APPO: Africa needs funding, technology, market to scale energy transition

Africa is at a pivotal moment in its energy transition journey, facing challenges that could impact the future of the oil and gas industry on the continent. The Secretary General of the African Petroleum Producers' Organization (APPO), Omar Farouk Ibrahim, recently shed light on the pressing issues hindering Africa's energy transition during an interview with CNBC Africa. Ibrahim emphasized that a paradigm shift is underway, altering how Africa perceives the oil and gas sector as traditional sources of funding, technology, and market access diminish. The continent, despite being a significant exporter of oil and gas, harbors the largest proportion of individuals living in energy poverty. This discrepancy underscores the urgency for Africa to address key challenges and embrace collaboration and innovation to ensure a sustainable and prosperous energy future. One of the primary challenges highlighted by Ibrahim is the lack of domestic funding for the oil and gas industry in African countries. He pointed out that the continent heavily relies on external financing, with most nations unable to control even 30% of the funding within their borders. Similarly, Africa faces a technology gap, depending on external sources for cutting-edge solutions in exploration and production. Ibrahim criticized the trend of technology transfer, urging African nations to invest in developing their technological capabilities, akin to countries like China. Additionally, market dynamics pose a hurdle, with a significant portion of African oil and gas exports directed outside the continent, even as energy poverty plagues many African communities. Another key theme explored by Ibrahim was the importance of collaboration and cooperation within the African oil and gas industry. He emphasized the need to involve the private sector more actively, highlighting the limited presence of strong private sector-led companies in the sector. Ibrahim advocated for fostering partnerships among local companies to drive innovation and growth, enabling African nations to assert greater control over their energy resources. By encouraging inter-country collaboration and private sector engagement, Africa can enhance its energy security and resilience in the face of global energy transitions. Moreover, Ibrahim delved into the significance of leveraging the African Continental Free Trade Area (AfCFTA) to bolster local content and enhance services trade across the continent. He underscored the potential of indigenous companies that have built capacity in the oil and gas sector, stressing that the AfCFTA could serve as a catalyst for scaling up their operations to a continental level. By harnessing the convening power of organizations like APPO, African producers can champion local expertise and competencies, facilitating cross-border collaborations and knowledge exchange. In conclusion, Ibrahim reflected on the evolving landscape of Africa's energy industry, citing instances of increased cooperation between nations such as the Democratic Republic of Congo and the Republic of Congo, as well as Senegal and Mauritania. These collaborative efforts signify a broader shift towards shared resource management and mutual benefit, signaling a positive trajectory for the continent. As Africa navigates the complexities of its energy transition, embracing innovation, collaboration, and domestic capacity building will be pivotal in shaping a sustainable and inclusive energy future for all Africans.