Africa Needs Pragmatic Free Market Policies To Attract Capital Into Gas Markets
NJ
AYUK
Speaking at the International Petroleum
(IP) Week on February 25, 2021, I commended Nigeria for its efforts in driving
gas monetization, but we have to be clear that our industry and hardworking
people remain frustrated by the delays and inability to pass and sign the
Petroleum Industry Bill. There needs to be that fierce sense of urgency of now
especially in the era of the energy transition. The Petroleum Industry Bill
(PIB) needs to be passed as it allows energy companies to turn their attention
to producing energy that drives our economies.
It will allow politicians to focus on other pressing matters like the African
Continental Free Trade Area (AfCTA) and security issues.
Africa is well-placed to become a key global
supplier of LNG. Mozambique, Nigeria, Equatorial Guinea, Senegal, and Tanzania
are potential players. But we have to be honest, Africa is falling behind.
While capital investment in other regions has increased, it has decreased
vastly in Africa. Competition for capital investment in the global LNG industry
is fierce and for countries that want their resources to be monetized locally
and internationally, a number of factors need to be considered and must be done
so quickly.
Rising (and sometimes reckless) government expenditure, burdensome regulations,
and the lack of infrastructure to move Africa’s energy to grow markets are all
undermining investor confidence in many African countries. This is negatively
affecting exploration projects and even our ability to attract the capital
needed to create jobs, implement the AfCTA and push for Africa wide prosperity.
In my many meetings with African leaders, I have made it a point to champion an
enabling environment for the energy industry. Many of our policy and regulatory
initiatives proposed by governments, along with governance issues are
undermining investor confidence and negatively affecting our ability to attract
capital and remain competitive.
We should not forget that we are competing for investment, labor, and capital
in an increasingly globalized world.
I believe in Africa and our people, even during our dark times, that there is
always a righteous wind that drives us towards a place where winning is real.
We are hardworking people and we have it within us to make this a pivot point
in our energy industry and our history.
Amid the COVID-19 pandemic, some industries, businesses, and segments of the
workforce have thrived. But, of course, it has also been a very different story
for others. Entire industries have been decimated because people are not
able to travel, gather, conduct business or carry out their lives the way they
used to.
For governments to recover, they must seek to not return to excessive
regulation or anti-business policies and even sometimes punitive taxes. The
positive effects of regulatory relief and pro-business policies on many African
economies have attracted investment and ensured FID on many energy projects.
Now is exactly the wrong time to further test the resiliency of businesses by
hiking taxes or heaping on new regulations that do more harm than good to
African and international investors.
For Africa to see a balanced and sustainable
energy mix, it is important that we urgently address the challenges facing our
industry today.
At the African Energy Chamber, we exist to build, educate, and mobilize the
largest network of Africans advocating the principles of smaller government,
better fiscal terms, lower taxes, less regulation, less red tape, common-sense,
local content, free-market trade, personal liberty and the rule of law. Through
these positions, we offer solutions to create an economically viable industry
and Africa that meets both our environmental and competitiveness goals.