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Foreign fuel firms must support Africa industrialisation

September 24, 2019 12:08 pm by: Category: Africa & World, BUSINESS, Energy, Featured, Finance & Banks, Investing, Local, National, NEWS Leave a comment A+ / A-
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SAVIOUS KWINIKA 
JOHANNESBURG – OIL and gas industry executives believe foreign companies operating in Africa must contribute towards building infrastructure in their host countries and eventually enable the continent make the most of these abundant resources to eliminate poverty.

According to Bruce Falkenstein, this would spearhead industrialisation in the continent and ensure that local countries can add value to their products, unlike the current scenario whereby Africa exported raw commodities only to import them at exorbitant prices after they are processed overseas.

Falkenstein, who is the Joint Operations Manager of License Management and Compliance for Russian-headquartered LUKOIL, agreed with sentiments expressed by leading African energy attorney, NJ Ayuk.

Ayuk is the author of the upcoming “Billions at Play: The Future of African Energy”, to be published in October.

“It is simply not ethical for American, French, Italian and other companies to come here and not help lift people out of poverty,” Falkenstein said.

He said while it was welcome that foreign companies employed locals and empowered them with skills, the biggest benefits would be in committing to help build sustainable infrastructure and physical assets that would remain long after the companies had left Africa.

“Sustainability is only achieved through alignment of the projects with both the real needs of the impacted communities and the spectrum of government stakeholders,” Falkenstein.

The official said roads, railways, and reliable electricity were key to building a manufacturing base in Africa, hence the international energy companies making millions on the continent must provide towards these.

Falkenstein, boasting a 40-year career working in all facets of the international oil and gas industry, concurred with Ayuk on the issue of Africa on lack of value addition to African raw materials.

“There is no getting around it: Africa is exporting raw materials it could be refining and processing, if it only had the capabilities, but not everyone is willing to admit that with the level of candour Ayuk does,” he said.

Ayuk has linked infrastructure deficits to the lack of industrialisation.

Ayuk wrote about the irony in oil and gas produced in Africa being sent abroad for refining and then the continent paying a premium for the refined products.

In Billions at Play: The Future of African Energy, Ayuk, however, believes some corrupt African leaders are to blame for the continent’s failure to utilise its resources.

He singled out Kenya as one country on the right path after creating an enabling environment for manufacturing that supports economic diversification and should reduce the country’s exposure to external shocks.

These shocks include oil and gas price volatility.

Ayuk also co-authored “Big Barrels: African Oil and Gas and the Quest for Prosperity.”

He is recognized as one of the foremost figures in African business today.

– CAJ News

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