplace marches toward an increasingly electrified and battery-powered future, many countries across the African continent stand at the threshold of profound economic opportunity. Now is the time to take action and decide whether or not Africa steps across it.
Countries around the world are encouraging their citizens to transition to electric vehicles (EVs) for both transportation and shipping. In many cases, governments are mandating their adoption by setting firm dates for total bans on gasoline-powered cars and trucks. Considering these circumstances, demand for EV batteries and the raw materials used in their manufacturing process will likely increase exponentially in the years ahead.
Africa supplies a significant portion of the metals critical to producing the lithium-ion batteries that power EVs — namely cobalt, manganese, and phosphorus, and, to a lesser extent, lithium, iron, copper, and graphite. Unfortunately, African mines export most of the minerals extracted to Europe and China, where much of the work that adds to their value takes place. Processes such as beneficiation — the treatment of raw, mined materials to improve their physical or chemical properties — and the smelting and refining that occur before EV battery assembly can’t be performed in Africa because there’s no infrastructure for it.
To begin the process of building the required infrastructure, African countries should move closer toward a thorough capitalization of their mineral resources. As noted in our newly released report, The State of African Energy: 2023 Outlook, “They can benefit from value-creation investments by developing the right market to support local demand for these metals, the right infrastructure to create an industrialization ecosystem, and the right capital markets to stimulate the much-needed investments across the battery value chain.”
Stepping Into a Larger Role
Ongoing developments both in Africa and abroad have the potential to bring the concept of a fully integrated African EV value chain into reality.
The first of these developments is the war in Ukraine.
Russia holds a sizeable market share of the global metal production industry. The country is a net exporter of aluminum, copper, pig iron, direct reduced iron, iron ore, and nickel. Russia also produces 37% of the world’s palladium supply and 11% of its platinum – metals essential to the worldwide production of catalytic converters. Focusing specifically on EV components, Russia also produces 17% of the global supply of high-purity nickel used in battery manufacturing and 4% of global copper – amounts that establish the nation as one of the world’s most prominent metal suppliers.
Russia’s invasion of Ukraine caused numerous countries to impose import bans on Russian commodities. International companies, independent of their home countries, also initiated “self-sanctions” on Russia by withdrawing their operations from the nation or restricting the sale of their goods within its borders. While the United States and the European Union have yet to announce any sanctions on Russian metal, this status could change in the near future as the continued tensions in Ukraine do not suggest any coming de-escalation.
Africa could potentially fill the gaps left by a Russian absence from the global mineral supply chain. South Africa, Zimbabwe, and Madagascar can collectively supply iron ore, nickel, and the platinum group metals, while Zambia and the DRC can provide copper. Africa’s own demand for Russian imports of steel and aluminum could be affected by sanction-induced complications. Investing in African infrastructure and developing a domestic supply chain would add diversity to the global metals trade and safeguard it against any future political upheavals or military conflicts.
Homegrown Transportation
Another promising development is Africa’s burgeoning EV industry. Rwanda and Ghana have declared their intentions to make the transition from gasoline-powered vehicles to EVs, while Rwanda and Kenya have committed to incentivizing domestic production. Egypt aims to produce 20,000 EVs per year beginning in 2023. Namibia has a goal of 10,000 EVs by 2030, and South Africa expects to see 2.9 million by 2050.
While much of the conversation about EVs pertains to four-wheeled cars, motorcycles and tuk-tuks have always been more popular transportation options in Africa. The global EV market recognizes this preference. In 2021, 44% of all two- and three-wheeled vehicles sold were electrically powered. Previously, Africans had no choice aside from imported e-bikes and trikes, but now companies like Lagos-based Metro Africa Xpress (MAX) are manufacturing them at home. MAX’s newest model, the M3, is a low-cost, long-range motorcycle capable of carrying heavy loads. MAX expects upwards of 70% of sold units to serve as commercial taxis.
Local Demand Leads to a Local Supply
This increased level of EV adoption, whether brought on solely by consumer choice or encouraged by government policy, will inevitably bring about increased demand for EV batteries. This demand could be satisfied by domestic mining and manufacturing — two links in a larger, fully African EV value chain.
The ratification of the African Continental Free Trade Agreement (AfCFTA) primed industries across the continent to establish a network that could leverage the expertise and resources of its individual members to create an EV battery manufacturing chain capable of servicing the needs of both African and global markets. Proceeds from this arrangement could fund enhancements to African infrastructure — an evolution that would, in turn, attract further international investment.
To properly seize the opportunities in front of us at present and to ensure the success of this endeavor, it is imperative that we acknowledge past mistakes and current conditions. An undertaking of this scale will require collaboration between governments, cohesive policy agreements, and uniform tax incentives. We cannot progress without commitments to improve roads, expand ports, and provide reliable and affordable electricity. We must also address the glaring workers’ rights issues affecting the subcontracted miners currently laboring at the foundation of this proposed value chain.
If we can work together to resolve these complexities, Africa will be ready to step into a bright, sustainable, and profitable future.
I arrived Sharm El Sheikh for Cop27 to stickers bearing the circulating arrows emblem of sustainability. The city appears to be in tip-top shape. I listened to the speeches at the opening ceremony of COP27 noting that Africa faces a quandary: The continent is seeking to eradicate energy poverty and create a better future for our people with a known solution that developed countries have exploited for centuries, namely fossil fuels. Yet many of those very countries are now standing in Africa’s way.
Rich Western forces, especially in Europe, have been pushing for an immediate shift away from fossil fuels, and their pressure is impacting Africa’s oil and gas industry. We’re already seeing investments in new oil and gas projects dwindle and one announcement after another about majors divesting African oil and gas assets. New developments, especially of our vast, newly discovered natural gas reserves, remain under threat.
What Western proponents for a rapid energy transition are ignoring is the role fossil fuels can play in bringing reliable energy to the hundreds of millions of Africans who now go without it, not to mention fossil fuel’s potential to pave the way for industrialization, economic growth, and greater stability for our people. At the same time, Western activists conveniently forget that they have used — and continue to use — fossil fuels to expand their own wealth and energy security.
In fact, as the war in Ukraine and subsequent cut-off of Russian energy supplies to the EU has shown, in the coin toss between energy security and environmental causes, even for Europeans, energy security wins.
It is interesting to note that as European households face higher utility prices amid a bleak winter outlook for power and gas supplies, the EU’s answer to reducing dependence on Russian fossil fuels is to source alternative providers and bring in additional liquified natural gas (LNG) imports – not to ramp up its green solutions.
The African Energy Chamber’s (AEC) recently released report, The State of African Energy: 2023 Outlook, notes that this quest has actually softened the stance of Europe and its allies to stop financing African fossil fuel development – at least for now.
We feel for Europe. We know what it’s like to lack access to reliable and affordable energy. We also know we’re every bit as deserving as it is of a just energy transition that factors in our unique needs.
Expanding Africa’s Energy Mix
At its core, this issue is a matter of basic human dignity. Just consider the 600+ million people in sub-Saharan Africa who lack access to electricity. Would their lives improve by guaranteeing them the energy that Westerners take for granted every single day? Absolutely. Would providing clean, modern energy sources for cooking reduce indoor air pollution? Of course. Could this help eradicate disease and premature death in some of the poorest areas? Certainly.
Energy poverty is one of the continent’s biggest impediments to inclusive economic growth. To eradicate energy poverty, the AEC estimates that Africa’s electricity generation needs to reach 2,586 terawatt hours (TWhs) by 2040, which equals an annual increase of 5.8% in generation capacity. This is a huge volume that will require concerted effort and massive investment in ALL energy resources at our disposal. We need a healthy balance. As the State of African Energy: 2023 Outlook suggests, Africa must be allowed to leverage a multi-resource approach, which upholds the well-known principle of diversification and includes natural gas.
Natural gas is a crucial fuel choice for any decarbonization pathway for the continent. It can get us closer to energy independence and environmental sustainability in pursuit of global climate goals.
African governments must push back on the attempts by certain global interest groups and financiers to prohibit us from making the best choices in our energy transition. Because a just and equitable energy transition for Africa must include natural gas.
Natural gas can be monetized to generate revenue while serving as a feedstock for chemical and fertilizer manufacturing, creating even more opportunity and revenue. Gas-to-power projects could make a tremendous difference in Africa — but gas-fired power plants are only built when oil and gas revenues are strong.
Self-Reliance in Financing?
As we expand our natural gas usage as a bridge to a greener future, we continue to explore solutions to finance these efforts.
The State of African Energy: 2023 Outlook highlights how this is demonstrated in national energy plans and targets, including how countries deliver on their Nationally Determined Contributions (NDCs), that is, their commitment to reduce greenhouse gas emissions and adapt to climate change.
It is estimated that Africa needs USD250 billion each year until 2030 to be able to implement its NDCs under the Paris Climate Agreement. Unfortunately, so far this isn’t happening, in large part because the international community that pledged billions of dollars for climate finance to developing countries has not kept its promises.
This leads us to believe that Africa cannot rely on international partners. We must spearhead our own energy strategy, one that involves significant collaboration in joint strategy formulation, financing, and communication with our neighbors. Now that Western finance institutions and countries have been reluctant to invest in African oil and gas, the AEC has been working to develop home-grown solutions to the challenges of financing our projects, like the African Energy Transition Bank.
The AEC is also fighting for fair financial instruments because we recognize the futility of piling on debt for already struggling developing economies. Instead, we need to expand tailored investment vehicles that open and broaden access to green projects.
African Solutions on African Timetables
Don’t misunderstand: I’m a big proponent of renewable energy. Renewables offer tremendous promise — for Africa and for the entire world. And I’m delighted to see how the continent is embracing green technology: Africa’s 68% share is already higher than the global average and other regions, including North America and Europe.
But I’m an even bigger proponent of Africa and her people. And without the revenue, jobs, and capacity-building opportunities of a thriving oil and gas industry, many African economies stand little chance of affording the billions of dollars necessary to develop the infrastructure we need to shift to renewables, and Africans are much less likely to fully capitalize on the jobs and economic opportunities that renewable energy industries can deliver.
The transition to renewable energy will happen. And I’m excited about Africa’s prospects when it comes to renewables. What I’m not excited about is the pressure from lobbying groups in rich Western countries to implement our transition on their timeline.
African nations have just as much right to develop a robust energy industry that includes oil, gas, and renewables as the wealthy Western nations who have done – and continue to do – the same.
For an Africa that serves its people and provides them with jobs and opportunities, we need to be better at empowering the next generations, embracing our diversity...
Learn More
By the Fall of 2019, NJ is releasing his new and second book, "Billions at Play: the Future of African Energy". The book will set a new foundation to discuss major issues facing Africa's energy sector.
View All Media
Through his speaking engagements on the international stage, NJ's presence is in the most important boardrooms.
As a seasoned lawyer and business advisor, NJ has negotiated Africa's biggest energy deals and been a mentor to dozens of entrepeneurs and start-ups.
Through leadership and frequent publications, provides insights and thought-provoking ideas into what will make Africa and its citizens the leaders of the 21st century.
Through his speaking engagements on the international stage, NJ's presence is in the most important boardrooms.
As a seasoned lawyer and business advisor, NJ has negotiated Africa's biggest energy deals and been a mentor to dozens of entrepeneurs and start-ups.
Through leadership and frequent publications, provides insights and thought-provoking ideas into what will make Africa and its citizens the leaders of the 21st century.
Learn more v
NJ Ayuk's work has international coverage.
"NJ Ayuk, The 38-Year-Old Attourney Who Runs One Of Africa's Most Successful Law Conglomerates"
