Tinubu: Harnessing Africa’s gas potential key for industrialisation

Africa's industrialization and economic growth are hinged on harnessing its vast gas potential, says Wale Tinubu, the CEO of Oando. In a recent chat with CNBC Africa at the 50th anniversary of Arab Bank for Economic Development in Africa, Tinubu emphasized the importance of leveraging gas reserves to drive industrialization on the continent. He highlighted the ongoing divestments in the oil sector as creating opportunities for local players to thrive and contribute significantly to the energy landscape. Tinubu underscored the role of private sector participation in driving Africa's development, citing examples of successful indigenous companies in Nigeria who have made significant strides in sectors like cement and oil and gas. One of the key points Tinubu raised is the significance of institutional investment in Africa's private sector. He noted that the African Export and Import Bank and the ECB's initiatives have paved the way for substantial economic benefits and growth. Tinubu emphasized the need for increased funding directed towards SMEs, highlighting their pivotal role in driving business on the continent. With the implementation of initiatives like the Africa Free Trade Zone Act and common currencies like PAPS, Tinubu believes that easing trade barriers within the continent will spur economic growth. The discussion also touched on the energy sector and the transition towards cleaner and renewable energy sources. While acknowledging the importance of clean energy, Tinubu stressed the necessity of a mixed energy portfolio for Africa's development. With Africa holding over 15% of the world's gas reserves, Tinubu advocated for harnessing this potential to fuel industrialization. He argued that gas could serve as a transition fuel and facilitate import substitution, ultimately reducing foreign exchange challenges. Tinubu also addressed the issue of subsidies in the energy sector, particularly in petrol. He criticized the practice of subsidizing petrol, highlighting that resources could be better allocated towards efficient transport systems and supporting the needy in society. By reallocating these subsidies and investing in alternative transport modes like CNG and e-vehicles, Tinubu believes Africa can enhance its transportation infrastructure and benefit those most in need. Furthermore, Tinubu touched on the trend of divestments in the oil and gas sector, using Nigeria as a case study. He explained that divestments are a normal occurrence in the oil industry as companies seek new opportunities and higher production levels. The divestments present local players with the chance to step in and revitalize declining fields, contributing to the country's oil production and economy. In conclusion, Tinubu's insights highlight the immense potential that Africa's gas reserves hold for driving industrialization and economic growth on the continent. By leveraging these resources, supporting local players, and investing in a diverse energy mix, Africa can pave the way for sustainable development and prosperity.