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Understandably, energy is expected to drive Africa’s economic prosperity. In order to make great strides in the industrial sector and achieve a high level of sustainable development, for example, energy is a key determinant, says N.J. Ayuk, executive chairman of the African Energy Chamber, a pan-African company that focuses on research, documentation, negotiations and deals in the energy sector.
According to him, increasing Africa’s productive capacity to achieve universal access to energy is a challenging task and points to the need for a transformational strategy based on partnership, which aims to increase access to energy for all Africans. He also spoke about transparency, good governance and policies that could create a favorable investment climate, especially in the energy sector.
Speaking in an insightful interview with Kester Kenn Klomegah in early July 2021, NJ Ayuk unreservedly called for strong foreign partnerships in energy use and distribution, stressing the importance of foreign investment in large-scale research projects in African countries. In the context of the newly created African Continental Free Trade Area (AfCFTA), he suggests that politicians, investors and stakeholders must change their perceptions of business and create an entirely new perspective for the future. Here are excerpts from the interview:
What are the popular stories about energy sources, production and use in Africa? According to your expert opinion, how would you characterize the energy needs in Africa?
The popular story is the spread of energy poverty on the continent. Most of the oil and gas producing countries have some kind of conflict in the area, which affects the local population and the companies that choose to invest in these areas. For example, for a country like Ghana, we have seen the positive aspects of an effective way of producing oil, the main contributors being its transparency and its policies.
However, African countries suffer from their policies, which take years to implement and, if implemented, will take a long time to administer production contracts to take effect. That said, the effect on the upstream sector automatically affects the middle and downstream sector, which essentially affects the economies of different countries.
Undoubtedly, energy poverty must be eradicated. Africa has the lowest per capita energy consumption: with 16% of the world’s population (1.18 billion out of a population of 7.35 billion), it consumes about 3.3% of global primary energy. Of all energy sources, Africa consumes the most oil (42% of total energy consumption), followed by gas (28%), coal (22%), hydro (6%), renewable energy (1%) and nuclear (1). %). South Africa is the seventh largest coal producer and accounts for 94% of Africa’s coal production.
Renewable energy resources in Africa are diverse, unevenly distributed and huge in quantity – almost unlimited solar potential (10 TW), abundance of hydropower (350 GW), wind (110 GW) and geothermal energy sources (15 GW). Biomass energy accounts for more than 30% of energy consumed in Africa and more than 80% in many sub-Saharan countries. Sub-Saharan Africa has discovered, but technically renewable, energy resources estimated at about 115.34 billion barrels of oil and 21.05 trillion cubic meters of gas.
Do African leaders see some of the contentious issues in the same way as you discussed above?
In my opinion, African leaders are taking into account what has been discussed above, but they are too slow to deal with the problems that eventually accumulate. The effect of this is that once they finally deal with the first problem, they realize that others have accumulated and have to keep digging. Leaders also need to start attracting young people to the table who have fresher eyes and a valuable contribution because of the time they live and grow. The main contribution to this is the Internet.
How do you assess the impact of the energy deficit, especially in the context of the fourth industrial revolution? Is energy financing the determining factor here?
First, we need good governance, which creates an enabling environment for widespread economic growth and improved infrastructure. African leaders need unwavering determination to make Africa work for us, even when there are wrong steps and things go wrong.
Without stability, projects and contracts cannot enter into force. A recent example is the revolt in Mozambique, which took the lives of people but halted a project that would have a positive impact not only on Mozambique and its region, but on the entire continent. But now we must look ahead and not dwell on shortcomings or pitfalls.
To change the tide and stimulate recovery from a pandemic in the energy sector, which will also boost overall economic growth in Africa, African leaders must redouble their efforts to attract investment in their energy sectors. They need to put in place timely and market-appropriate strategies to deal with external crosswinds, such as the pursuit of global decarbonisation and changing patterns of domestic and global hydrocarbon demand. They need to end restrictive fiscal regimes, inefficient and intensive carbon production, cut red tape and other business difficulties that prevent the industry from reaching its full potential.
Which individual countries have set out exceptional examples, at least in the supply and use of energy in both urban and remote cities?
Consider the impact of the energy deficit. Approximately 840 million Africans, mostly in the Sahara, do not have access to electricity. Hundreds of millions have unreliable or limited power at best.
Even under normal circumstances, energy poverty should not be a reality for most Africans. Household air pollution caused by the burning of biomass, including wood and animal waste, for cooking and home heating is blamed for about 4 million deaths a year. How will this be played during a pandemic? For women who are forced to leave their homes to receive and prepare food, shelter on the spot is almost impossible. What about those who need to be hospitalized? Only 28 percent of health facilities in sub-Saharan Africa have reliable capacity. Doctors and nurses cannot even rely on the lamps on, let alone the ability to treat patients with equipment that requires electricity – or to store blood, medicines or vaccines. All this puts African lives at risk.
Africa does not need social programs, even educational programs, which are offered in the form of aid packages. Moreover, offering aid packages to Africa to compensate for the suspension or delay of oil and gas operations will do no good to Africans. This is not the time for Africa to call for more help.
Africa has been receiving aid for nearly six decades, and what good has it done? We still don’t have enough work. Investments create opportunities. We as Africans must be held accountable. Our young people must be empowered to build an Africa that we can all be proud of. Relying on the same old policies of the past, relying on help, just won’t get us there.
Do you support expert opinions on the “energy mix” – a combination of wind, solar, hydro and nuclear energy? Why is nuclear energy still facing problems in Africa?
I would like to say yes. Africa must continue to rely on all forms of energy to address its shortage of energy production and distribution. Access to the generating resource will vary from country to country. Therefore, countries need to focus on those resources to which they have easy and accessible access. Nuclear energy remains the least available in Africa due to the lack of technology and high upfront construction costs associated with building such plants.
Africa has almost unlimited renewable energy capacity, rich access to solar, wind, water and geothermal sources; however, with the exception of a few large-scale projects, such potential is not adequately developed. What the continent needs is to strike a balance between achieving its energy transition goals and exploiting its natural resources, especially natural gas, to accelerate energy production, generate jobs and as a source of income. The potential of natural gas to breathe new life into troubled African economies, which are still shaken by the brutal economic impacts of the COVID-19 pandemic.
Natural gas, available and rich in Africa, has the power to create significant opportunities for job creation and capacity building, economic diversification and growth. I am not saying that African countries must continue their oil and gas operations indefinitely without moving to renewable energy sources. I say that we need to set the timetable for our own transition and decide how it will go. What I would like to see, instead of pressure from the West to abruptly halt African oil and gas activities, is an effort to cooperate.
A number of foreign countries and private energy investment giants have shown interest in the energy sector. How do you assess the dynamics of their performance on the continent?
Local content is a pillar of the industry’s sustainability efforts. Sustainable development of African economies can only be achieved through the development of local industry – by investing in Africans, building African entrepreneurs and supporting the creation of local companies. Oil companies have an incomparable ability and a deep responsibility to support countries in shaping an economy that works for all Senegalese and preserves their freedoms.
What is your vision for Russia, considered an energy giant, for example, uniting with China in Africa? Can both have a common approach to cooperation on energy projects in Africa?
First and foremost, Africa has already left an indelible mark on the oil and gas industry. I think Russian companies need to do more to really get involved. I always say that Africans want to get married, but Russians just want to meet. We need to change that and become more responsible. Both our compatriots expect better and more from our energy sectors.
As far as China and Russia are concerned, if both countries can avoid a ‘one-size-fits-all’ approach, so much good can come out of our oil and gas relations with Russia. Africa has a lot to gain from Russian participation and vice versa. Both must work to empower each other with specific projects that benefit investors and the communities in which the projects are located. To be fair, the positive developments from Russia and China do not go unnoticed, as their active presence on the continent leaves room for greater opportunities for the energy mix.