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Africa Needs to Eradicate Energy Poverty—NJ Ayuk

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NJ Ayuk Energy Poverty

By Kester Kenn Klomegah

Understandably, energy is expected to drive Africa’s economic prosperity. In order to make great strides in the industrial sector and attain a high-level of sustainable development, for instance, energy is the key determining factor, argues NJ Ayuk, Executive Chairman of the African Energy Chamber, a pan-African company that focuses on research, documentation, negotiations and transactions in the energy sector.

According to him, scaling up Africa’s production capacity in order to achieve universal access to energy is a challenging task and points to the need for a transformative partnership-based strategy that aims to increase access to energy for all Africans.

He further talks about transparency, good governance and policies that could create a favourable investment climate, especially in the energy sector.

Speaking in an insightful interview with Kester Kenn Klomegah in early July 2021, NJ Ayuk unreservedly calls for strong foreign partnerships in harnessing and distribution of energy, stresses the significance of foreign investment in large-scale exploration projects in African countries.

Within the context of the newly created African Continental Free Trade Area (AfCFTA), he suggests that politicians, investors and stakeholders need to change the business perception and create an entirely new outlook into the future. Here are the interview excerpts:

What are the popular narratives about energy sources, production and utilization in Africa? In your expert view, how would you characterize energy needs in Africa?

The popular narratives are the prevalence of energy poverty on the continent. Most of the oil and gas producing countries have some kind of conflict going on in the area which affects the local people and the companies which choose to invest in these areas. For a country like Ghana, for example, we have seen the upside of the effective way of carrying out oil production, a major contribution has been its transparency and its policies.

African countries do, however, suffer from the policies they draft which take years to implement, and if implemented take long to administer the contracts for production to take effect. With that said, the effect on the upstream sector automatically affects the midstream and downstream, sectors, which essentially affects the economy of the different countries.

It’s without a doubt that energy poverty needs to be eradicated. Africa has the world’s lowest per capita energy consumption: with 16 per cent of the world’s population (1.18 billion out of 7.35 billion populations), it consumes about 3.3 per cent of global primary energy. Of all energy sources, Africa consumes the most oil (42 per cent of its total energy consumption) followed by gas (28 per cent), coal (22 per cent), hydro (6 per cent), renewable energy (1 per cent) and nuclear (1 per cent). South Africa is the world’s seventh-largest coal producer and accounts for 94 per cent of Africa’s coal production.

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Africa’s renewable energy resources are diverse, unevenly distributed and enormous in quantity — almost unlimited solar potential (10 TW), abundant hydro (350 GW), wind (110 GW) and geothermal energy sources (15 GW). Energy from biomass accounts for more than 30 per cent of the energy consumed in Africa and more than 80 per cent in many sub-Saharan African countries. Sub-Saharan Africa has undiscovered, but technically recoverable, energy resources estimated at about 115.34 billion barrels of oil and 21.05 trillion cubic metres of gas.

Do African leaders see some of the controversial issues, in the same way, as you have discussed above?

In my opinion, African leaders do take heed of what has been discussed above but are too slow to tackle the issues, which eventually then build up. The effect of that is that once they have eventually tackled the first problem, they realize others have piled up and have to continue digging. Leaders also need to start bringing young people to the table who have fresher eyes and valuable contributions because of the times they live and are growing up in. A major contribution to that is the internet.

How do you assess the impact of energy deficit most especially within the context of the fourth industrial revolution? Is energy finance the determining factor here?

Firstly, we need good governance that creates an enabling environment for widespread economic growth and improved infrastructure. African leaders need an unwavering determination to make Africa work for us, even when there are missteps and things go wrong.

Without stability, projects and contracts cannot take effect. A recent example is an insurgency in Mozambique which has claimed lives but put a halt to a project which would have had a positive impact not only on Mozambique and its region but the entire continent. But now, we have to look ahead and not dwell on the shortcomings or pitfalls.

In order to change the tide and spur a post-pandemic recovery in the energy sector that will also enhance overall economic growth in Africa, African leaders must double their efforts to attract investment into their energy sectors. They must put in place timely and market-relevant strategies to deal with external headwinds like the drive to decarbonize globally and evolving demand patterns for energy internally and hydrocarbons globally. They must end restrictive fiscal regimes, inefficient and carbon-intensive production, cut bureaucracy and other difficulties in doing business that is preventing the industry from reaching its full potential.

What individual countries have set exceptional examples, at least, in offering energy and its utilization both in the urban cities and remote towns?

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Consider the impact of energy deficiency. Approximately 840 million Africans, mostly in sub-Saharan countries, have no access to electricity. Hundreds of millions have unreliable or limited power at best.

Even during normal circumstances, energy poverty should not be the reality to most Africans. The household air pollution created by burning biomass, including wood and animal waste, to cook and heat homes has been blamed for as many as 4 million deaths per year. How will this play out during the pandemic? For women forced to leave their homes to obtain and prepare food, sheltering in place is nearly impossible. What about those who need to be hospitalized? Only 28 per cent of sub-Saharan Africa’s health care facilities have reliable power. Physicians and nurses can’t even count on the lights being on, let alone the ability to treat patients with equipment that requires electricity — or store blood, medications, or vaccines. All of this puts African lives are at risk.

Africa does not need social programs, even educational programs, that come in the form of aid packages. What’s more, offering Africa aid packages to compensate for a halt or slow-down of oil and gas operations will not do Africans any good. This is not the time for Africa to be calling for more aid.

Africa has been receiving aid for nearly six decades, and what good has it done? We still don’t have enough jobs. Investment creates opportunities. We, as Africans, must be responsible. Our young people should be empowered to build an Africa we all can be proud of. Relying on the same old policies of the past, relying on aid, simply isn’t going to get us there.

Do you support expert views about “energy mix” — a combination of wind, solar, hydro and nuclear power? Why nuclear is still bug down with problems in Africa?

Straightway I would like to say yes. Africa must continue to bank on all forms of energy to address its shortfall in Energy production and distribution. From country to country, access to the generating resource will differ. Therefore, countries should focus on those resources to which they have easy and affordable access. Nuclear continues to be least accessible in Africa, due to the absence of technology and the high upfront construction costs associated with building such plants.

Africa has an almost unlimited renewable energy capacity, abundant access to solar, wind, hydro, and geothermal sources; however, except for a few large-scale projects, such potential is not adequately developed. What the continent needs is to reach a balance between reaching its energy transition goals and exploiting its natural resources, particularly natural gas, to ramp up power generation, generate jobs, and as a source of revenue. Natural gas’ potential to breathe new life into struggling African economies that are still reeling from the brutal economic impacts of the COVID-19 pandemic.

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Natural gas, affordable and abundant in Africa, has the power to spark significant job creation and capacity-building opportunities, economic diversification and growth. I am not saying that African nations should continue oil and gas operations indefinitely, with no movement toward renewable energy sources. I am saying that we should be setting the timetable for our own transition, and we should be deciding how it’s carried out. What I’d like to see, instead of Western pressure to bring African oil and gas activities to an abrupt halt, is a cooperative effort.

A number of foreign countries and private energy investing giants have shown interest in the energy sector. How do you assess the dynamics of their performance on the continent?

Local content is a pillar of the industry’s sustainability efforts. Sustainable development of African economies can only be attained by the development of local industry — by investing in Africans, building up African entrepreneurs and supporting the creation of indigenous companies. Oil companies have an unmatched ability, and a profound responsibility, to support countries in shaping an economy that works for all Senegalese and preserves their freedoms.

What is your view of Russia, considered as an energy giant, for instance, teaming up with China in Africa? Can both have a unified approach to collaborating on issues of energy projects in Africa?

First and foremost, Africa has already made an indelible mark in the oil and gas industry. I think Russian companies have to do more to really get involved. I always say that Africans want to get married, but Russians just want only to date. We need to change that and become more accountable. Both our compatriots expect better and more from our energy sectors.

As far as China and Russia are concerned, if both countries can avoid applying a “one size fits all” approach, so much good can come out of our oil and gas relationship with Russia. Africa has a lot to gain from Russian involvement and vice versa. Both must work towards empowering each other with concrete projects that bring benefit to investors and communities in which projects are situated. To be fair, positive developments from Russia and China don’t go unnoticed as their active presence in the continent leaves room for greater opportunities towards the energy mix.

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Zimbabwe Woos More Russian Investors to Develop Economy

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Zimbabwean Minister SEKAI NZENZA Zimbabwe Woos

By Kester Kenn Klomegah

Zimbabwe, among a few African countries, featured prominently at this year’s edition of the Russian International Industrial and Trade Fair during the first week of July in Ekaterinburg, a city in the Urals region about 1,700 kilometres from Moscow.

About 76 per cent of exhibitors are top managers of Russian and foreign companies, heads of regions and representatives of federal authorities.

Widely referred to as INNOPROM, it is the main industrial, trade and export platform organized annually in Russia. Due to COVID-19, about 90 countries participated in the trade fair held under the theme Flexible Manufacturing in Ekaterinburg, according to INNOPROM official website.

Industry and Commerce Minister, Dr Sekai Nzenza, headed a sizeable business delegation, including officials from the Confederation of Zimbabwe Industries (CZI), Zimbabwe Investment Development Agency (ZIDA), Zimtrade, the CEO Roundtable, the Zimbabwe National Chamber of Commerce (ZNCC) and the Industrial Development Corporation of Zimbabwe (IDCZ).

Zimbabwe and Russia have an overwhelmingly close diplomatic relationship. Russia has been stepping up economic investment in Zimbabwe. Based on that friendship, Nzenza was invited by Russia’s Minister of Industry and Trade Denis Manturov who was also the fair’s main guest.

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Nzenza’s office told Business Weekly that Zimbabwe had fruitful engagements with Russian companies that have expressed interest in the value addition of minerals such as tungsten, lithium and iron.

Russian firms are also keen to explore opportunities in agro-processing, phosphate, fertilizer and medical equipment as well as partnering local institutions in research and development.

There is scope for technology transfer from Russia to help retooling of local companies. Given the distance between the two countries, the perishability of fresh produce has been identified as a major impediment for growing exports to Russia, but the two countries have agreed to “work on that logistical challenge.”

Zimbabwe is currently exporting oranges to Russia and there is potential to increase exports of commodities such as garlic, ginger, macadamia, avocado, frozen fruits and vegetables as well as blueberries. Follow up meetings were held between business organizations in both countries.

She similarly told The Herald newspaper that the main focus participating at INNOPROM “is pushing Zimbabwe is open for business agenda and we are quite encouraged to participate at the fair.”

Russian companies are keen to invest in Zimbabwe’s various industries as the two countries further explore areas of economic cooperation. “The main focus is pushing Zimbabwe is open for business agenda we are quite encouraged to participate at the fair – an opportunity to meet potential Russian investors,” said Nzenza.

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As Zimbabwean Ambassador to the Russian Federation, Brigadier General Mike Nicholas Sango, noted in an exclusive interview with me, Russia and Zimbabwe have put in place structures and mechanisms for sustainable economic cooperation. Although Russia’s economy is under pressure from illegal sanctions and the depressed global economic environment, it is committed to assist Zimbabwe’s economic recovery.

He highlighted his government’s key priorities and expectations from Russia as follows:

Agriculture Support: Agriculture is the economic mainstay and provides 15% of GDP. Water harnessing through dam construction, irrigation mechanization, and agricultural machinery are key areas.

Infrastructure Development: Although the country has a fairly well-developed infrastructure, the road and rail infrastructure needs refurbishment and expansion to take trade volumes for the country as well as its neighbours to the north.

Mining: Zimbabwe is endowed with abundant unexploited resources.

Manufacturing: Zimbabwe’s manufacturing sector has been hit hard by illegal economic sanctions. Most industries have outdated and expensive to run machinery. They are in dire need of retooling, refurbishment and funding.

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Tourism: Zimbabwe hosts one of the wonders of the world, Victoria Falls. Investment in infrastructure development in the hotels would complement the opening by larger airports to accommodate larger body aircraft.

President Mnangagwa’s administration adopted Zimbabwe is open for business policy meant to woo investors to help revive the economy. In 2019, President Mnangagwa met his Russian counterpart Vladimir Putin where the two leaders agreed to deepen economic cooperation between the two countries. Russia is one of the major sources of the country’s foreign direct investment, particularly in the mining sector.

Zimbabwe is a landlocked country located in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Botswana to the south-west, Zambia to the north, and Mozambique to the east. The capital and largest city is Harare.

With an approximate population of 14.5 million, Zimbabwe is endowed with rich and extensive natural resources. It is one of the 16 countries, with a collective responsibility to promote socio-economic cooperation, within the Southern African Development Community (SADC) created in 1980.

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Pan-African Payments System to Help Africa Save $5bn Annually

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China Africa AfCFTA

By Adedapo Adesanya

The Secretary-General of the Africa Continental Free Trade Area (AfCFTA), Mr Wamkele Mene, has said that the planned launch of the Pan-African Payments and Settlements System (PAPSS) would save the continent an estimated $5 billion annually.

Mr Mene said this at the 2nd edition of the AfCFTA secretariat quarterly press briefing. He explained that the $5 billion would be saved from the accruals from conversions to Dollars.

He said that PAPSS, created in collaboration with the African Export-Import Bank (Afriexim bank), would address the currency conversion challenges for participating countries.

PAPSS is a centralised payment and settlement system created to serve the purpose of low cost and risk-controlled payment clearing and settlement system under intra-African trade.

He said that six countries had been set up for the pilot scheme, some of which include; Nigeria, Ghana and Sierra Leone.

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Mr Mene projected that by the end of 2021, the secretariat would be in a position to reveal the platform’s availability for all countries to switch.

“There is an objective that one day, Africa would be a monetary union.

“Converting the about-42 currencies in Africa with its attendant cost of over five billion dollars yearly is a whole lot and so we want to reduce and eliminate this for the purpose of trading.

“Local banks would be able to switch to the platform as we are in consultation with the central banks and by the end of the year, we would be in a position to say the platform is available for all African countries that want to switch to it.

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“Afriexim bank has invested over one billion dollars and it is a strong signal that the AfCFTA would work.

“If you run a Small and Medium Enterprise (SME) and you have to use a foreign platform for the transaction, which is constraining and costly.

“With this system of payments, we would be able to enhance the effectiveness and competitiveness of SME as it addresses the constraints and costs associated with trade,” he said.

Mr Mene also noted that the Rules of Origin mechanism of trade was at 86 per cent completion, even though the secretariat was gearing for 90 per cent completion before application.

The AfCFTA chief stated that sensitisation and advocacy campaigns on the intricacies of the AfCFTA were a shared responsibility between participating states and the AfCFTA secretariat.

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He revealed that an Africa business forum for the whole continent would be hosted later in the year to raise additional awareness.

This, Mr Mene, said would also serve as a complementary step to what the various participating countries’ governments were already doing nationally on sensitisation.

“It is very important that the private sector is aware that there are export opportunities that this market creates and how they can maximally benefit from it.

“In all my visits to various participating countries, I have met with the private sector as a way to inform and incorporate them into what the AfCFTA is about,” he said.

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World

Gunmen Assassinate Haitian President Jovenel Moise

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Jovenel Moise

By Aduragbemi Omiyale

The President of Haiti, Mr Jovenel Moise, has been assassinated by some gunmen, a statement from the country’s officials have confirmed.

The leader of the Caribbean nation was killed in the early hours of Wednesday, the Interim Prime Minister, Mr Claude Joseph, confirmed.

Mr Moise, 53, was attacked in his home and his wife, Mrs Martine Moise, was injured in the process. She has been taken to the hospital.

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At the moment, the police and military are in charge of security in Haiti, while Mr Joseph is now in control of the government.

For more than a year, Mr Moise had been ruling the country with a population of over 11 million by decree and his tenure was set to expire.

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His stay in office had been viewed by many in Haiti as illegitimate as his term legally ended in February 2021. Already, there have been insinuations that this killing was from a coup, though this has not been asserted.

In a report by AP, the Interim Prime Minister was quoted to have said the assassination was carried out by foreign agents, who spoke in Spanish.

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He has already condemned the act, describing it “hateful, inhumane and barbaric,” but assured that, “The country’s security situation is under the control of the National Police of Haiti and the Armed Forces of Haiti.”

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