Oil and Gas Companies Can Fuel Economic Growth, Stability, and Improved Quality of Life in Africa
There is a way for African countries and societies to get the most value from their resources and, in doing that, making a positive impact in the world. Greater female empowerment, better governance, and more responsive national oil companies are just three of the tools that NJ Ayuk, the Executive Chairman of the African Energy Chamber, recommends.
In his most recent bestseller, Billions at Play: The Future of African Energy and Doing Deals, NJ Ayuk, a leading authority in the African energy sector and a strong advocate for African entrepreneurship and the indigenous energy sector, makes a case for how energy can and must work better for Africans. In doing so, it will also shape a better future for the entire humanity. Below you’ll discover four ways in which oil and energy in Africa is good business for the whole world.
1. Africa could take the lead in stopping global warming.
Although they have different ideologies, cultures, and lifestyles, many people around the world are connected by the common goal of stopping global warming. Our survival as a species depends on our cooperation and mutual support. An intra-African energy-trading model where African countries should be able to depend on one another for the supply of energy can play a crucial role in attaining our mutual goal.
Africa is in an ideal place to lead the charge in creating a sustainable oil and gas industry, while also creating a leading renewable energy sector. The renewable energy potential is virtually unlimited, and the leapfrog technologies developed on the continent are lighting the way forward for renewables around the world.
NJ Ayuk, the Executive Chairman of the African Energy Chamber, foresees a cultural shift where oil and gas companies transition to energy businesses that will invest in renewables in Africa. It is a shift that every player in the billion-dollar energy industry needs to take a closer look at.
2. New models for managing petroleum revenue can help spread the wealth equitably.
Africa’s time to grow and develop is here, and its natural resources can help fund it. New models for managing petroleum revenue can help spread the wealth equality and make clean energy more accessible to people in rural communities or impoverished areas. By being honest and moving rapidly to establish stable regulatory frameworks, the authorities will create innovative business environments capable of attracting investment.
The oil and gas companies are shifting into becoming “energy companies.” The big players in the industry are rebranding—Statoil became Equinor and diversify their portfolios to include renewable energy assets. Those pointing their fingers at the oil and gas companies need to remember that they are businesses focused on profit as well as the sustainability of the business itself. In other words, it means that these companies adapt to the needs of the economies they are a part of.
With an infrastructure already in place and funds to invest in research and development of new renewable resources technologies, the big players in the oil and gas industry are better funded and placed to drive the energy transition that Africa and other countries seek. Also, bringing energy companies, governments, and civil society groups together to find functional solutions will achieve much more.
3. The energy sector holds great potential to revitalize the African economies and support their growth and development.
African nations put together have polluted seven times less than China, thirteen times less than the United States, and eighteen times less than Europe since the beginning of the industrial revolution. The African Development Bank has estimated that between $130 and $170 billion a year in the run-up to 2025 would be needed to close the infrastructure gap across the continent. In his book, Billions at Play, NJ Ayuk explains how cooperation amongst the African nations and leveraging the continent’s abundant gas resources can help to raise these funds.
If African governments, businesses, and organizations will manage Africa’s oil and gas revenues wisely, they will be able to make meaningful changes across the continent. Africa can generate cleaner, greener, cheaper energy sources and create jobs that can put the dollars back into the global economy.
Africans are more than capable of making their continent successful, but they need to partner up with companies that are willing to share their knowledge, technology, and best practices. NJ Ayuk is a strong advocate for American investment in Africa. The Executive Chairman of the African Energy Chamber sees it as an opportunity for the American business sector to get in early and help Africa grow and prosper, which ultimately will benefit the U.S. investment sector. American investors will reap the rewards while conducting a fair trade business and paying fair wages.
4. Africa’s gas resources can foster unprecedented African economic growth.
Today, natural gas is by far the most economically sustainable way of producing power in enough quantities to fuel economic development in Africa. Petrochemical plants represent a massive economic opportunity to produce byproducts from oil and gas with a higher value within the supply chain but also to create jobs, develop infrastructure, and generate wealth. Refineries, too, have a positive impact on curbing the need for fuel imports. All of these are fundamental pieces of the puzzle that will foster Africa’s economic growth and promote the betterment of the lives of its people.
LNG is becoming a priority for Africa’s emerging natural gas sector. This odorless, colorless, non-toxic, non-corrosive natural gas (predominantly methane with some portion of ethane) has been cooled to liquid form for ease of storage or transport—often by barge—to locations where pipelines are not practical or economical to build. Once LNG arrives at its destination, it is re-gasified and distributed, typically via pipeline. According to NJ Ayuk, there is evidence throughout the continent that natural gas—more specifically, LNG—might be the answer, both to boost the African energy sector and to help individual countries.