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Africa: Natural Resources Key for Sustained Economic Growth

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Africa is on the precipice of both an energy sector and economic transformation, with the continent making accelerated efforts to develop its immense resources. Driven by the continent’s growing demand for energy, and the increased capacity of local service companies in resource-rich countries, Africa is committed to using its natural resources as a catalyst for sustained economic growth. In the face of the COVID-19 pandemic, this trend has become increasingly more important, especially if Africa is to eradicate poverty by 2030. Yet, unilaterally formulated climate mitigation objectives often fail to consider the adverse effects this agenda has on developing countries. With the number of people without access to electricity threatening to increase with the pandemic, the need for a balanced, inclusive, and multilateral approach to climate change mitigation has been noted.

With the aim of discussing key challenges and opportunities relating to global action in tackling climate change, specifically in the context of sustainable development and poverty alleviation, the Organization of Petroleum Exporting Countries (OPEC) Secretary General, H.E. Mohammad Sanusi Barkindo, held a virtual Ministerial Roundtable discussion on Energy, Climate and Sustainable Development on 6 September 2021. Participants included representatives from OPEC member countries and non-OPEC oil producing countries, India as well as international organizations including the African Petroleum Producers Association (APPO), the African Energy Chamber (AEC), the Gas Exporting Countries Forum (GECF), the International Energy Forum (IEF), the African Refiners & Distributors Association, and the Organization of Arab Petroleum Exporting Countries (OAPEC).

Climate Change Remains one of the Greatest Challenges of our Time

The International Energy Agency (IEA) posits, in its 2021 Global Energy Review, that global emissions from energy use is set to increase by 1.5 billion tons to 33 billion tons in 2021, despite a 5.8% reduction in 2020 due to the COVID-19 pandemic and imposed lockdowns. With the energy sector accounting for 72% of total emissions, urgent action is required. In response, the international community, through the Paris Climate Agreement, has opted for the immediate reduction in fossil fuel-directed financing, advocating for the switch to renewable energy sources and the end of hydrocarbon use worldwide. The impacts of reduced finance for African oil and gas developments are significant, especially considering the reliance on foreign direct investment in expanding energy sectors and driving socioeconomic development. Despite intentions to reduce greenhouse emissions globally, these initiatives threaten to further accentuate energy poverty in Africa.

The Need for a Common-but-Differentiated Approach

In the OPEC-led Ministerial Roundtable, one of the recurring themes was that Africa requires a flexible approach to mitigating climate change. With energy poverty eradication a primary objective for every African state, the continent needs all of its oil and gas resources if it is to ensure long-term, sustainable economic growth. According to H.E. Diamantino Pedro Azevedo, Angola’s Minister of Mineral Resources and Petroleum, “there is a need for an inclusive, pragmatic and holistic approach to mitigate and adapt to climate change, taking into account national circumstances and priorities, as well as the principles of equity and common-but-differentiated responsibilities and respective capabilities.”

“Developing countries are part of the solution, not the problem. It could be argued that choosing one of two energy options will not lead to the expected sustainability. Pursuing such a narrow strategy could even exacerbate the challenge of energy poverty in the world. With 800 million people without access to electricity, the flexibility to use a variety of energy carriers will lead to increased access in all countries,” stated H.E. Bijan Namdar Zanganeh, Minister of Petroleum for the Islamic Republic of Iran.

If the continent is to ensure effective economic growth in the wake of the pandemic, countries need to be able to develop their oil and gas resources. Rather than eliminate hydrocarbons, by utilizing their resources for stronger, ore sustained economic development, energy poverty can be eradicated by 2030. Accordingly, the Roundtable introduced the role that natural gas, in particular, will play in Africa’s energy future.

“The GECF gives a voice to natural gas as part of the solution to balanced, sustainable development. There has been a commitment by the GECF heads of state to increase the pace of global energy transition and the positive contribution of natural gas to climate mitigation. We need to emphasize the need to consider all energy sources without discrimination. Natural gas and oil will provide more than 50% of global energy demand by 2050 and will continue to be responsible for inclusive economic growth for decades to come. Gas is one of the global enablers to reduce emissions,” stated H.E. Yury Sentyurin, Secretary General of the GECF.

“We need the energy sector to work for local development. A short-term priority should be how to harness these resources in a sustainable way. The gas sector, in particular, is a key driver of this dynamic,” added Rolake Akinkugbe-Filani, Advisory Board Member of the AEC.

“There can be no constructive dialogue in energy transition without energy poverty being placed at the forefront of the debate. Our planet will only be better if we all work together. We believe in Africa, that oil and gas is part of the future. We have an obligation to develop our resources while following the climate change mitigation,” stated NJ Ayuk, Executive Chairman of the AEC.

Collaboration is Essential for Progress

In the move to eradicate energy poverty, unilateral climate mitigation strategies threaten to hinder progress. Therefore, the need for a collaborative approach has been emphasized in which both developed and developing countries engage in an inclusive debate. As H.E. Barkindo suggests, “we need multilateralism at the center of our energy, climate and sustainable development future.” Accordingly, developing countries should not be left out of the debate on climate mitigation, but should take on an inclusive role.

“The energy transition should be accompanied by a world-wide debate. With concerted policy and open debate, we will find a path to retain a solution and reduce the impact of climate change. We do not need more declaration, we need urgent action,” stated H.E. Tareck El Aissami, Minister of Oil of Venezuela.

What’s more, Africa’s economic and energy future requires support from developed countries, “including financial resources, technology development and transfer and capacity building to aid adaptation and back increased ambitions for climate action,” as H.E. Barkindo stated. Rather than enforce “unilateral coercion measures that effect sustainable development, climate mitigation should go beyond the commercial agenda to serve men, women and households for the construction of the transition that includes energy security,” added H.E. Aissami. Accordingly, a collaborative approach between developing countries, who require an adapted strategy to mitigation, and developed countries, who hold the financial resources needed to help Africa in its energy transition and sustainable development.

“The capacities and national circumstances of developing countries must be taken into account in all actions. In order to not render countries already struggling even more besieged, it is necessary to carefully consider the adverse socio-economic impacts on these countries due to mitigation activities, in order to identify remediation measures and share best practices,” concluded H.E. Barkindo.

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Charné Hollands

Charné Hollands

Charné Hollands is the Deputy Editor at Energy Capital & Power. She holds a Higher Certificate in Professional Photography and Masters in Media Studies from the University of Cape Town. Charné writes content for ECP's website and events as well as co-authored African Energy Chamber: Road to Recovery.