‘Africa loses $15b to crude oil, natural gas export’

The African continent is losing about 70 per cent of her crude oil and 45% of her natural gas annually to export. This amount to about $15 billion annually in added could be generated locally, especially in the midstream and downstream segments.

This was disclosed by the Secretary-General of African Petroleum Producers Organisation, Farid Ghazali, at the ongoing 9th edition of the Nigeria International Energy Summit (NIES), in Abuja.

According to the APPO scribe, financing remains the main bottleneck hindering the development of the continent’s strategic projects, as more than 150 essential projects from refineries to pipelines such as the Ajaokuta-Kano-Kaduna (AKK) pipeline to gas infrastructure remain blocked.

 “This is the situation because the cost of financing in Africa is 15-20 per cent compared to only 4-6 per cent in Asia. This disparity is unacceptable and slows down our progress. In addition, the fragmentation of our energy financial ecosystem is a challenge.

“Our 18 national oil companies in APPO often operate in isolation without a common stock exchange, which severely limits regional synergies and our collective ability to attract massive capital,” Ghazali said.

Faced with this emergency, is further said, APPO has worked tirelessly to forge a resiliently African and pragmatic solution, which is called the African Energy Bank (AEB). The AEB, he explained, is designed to unlock the $200 billion needed for the continent’s midstream-downstream projects by 2030.

He further explained that the AEB is a pan-African platform for the exchange of equipment, energy services, and above all, a catalyst for innovative financing to support structuring African energy projects. He added that it is time to produce what Africa is consuming and to consume what she produces.

This includes allowing the listing of shares of national companies and flagship projects such as the Dangote Refinery or the Akk Pipeline, for example, as the target is to raise $15 billion in just three years with this increased liquidity.

The bank will also ensure competitive regional pricing, as it will unify intra-African pricing for oil and gas, allowing member countries to achieve savings of up to 30 per cent on their energy imports, a potential gain of $1.4 billion for Africa.

Ghazali said the financial institution will connect Africa’s certified projects to the world’s largest sovereign wealth fund, such as IDAA and PIF, as well as to capital markets with structured green bonds and public-private partnerships (PPPs).

“We plan to start regional gas-oil trading, integrating the principles of the Brazzaville Declaration for 50 per cent local content. Phase 3, reaching 2030, the African Energy Bank will be a true African financial hub, with $200 billion mobilised to support the gas transition and energy transformation of our continent.

“Project financing for billions of dollars, regional savings of around 30 per cent of import costs, 500,000 direct jobs created in the local midstream, attractiveness for sovereign wealth funds and global investors. We are not mistaken if we affirm that Africa has already proven its ability to achieve great things,” he asserted.

He described the Nigeria Content Development and Management Board (NCDMB), with its $5 billion in local contracts through partnerships with IOCs, as an aspiring model of local content, noting that the realisation of large projects such as the Dongote Refinery, which was able to attract private capital once de-risked, are concrete proof that African projects can and will attract local and international investors if offered the right framework.

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“Today, from Abuja, the capital of the country that will host the Bank Africa Energy, thanks to the Republic Federal of Nigeria, I propose to seal an Abuja Pact, a collective commitment by Nigeria and several other APO member countries to launch and make the Africa Energy Bank full operational by middle of 2026.

This pact, he said, will align perfectly with the discussion on local content and regional gas diplomacy. He advised that it is by joining forces, pooling resources and embracing this shared vision that APPO and Nigeria can be the undisputed leaders in Africa energy financing.