- The African Energy Chamber (AEC) launched its Africa Energy Outlook 2021, exploring both short- and long-term industry projections on the back of COVID-19.
- The second edition of the 100-page Outlook serves as the Chamber’s flagship report.
- During the virtual launch, members of the AEC’s Advisory Board called for enhanced gas monetization, fiscal terms and regional cooperation to stimulate investment on the continent.
The African Energy Chamber (AEC) officially launched the second edition of its African Energy Outlook 2021 at a virtual press conference on Tuesday.
More than just analyzing the current state of affairs, the Outlook examines major trends and provides proprietary forecasts on key developments shaping the future of African energy, as well as proposes workable solutions for a post-pandemic recovery.
Members of the AEC’s Advisory Board participated in the launch and lent insight into its conclusions, including Nicolas Bonnefoy, Partner, Asafo & Co; Nosizwe Nokwe-Macamo, Executive Chairman and Founder, Raise Africa Investments; and Jude Kearney, President, Kearney Africa.
Opening the session, Nj Ayuk, Executive Chairman of the AEC, advocated for a long-term approach to energy opportunities on the continent, and underlined the importance of developing indigenous hydrocarbon resources in line with universal access to power goals.
“In 2021, Africa will benefit greatly if we create an investment climate that supports the development of all energy resources. At the African Energy Chamber, we believe that supporting the energy industry and promoting free markets, the rule of law, individual freedoms and limited government, is a duty for all Africans,” said Ayuk.
The African energy sector currently faces dual challenges: the COVID-19 pandemic and mounting environmental pressure has reduced investor appetite in oil and gas, while global competition has dramatically heightened over the last two decades, with investment expenditure failing to increase by the same degree. As a result, African leaders are deeply committed to maximizing FDI flows into energy production from all resources.
“The African population is set to grow substantially in the next 80 years. African leaders are cognizant of the need to increase access to reliable energy sources. Africa will not discourage energy investment of any kind, as both hydrocarbons and renewable energy are capable of filling the energy gap,” said Bonnefoy.
Despite a slowdown in the global energy market, large-scale natural gas projects have continued to advance in West and East Africa – catalyzing major gas reserves in Mozambique and Senegal – with several additional final investment decisions expected in 2021. The Outlook anticipates that low gas prices and a sustained liquefied natural gas (LNG) oversupply will drive gas monetization on the continent, further enhanced by the creation of regional synergies.
“We need regional collaboration to ensure that we take advantage of the huge opportunity presented by natural gas. Enhanced synergies between countries will allow for the creation of regional gas markets across the continent and will trigger progress in industrialization, gas-to-power and so on,” noted Nokwe-Macamo.
“African governments are very cognizant of the climate challenges posed by fossil fuels. However, we need African countries to develop at their own pace, without being dictated by outside powers,” added Kearney. “African governments need to ensure that they regulate in a way that attracts foreign investment while protecting its people, does not foreclose local content and improves access to energy and power.”
With the Outlook proposingthat better fiscal terms could unlock an additional $100 billion in investment by 2030, the role of fair, transparent and sustainable policy models was emphasized as a critical component in attracting investment at home.
“Africa’s energy will not be shaped by OPEC’s cuts or the GECF’s decisions. Africa has everything it needs to shape its own energy future and feed its population’s demand,” said Ayuk in a closing statement. “We need the right policies, low taxes, and proper fiscal terms in order to welcome a great influx of foreign direct investment, and build socioeconomic prosperity through our formidable natural resources.”