Page 5 - DMEA Week 41 2022

DMEA COMMENTARY DMEA

One shudders to think what would happen to development of low-carbon, green power across
the continent’s major oil-exporting countries — the continent. It’s a win all around.
including Algeria, Angola, Equatorial Guinea.
Gabon, the Republic of Congo (ROC) and Phasing out foreign aid
Nigeria, where fossil fuels represent anywhere The development of an African Energy Transi-
from 7% to 37% of GDP — should the industry tion Bank does one more thing, though it’s not
evaporate altogether. mentioned in Oramah’s commentary. It reduces
As Oramah notes, “divesting from fossil fuel our need for foreign aid, the traditional bandage
could cut as much as $30bn off Nigeria’s GDP for African poverty.
and almost $190bn off the continent’s GDP.” We intend to push him on that issue during
The social and economic repercussions — some the African Energy Week (AEW) conference in
of which are already playing out as investment Cape Town.
has tightened — would be profound as export As I’ve written in my books and editorials,
earnings and revenues dry up, fossil fuel-de- Africa doesn’t need hand-outs. They do more
pendent factories shutter, the already limited harm than good by blocking the potential and
fossil fuel-powered grid is strained further, jobs opportunities for poor people to help them- Is it possible to
are lost and poverty ripples even farther through selves. After all, it’s hard for local farmers to sell
even more communities. their crops or eggs or cattle when they’re com- reconcile the
And, of course, the backdrop to all this is peting with free food from a foreign government
the fact that nowhere else is there an electricity or institution. world’s carbon
deficit like Africa’s, where 600mn people still live What we do need are skills development,
without a reliable source of power. infrastructure and enabling environments to reduction goals
build vibrant economies — things I sincerely with Africa’s
Reconciling transition and fossil fuels believe are possible through the work of a mul-
Fortunately, Oramah’s commentary isn’t without ti-billion-dollar, pan-African energy bank and right to use its
hope. He poses an interesting question: Is it pos- its capacity-building. The African Energy Tran-
sible to reconcile the world’s carbon reduction sition Bank will serve as a catalyst for private resources?
goals with Africa’s right to use its resources and investment. By channeling these funds into Afri-
achieve a smoother and “less painful” transition can projects, the bank will drive homegrown
to renewables? development and socioeconomic growth while
He answers with a promising solution: using increasing access to electricity for everyday
earnings from fossil fuels “to support an orderly Africans.
economic diversification and structural trans- In short, Africans will be doing it by ourselves
formation programmes and, importantly, to and for ourselves, without Western assistance or,
maintain a meaningful economic livelihood for more to the point, interference.
the most vulnerable population.” Oramah’s commentary gives the world a
The institutional structure to accomplish much-needed voice of reason when it comes
those goals, Oramah says, is an African Energy to Africa’s energy transition. The pragmatic
Transition Bank — which his bank is working to approach he proposes for Africa’s energy tran-
establish in partnership with the African Petro- sition respects the global community’s need to
leum Producers Organization (APPO). slow climate change—and holds our continent
The African Energy Transition Bank is responsible for helping the world achieve that
expected to achieve four key goals: vital goal.
™Restore and leverage African and global But it also shows that we can protect our
investment flows into the continent’s oil and gas planet and people without sacrificing African
industry over a transitional period. needs and priorities.
™Mobilise funding to support investments
into the energy value chain of its members. NJ Ayuk is the executive chairman of the
™Increase investment in transition fuel pro- African Energy Chamber (AEC). Article
duction and logistics. reprinted courtesy of AEC. ™
™Support diversification of the fossil-de-
pendent economies to mitigate the economic
cost of transition.
In addition, Oramah wrote, the bank
will promote intra-African trade and invest-
ment to reduce the sizable carbon emissions
derived from the externalization of Africa’s
supply chains. Some 85% of Africa’s trade is
extra-African.
It would be difficult, I think, to find fault with
Oramah’s concerns, assertions or well-con-
sidered plans. Redirecting current fossil fuel
revenues to greener industries on a measured
timetable with appropriate benchmarks —
that’s how Africa can help mitigate environ-
mental harm, stabilise vulnerable economies The Afreximbank-supported EACOP project will
and prepare them for growth and incentivise the incorporate solar energy (Photo: Twitter/@GCICUganda)

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