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The aspirations of governments and local com- working entrepreneurs, and it needs to be done heavy-handed approach is not helpful and is
panies across the CEMAC region to build a before it is too late. The BEAC cannot love and counter-productive.
vibrant and jobs-creating energy sector have support jobs while it hates or punishes those who A policy turn is required to properly fight
indeed been dramatically affected by the foreign create jobs. energy poverty, and a relaxation of foreign
exchange regulations imposed by the BEAC. Combined, the CEMAC members produce exchange regulations must be accompanied with
Such regulations are putting extremely deter- about 700,000 barrels of oil per day (bopd). They lower taxation on local companies, better fiscal
ring barriers of entry for investors in Gabon, the also produce increasing quantities of natural gas, terms for exploration companies, particularly
Republic of Congo, Cameroon, CAR, Equatorial and the region houses up to 5 million tonnes per corporate taxes, and the promotion of greater
Guinea and Chad, and a bitter halt to any kind annum of LNG export capacity, shared between prosperity, individual freedom and investment.
of local content development for companies and Equatorial Guinea and Cameroon. African Energy Chamber, October 20 2020
entrepreneurs in these countries. But as it tries to recover from the COVID-
While the end goal of the BEAC to fight 19 crisis and the historic crash in oil prices, we
corruption is noble and must be supported, in can only expect operators to be forced to con- PERFORMANCE
essence its regulations prevent the free flow of tract international companies at the detriment
capital and the repatriation of profits, and deny of local ones. World Bank report: Oil
local companies the ability to compete on equal In Equatorial Guinea, where the Ministry
terms with their foreign counterparts. of Mines and Hydrocarbons has pushed for sector’s fall is driving
Because of the region’s reliance on imports of increasing local content compliance, all such
equipment and material for oil & gas operations, efforts are now jeopardized by the BEAC’s mon- down growth in West
the ability of local companies to establish strong etary policies. Similarly, the latest local content
business relationships with foreign partners regulations within the new Hydrocarbons Code and Central Africa
is central to their competitiveness and ability of Congo (2016) and Gabon (2019) and the new
to secure contracts. However, CEMAC’s forex Petroleum Code of Cameroon (2019) are now Economic growth will fall this year across west
rules mean its local services companies are now all made pointless unless the region’s monetary and central Africa due to the effects of the coro-
unable to quickly and efficiently pay their for- authority takes a drastic policy turn. navirus pandemic, with the fortunes of major
eign suppliers. Concretely, it would take a local The African Energy Chamber, its partners oil-producing nations set to decline, according
services company from CEMAC several months and members urgently call on the BEAC to act to a report from the World Bank. After expand-
to honour its contractual engagements with an in the CEMAC Zone’s own interest, in the inter- ing by 1.5% in 2019, gross domestic product
operator, compared to only a few days or weeks est of its workers and its companies. The need to (GDP) among Africa’s oil exporters is projected
for any other competitor not constrained by the have a monetary policy that takes into account to decline by more than 4% in 2020, mainly due
same forex regulations. the concerns and voice of the region’s biggest rev- to projected contractions in Angola and Nigeria,
As a result, companies in Central Africa are enue-generating industry is dire. At a time when according to the report, Africa’s Pulse: Charting
condemned to inexorably lose the contracts Africa gets ready to roll out the African Conti- the Road to Recovery.
they have worked so hard to secure from foreign nental Free Trade Area (AfCFTA), CEMAC and The COVID-19 pandemic has hammered
operators and contractors. In a region where its business communities risk being further left global oil demand, keeping prices relatively low
oil & gas represents 80% of revenues, the con- behind. for most of this year. Nigeria’s GDP contracted
sequences for economic growth and jobs crea- If CEMAC energy markets are to recover by 6.1% in the second quarter of 2020 on a year-
tion could be catastrophic. To make things even from the historic crises of 2020 and improve the on-year basis, the worst result for more than a
worse, BEAC’s Instruction No. 002/GR/2020 of standard of living of their population through decade.
September 2020 on currency transfers outside of economic growth and jobs creation, the invest- Other oil producers such as Congo-Brazza-
the CEMAC region has set up additional taxes of ment climate and business environment must ville and Gabon will also record an economic
0.75% on all transfers made outside of CEMAC be supported by market-driven policies and the decline, while the economies of the likes of Ivory
starting January 1st 2021, on top of existing fees right financial regulations. and Ghana will slow but not contract, the report,
and taxes. Excessive regulation has become a threat to released this month, said.
On behalf of the fight against corruption, the individual freedom and prosperity, and must Africa must remain vigilant despite record-
African Energy Chamber can only observe a be curbed as local companies stand to suffer the ing lower case numbers of COVID-19 infections
gradual killing of investment in Central Africa, most. and lower mortality rates compared to other
made through the punishment of local entrepre- In an era where capital investment in regions, say World Bank researchers.
neurs. A big difference needs to urgently be made the energy sector is drying out, especially “Confirmed cases and deaths from the new
between fighting corruption and punishing hard for African oil and gas projects, CEMAC’s coronavirus are recorded respectively at 3.4%
and 2.5% of those registered worldwide (but)
great uncertainty surrounds the scale and tra-
jectory of the pandemic amid concerns of a
potential second wave in African countries,” the
report says
With the exception of South Africa, Sub-Sa-
haran Africa has so far escaped the worst of the
health crisis but the global crisis has unwound
economic progress across the region with eco-
nomic activity set to contract this year by 3.3%,
according to the report.
African Energy Chamber, October 13 2020

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