JOHANNESBURG, South Africa, February 26, 2021/ -- By 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.
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