(Image source: The European House-Ambrosetti/LinkedIn)

Luca Silva, Head of Design and Construction Africa and the Middle East, will illustrate the Building Energy’s skills and vision from start-up to successful enterprise during the debate ‘Leaders for the future’

David Mahlobo, South Africas new energy minister, addresses Africa Oil Week.

The 24th Africa Oil Week opened in Cape Town today with a strong focus on moving away from exports and instead utilising African oil and gas for access to energy and downstream projects, such as petrochemicals and refining

In his keynote address, the new South African energy minister, David Mahlobo paid tribute to Oliver Tambo to coincide with the 100th anniversary of his birth, for his contribution to South African democracy and subsequent economic development, before emphasising the importance of discussing "the common future of Africa [as part of the] African Union agenda" at the conference. In the southern Africa region, he cited gas exploration in Namibia and coalbed methane in Botswana Zimbabwe as examples of integrated economies in the continent. 

"Africa needs to take steps to ensure the continent grows with sustainable development," he said. "Access to energy is needed to propel economies in the next 50 years - energy transforms lives and economies."

Mr Mahlobo said African countries need to move away from being net importers of oil and gas and "further embrace energy security and supply". He said that there are currently nine African refinery projects with capacity of 1.65mn bpd planned, including Nigeria with plans for capacity of 650,000 bpd once current projects are completed.

In regard to South Africa, he said that the country will soon be producing hydrocarbons and while there were some economic benefits to the low oil price, the recent increases in Brent crude prices need to translate into development and jobs. While struggles over energy resources have been a source of conflict in Africa, Mr Mahlobo was upbeat about the prospect of South African hydrocarbons being used to produce energy with "affordable tariffs and subsidies for needy households". He added that environmental sustainability to mitigate the effects of climate change as part of South Africas integrated energy plan was important.

He told the conference that "a diversified energy mix" and a "pragmatic approach were important" to meet clean energy targets, with gas playing an increased role in South Africa. Mr Mahlobo said gas should be used to "improve efficiencies" in industries were "sub-optimal fuels" are being used.

Austin Avuru, CEO, Seplat Petroleum Development Company, echoed Mr Mahlobos sentiments about AU cooperation, saying that energy should be used as an enabler for the African economic plan, particularly in terms of improving access to energy. He pointed out the disparity between Africas significant energy production and low consumption and power outages, even in areas with electricity.

"Energy consumption should be proportional to economic development," Mr Avuru told the conference. "Bragging rights should be about consumption, not production."

He criticised African countries for rushing to take out loans to build long export pipelines and other infrastructure for exporting instead of focusing on using oil and gas for domestic consumption. Once countries start producing oil and gas, "we start repaying debts for infrastructure".

Mr Avuru cited the example of Nigeria where oil and gas make up 80 per cent of government revenue but just 10-14 per cent of GDP, describing it as "a disconnect ... a rental economy".

"But things are changing, not just in Nigeria, but across Africa," he said. "In Nigeria today, gas consumption is increasing."

It is projected that by 2020, Nigerians will be consuming gas at a rate of 3tcf/day with a fivefold increase in electricity consumption projected in the same timeframe. Mr Avuru said that if Nigeria becomes a net exporter of hydrocarbons, the downstream sector can be further developed with plans for refining capacity of 1.2mn bpd by 2020, an even bolder projection than the 650,000 bpd cited by Mr Mahlobo. He added that Egypt, Ghana, Cote dIvoire and Tanzania are all taking a similar path towards energy security using local hydrocarbons.

He concluded his address by recommending privatisation of refineries to create a domestic market and full deregulation of the downstream sector.

(Image source: Komencanto/commons)

Here is a brief overview of the week’s news on African Review, from 2nd - 6th October 2017 

Aliko Dangote (L) with Richmond Osuji (R). (Image source: Lipservicecomm/Commons)

At the Financial Times 4th annual Africa Summit at Claridges in London, editor in chief Lionel Barber conducted an extraordinarily candid public conversation with Nigerian Aliko Dangote, Africas most successful business leader, in the presence of Nigerian vice-president Professor Yemi Osingajo, Congolese presidential hopeful Moise Katumbi, and about 300 business leaders

Mastering detailed production statistics and highly-compelling demographics on promising sectors of the African economy, Dangote outlined the key to his success: self-sufficiency and backward integration, a manufacturing strategy that extracts value from entire processes. "We are not going to import anything any longer," he said. "In Nigeria we are learning how to produce the entire value chain." Once a heavy importer of fertiliser, Nigeria is now gearing up to produce 3mn tonnes of locally manufactured fertiliser, transforming the nation into one of the largest fertiliser exporters in Africa.

In 2007 Nigeria was the second largest importer of cement after the US, Dangote reminded the audience of business elites. "Today, we have not only satisfied domestic needs; we have become a leading exporter of 6-7M tonnes of cement," he added.

Diversifying into agriculture, Dangote has eyes on the dairy industry motivated by the fact that "98 per cent of all milk consumed in Nigeria is imported." Same for rice. Dangote Group has invested heavily in rice production by investing in local farmers and then offering to buy back the 1mn tonnes at open market prices that they are growing. "Soon we will be able to feed not only Nigeria but the entire 320mn large West African market."

Dangotes business accumen was on rare exhibition as FT editor Lionel Barber himself seemed impressed with the business moguls quick familiarity with the nuts and bolts of his businesses. "Are we going to continue to import everything?" Dangote asked. "Freight rates are now cheap but they will go up soon. A population of over 200mn cannot continue to import basic needs on a daily basis," he answered himself.

By 2100 Dangote stated Africa will represent 49 per cent of the worlds population, up from 30 per cent today. "If you dont think big we wont grow at all," he said. "In Africa, you have to play long-term."

Aside from Nigeria, which African nations do you think are good growth opportunities? Barber asked Dangote. "Aside from Nigeria?" the business leader repeated and smiled. "Id have to pick Nigeria. I am a big fan of Nigeria. We are only using 8 per cent of our land."