Economy
Outlook for Africa’s Oil & Gas Sector Positive—Report
By Dipo Olowookere
A new report by PwC has disclosed that the outlook for Africa’s oil & gas industry remains positive amid difficult operating and economic headwinds.
Tough economic and external conditions have placed pressure on oil & gas companies to be more cost-effective and efficient. As a result, companies have adopted to a low-cost environment, which promises to be even more beneficial given the current recovering oil price.
In the PwC’s annual Africa Oil & Gas Review released at the 25th Africa Oil Week conference, 2018 held in Cape Town, PwC Africa Oil & Gas Advisory Leader, Mr Chris Bredenhann, said, “Africa’s oil & gas companies have weathered the downturns and capitalised on the upswings focusing their efforts on new ways of working, reducing costs and utilising new technology.”
Companies have taken to restructuring their portfolios with a focus on established regions, less exploration, higher value plays with low break-even-cost, and projects with shorter lead times and lower risk. The industry has also renewed its focus on delivering projects on-time and on-budget.
As the oil price is steadily rising towards pre-collapse levels, the outlook for the industry is hopeful. “It is, however, important for companies to avoid falling into the cost inflation trap that could eat into the profitability gains that should follow from the rising oil price. Keeping up capital discipline and further improving productivity will yield sustained results for the industry,” Bredenhann adds.
Despite positive developments, the oil & gas industry still faces numerous and persistent challenges around talent shortages, regulatory uncertainty, political instability, corruption and fraud, and a lack of infrastructure.
Notwithstanding the challenges, Africa does offer plenty of opportunities in the form of unexplored hydrocarbon demand fuelled by population growth, urbanisation and the emergence of a growing middle class.
PwC’s Africa Oil & Gas Review, 2018 analyses what has happened in the last 12 months in the oil & gas industry within the major and emerging markets. This edition focuses on the expert opinions of a panel of industry players from across the value chain who share their views of oil & gas in Africa.
At the end of 2017, Africa is reported to have 487.8 tcf of proven gas reserves, 7.1% of global proven reserves, only marginal changes to the prior year. Africa’s share of global oil production has slightly increased by 0. 3% since last year to 8.7% standing at 8.1 million bbl/d. The main contributors continue to be Nigeria, Angola, Algeria and Egypt. Libya also increased its production by 102.9% in 2017, placing it as the fourth-largest oil producer in Africa with an 11% share moving Egypt into fifth position.
Regulatory developments in Africa
Regulatory uncertainty continues to be a major barrier to the development of the oil & gas industry in Africa. Overall, there are some positive developments that demonstrate that governments are reacting to the new environment. Despite some notable improvements around regulation, there is still a high level of uncertainty in a number of jurisdictions, the report said.
In South Africa, the proposed Amendment Bill to the Mineral and Petroleum Resources Development Act (MPRDA) may be withdrawn, and there are plans to split oil & gas from mining formulating separate legislation, it added.
Growth and development
The report stated that the outlook for the oil & gas industry is looking more optimistic with the Brent oil price having broken through the $80 mark at the time of compiling our report. Although there has been a significant increase in the number and size of final investment decisions (FIDs) in 2018, the industry is not what it was. New finds are much smaller and leaner than they were in prior years. Deepwater oil has been given preference over gas, and oil fields offering the highest rates of return are attracting investment. There is also a preference for brownfield over greenfield developments.
The current oil price recovery reflects a tight supply and demand balance, as well as an indication that we are heading towards a potential global supply crunch in the early 2020s. Exploration spend in Africa and globally is starting to pick up as well. It is safe to assume that this trend will continue if the current higher price environment is sustained.
Digital disruption in Africa
There have been a number of developments in digital transformation in the oil & gas industry, not only globally, but also in Africa. A number of new technologies have been deployed by the industry across the value chain. Some examples include: the use of drones to inspect remote facilities thereby reducing safety and health risks; the use of robots to undertake monitoring and safety checks, which also reduces the safety risks for human operators; and the use of virtual reality to simulate the drilling of wells remarkably reducing drilling costs. Digital disruption is here to stay, and African companies must embrace this to reap the rewards.
Looking to the future
Africa is the world’s fastest economic region with a growing population that is becoming more urbanised. According to PwC’s Strategy& estimates, Africa’s total energy demand is forecast to increase by 60% to 28 000 trillion btu by 2030.
Based on different potential trajectories for economic development, energy access policy and climate mitigation strategies, researchers have put forward various alternative scenarios for energy production and consumption on the continent in the years ahead.
Hydrocarbons are expected to continue to play a major role in the energy mix that will satisfy Africa’s growing energy needs. Major gas resources on the continent including Mozambique, Nigeria, Angola, Tanzania, Senegal and Mauritania, could augment the key position of gas as an energy source for Africans. In the low-carbon context, gas also plays the role of a transition fuel before a wider switch to renewables, a development which is likely to take longer in Africa than on other continents.
The increase in population and the demand for freight transport will also see an increased demand for liquid fuels. Many African countries are ‘thinking refineries’ at various scales. Countries that are considering new refineries or upgrades include Angola, Equatorial Guinea, Uganda, Nigeria, Republic of Congo, Ghana, São Tomé & Príncipe, and Zambia. Given projected population growth and refined fuels consumption, an estimated additional 3.4 bbl/d of refined fuels will be needed to meet Africa’s needs by 2030.
The role of National Oil Companies (NOCs)
The role that NOCs play as operators and custodians of the orderly development of the hydrocarbon industry in their respective countries cannot be underestimated. Almost 30 of Africa’s NOCs are involved at various points of the value chain and at different levels of maturity.
The PwC analysis delves deeper into the NOC landscape to provide a perspective on the future that NOCs could face.
“We have identified four potential scenarios along two axes: the level of regulatory stability and the level of diversification within a country’s economy,” it said.
These scenarios depict a number of possible future pathways and provide industry players with some options with regard to how they might respond to these potential outcomes and their impact on operations.
NOCs should consider these scenarios to enable them to design strategies that avoid the pitfalls identified.
The African oil & gas industry has been through some difficult years in the wake of the oil price crash. However, the industry has restructured itself and is more competitively placed in terms of operational performance, the report stated.
“It is critical that the sector retains its capital discipline and adopts digital technologies if the hard-earned wins in cost savings are to be retained. Progress in addressing corruption and improving corporate governance will also need to be maintained. Moreover, in the longer term, the energy transition will continue to impact the sector’s dynamics with implications for oil demand,” Bredenhann concludes.
By Aduragbemi Omiyale
African leaders have been advised to focus on economic integration through industrialisation, as this would make the continent a formidable force in the global market.
This charge was given by the Minister of State in the Tanzanian President’s Office responsible for Planning and Investment, Prof. Kitila A. Mkumbo, during a visit to the Dangote Petroleum Refinery and Petrochemicals in Lagos.
“Africa now needs economic liberation, and that can only come through industrialisation,” he said, describing Mr Aliko Dangote as Africa’s leading industrialist whose investments are increasingly extending beyond Nigeria to support development across the continent.
He added that Tanzania looks forward to working with Dangote Group as part of a broader vision of accelerating Pan-African industrialisation and strengthening regional manufacturing capacity.
The Minister also highlighted the importance of local refining capacity in improving Africa’s energy security, particularly in light of recent disruptions in global oil markets.
Referring to the impact of tensions around the Strait of Hormuz on global fuel prices, he said increased refining capacity from facilities such as the Dangote Petroleum Refinery would help cushion African economies against external shocks.
According to him, affordable and reliable energy remains one of the most important drivers of economic development, noting that expanded refining capacity across the continent would contribute significantly to lowering energy costs and improving the quality of life for millions of Africans.
The Tanzanian delegation was in Nigeria to follow up on discussions held earlier this year between President Samia Suluhu Hassan and Mr Dangote regarding the expansion of Dangote Group’s investment footprint in Tanzania.
The East African nation reaffirmed its commitment to deepening economic cooperation with Dangote Group, expressing strong interest in attracting new investments in fertiliser production, energy and industrial infrastructure to support the country’s long-term development agenda.
“We have come here to make a follow-up on what they deliberated with our President in terms of further Dangote investments in Tanzania,” Mr Mkumbo said.
By Aduragbemi Omiyale
One of the leading brewers and beverage companies listed on the Nigerian Exchange (NGX) Limited, Champion Breweries Plc, has expressed its commitment to strengthening its market position.
The beer maker gave this assurance while reacting to its financial performance for the first half of 2026, which was strong, driven by solid commercial performance, improved operational efficiencies, and the successful expansion of its business portfolio following the acquisition of EnjoyBev B.V.
In the period under review, the organisation boosted its growth platform through strategic investment, delivered resilient operating performance, and successfully transitioned to a new group structure.
Its revenue reached N35.73 billion, while second-quarter revenue amounted to N21.37 billion. Operating profit stood at N6.17 billion, and profit after tax attributable to the group was N2.65 billion, with second-quarter profit after tax of N1.76 billion.
The firm also successfully completed the acquisition of an 80 per cent equity interest in EnjoyBev B.V., strengthened its capital base through a successful capital raising programme that increased shareholders’ equity to N69.08 billion, and maintained full compliance with NGX free float requirements, with free float increasing to 25.72 per cent as of June 30, 2026.
“The first half of 2026 marks a defining chapter in Champion Breweries’ journey. We have not only delivered a strong operating performance but also successfully transformed our business into a broader beverage group with an expanded platform for sustainable growth.
“While higher finance costs associated with our strategic investment programme impacted profitability during the period, our underlying business remains strong.
“The combination of disciplined commercial execution, continued investment in our brands and route-to-market capabilities and improving operational efficiency positions us well for future growth.
“We remain focused on creating long-term value for shareholders, strengthening our market position, and capturing the opportunities presented by our expanded business platform,” the acting chief executive of Champion Breweries, Mr Rasheed Adebiyi, said.
For businesses operating across borders, payments are no longer simply the final step in a transaction. The way money moves can influence where a company sells, how quickly it can enter a new market, and how easily customers can complete a purchase. As digital payment methods become more diverse, businesses are adjusting not only their checkout options but also the way payment processes fit into wider operations.
This shift is particularly visible in international commerce. A company can now serve customers in multiple markets without relying on a single payment method or a traditional physical presence in each location. Digital payments have become part of the infrastructure that supports increasingly distributed business models.
A More Connected Payment Environment
Global commerce has created a more complicated payment environment. Customers in different countries may have very different expectations about how a purchase should be paid for. Some markets rely heavily on cards, while others have seen rapid adoption of digital wallets, bank-based payment methods, or other local alternatives.
For businesses, this variety creates both opportunities and practical challenges. Offering payment options that customers recognize can reduce friction during a transaction, while supporting several markets may require businesses to work with different payment technologies and providers.
Digital payments have therefore become closely connected to market expansion. A company entering a new country does not only need to consider demand for its products or services. It also needs to understand how customers in that market prefer to pay and whether its existing payment setup can accommodate those expectations.
More Choices for Businesses and Customers
The growth of digital payments has expanded the range of choices available on both sides of a transaction.
Consumers can increasingly choose between cards, digital wallets, bank transfers, mobile payment methods and other forms of electronic payment. Businesses, meanwhile, can select from different technologies and payment providers depending on their markets and operational requirements.
This development has changed the role of payments in the customer experience. Payment is no longer necessarily treated as an isolated technical process that begins only after a purchasing decision has been made. The available options can influence whether a customer completes a transaction in the first place.
For international businesses, flexibility can be particularly important. A payment method that is familiar and convenient in one market may be less relevant in another. Supporting a broader selection can allow businesses to adapt their payment experience without changing the underlying product or service.
The Rise of Alternative Payment Models
Traditional card and bank-based payments remain important, but the digital payments landscape has expanded beyond these established methods. Digital wallets, account-to-account payments, mobile solutions and cryptocurrency have all contributed to a broader definition of what a digital transaction can look like.
Cryptocurrency remains a smaller part of the overall payments landscape, but it has created another category of payment technology for businesses to consider. Specialized solutions such as BitHide can provide businesses with tools for handling crypto payments as part of their broader payment operations.
The significance of this development is not necessarily that every business will adopt cryptocurrency. Rather, it demonstrates how the payment landscape continues to diversify. Businesses operating internationally can increasingly choose from different models instead of relying on a single approach across every market.
Payments Are Becoming Part of Business Operations
As payment systems become more digital, their role increasingly extends beyond accepting money from customers. Payment processes can interact with accounting, order management, customer records and other parts of a company’s digital operations.
This is particularly relevant for businesses with large transaction volumes or customers in multiple countries. Manual payment processes can become difficult to manage as the number of transactions, currencies and payment methods increases. Digital systems can help businesses organize these processes within a wider operational framework.
The result is a gradual shift in how companies think about payments. Instead of treating payment processing as a separate function, businesses are increasingly considering it alongside other elements of their digital infrastructure.
This does not mean that every company needs a complex payment setup. The appropriate approach depends on the business model, target markets, transaction volumes and types of customers involved. For some companies, a small number of established payment methods may be sufficient. Others may need a more flexible arrangement because of the markets they serve.
Adapting to Different Markets
One of the more important changes brought by digital payments is the ability to adapt payment experiences to different markets.
International businesses often face differences in consumer behavior, financial infrastructure and preferred payment methods. A payment strategy that works well domestically may therefore require adjustments when a company expands internationally.
Digital payment technology can make these adjustments more practical, but it does not remove the need for local market knowledge. Businesses still need to understand customer preferences, applicable requirements and the practical costs associated with different payment methods.
This makes payment strategy part of international expansion rather than an issue that can be addressed only after a new market has been entered.
What Comes Next for Global Businesses
The digital payments market is likely to continue becoming more diverse as businesses and customers adopt new ways of moving money. The important change may not be the replacement of one payment method by another, but the growing ability to combine different methods according to the needs of a particular business or market.
For global companies, this creates an emphasis on adaptability. Payment systems need to support the way a business operates rather than becoming a limitation on where and how it can sell.
Digital payments are consequently becoming more than a convenient alternative to cash or traditional payment processes. They are increasingly connected to international commerce, customer experience and day-to-day business operations. As payment options continue to develop, companies that can adapt their payment strategies to different markets will be better positioned to operate in an increasingly digital global economy.
