Date: 11-05-2020

If there is one thing that the current COVID-19 and oil prices crises have demonstrated, it is that African oil-producing nations are still not economically diverse. Despite repeated actions taken by governments over the past decade to diversify their economies, especially following the 2014-2016 African recessions, not enough has been done. Economic crises in African oil-producing countries this year will be so severe they could reach double-digit economic recessions.

As countries like Nigeria, Angola, Gabon, Congo, or Equatorial Guinea deal with unprecedented lows in oil prices and struggle to keep their economies afloat, the current downturn could well be the historic turning point these economies need to seriously put diversification at the top of economic policies priorities.

To be clear, diversification does not mean the end of oil, quite the contrary. Efficient diversification goes through better use of oil revenues to fuel other sectors of the economy, build a stronger industrial base, and create jobs. But it also means diversifying national hydrocarbons output and increasing production, monetization, and valorization of natural gas.

In fact, for many African oil producers, successful economic diversification depends on their abilities to increase hydrocarbons production and make better use of flared and associated natural gas to generate power for industries, produce fertilizers for farmers and manufacture petrochemicals for their growing domestic markets.

With 188.8 Tcf of proved natural gas (BP, 2019), Nigeria has Africa’s largest discovered gas reserves and the 10th biggest in the world. In 2019, it was the world’s sixth-largest LNG exporter with a 6 percent global market share, ahead of Algeria (3 percent), Angola (1percent) and Equatorial Guinea (1percent). Yet, out of the 20.8 million tonnes of LNG Nigeria exported last year (IGU, 2020), 54 percent went to Europe, 37 percent to Asia, and the rest to the Americas and the Middle East. In short, none of Nigeria’s LNG goes to Africa. The only Nigerian gas that reaches African markets is the limited, and often interrupted supply that goes through the West African Gas Pipeline (WAGP) to Benin, Togo, and Ghana. Even then, the lack of stable gas supplies from the pipeline has forced these countries to rely on additional domestic or international sources of gas to fuel their power plants.

“The current situation in global and African energy markets is giving tremendous opportunities for Africans to take a strong position on economic diversification. In that aspect, Nigeria is the country that could take the lead position in becoming the African gas producing platform the continent needs,” stated Kola Karim, CEO & Managing Director of Shoreline Natural Resources during an Invest Africa podcast last week. He is right, and unless the current crisis leads to serious gas-market policies and initiatives to monetize gas across Nigeria and Africa, oil dependence-related hardships will continue and only get stronger.

More needs to be done to monetize gas in Africa. Thankfully, the continent has demonstrated several successful gas monetization projects across industries and beyond just electricity generation. In Benin City, Nigeria, NICPO has been developing for years a network of CNG outlets that take customers beyond petrol and diesel and offer them a domestic, more cost-efficient, and cleaner fuel to put in their cars.

On a bigger scale, domestic gas is already being valorized in the Indorama Eleme fertilizers plant in Port Harcourt, currently under expansion, and in the soon-to-be commissioned Dangote Fertilizers plant in Lekki. In neighboring Cameroon, Victoria Oil & Gas has been supporting the development of a strong industrial and manufacturing base on the outskirt of Douala by connecting several customers to natural gas.

Also in the Gulf of Guinea, Equatorial Guinea is building a regasification terminal to process its own natural gas across several industries such as power and cement on its mainland. Further North in Abidjan, the government has been pushing for the procurement and deployment of CNG buses that also run on domestic natural gas. Success stories abound all around us, yet they need to be expanded and replicated for Africa to truly embrace the benefits of economic diversification.

For this ambition to be achieved, the development of enabling environments and sound market policies is crucial to facilitate investments into gas production and gas transportation and processing infrastructure.

“Nigeria has already taken the opportunity to maximize its gas with the West Africa Gas Pipeline. As an industry, if we are able not only to ensure stable gas supplies through that pipeline but also lay additional connections to North Africa and Europe through Niger, and to East and Southern Africa through the Central African Republic, then a country like Nigeria gives itself the opportunity to industrialize the whole continent through the production and export of its domestic gas while creating several thousand jobs,” Kola Karim added.

In that regard, incentives to be given to such critical midstream infrastructure, along with market policies to support gas valorization, form key parts of the African Energy Chamber’s Common-sense Energy Agenda released this month.

Africa needs to get used to a post-COVID-19 world where USD 50/barrel is the new USD 100, and where diversification needs to be the key priority in order to create a new hedge and natural buffer against future downwards cycles. “Diversification needs to become our new reality,” added Kola Karim. “For Nigeria, it is time to stand up and focus on gas to become the gas platform producer that the continent needs. This pandemic should afford us all the opportunity to view our countries from an internal point of view and prepare ourselves and our economies for the next big crisis,” he concluded.










Read also

The Year Global Health went Local: Gates Foundation Annual Letter

“COVID-19 has cost lives, sickened millions, and thrust the global economy into a devastati...





Read also

ROCKSTONE enters its first real-estate market in Ethiopia with one billion birr investment

ROCKSTONE Ethiopia has committed One Billion Birr to building KEFITA, a G+20 exclusive apartment ...





Read also

Djibouti: Just another country blinded by Chinese money?

Djibouti’s future diversification of its economy through foreign investment continues to be...





Read also

Small-scale Traders at the Heart of Efforts to Accelerate Trade and Investment

Industry experts meeting this week for a virtual discussion focused on resetting, retooling and r...





Read also

Why You Should Eat Fasting Food Everyday

A vegan or plant-based diet excludes all animal products, including meat, dairy, and eggs. When p...





Read also

Ginger Everything, Thank Us Later

Most of us put ginger in our tea and it is also one of the main ingredients in making Berbere (a ...





Read also

UNIDO ITPO OFF-Grid Expo, Conference Digital with a Focus on Energy Poverty

OFF-GRID Expo + Conference 2020 hosts its first digital edition in partnership with ...





Read also

Governance Progress Slow in Africa, 2020 IIAG Shows

Ethiopia is ranked at 31st out of 54 countries on the 2020 Ibrahim Index of African Governance th...





Read also

25 young African Agripreneurs Advance to ‘boot camp’ in AfDB’s Competition

Twenty-five young African agripreneurs have advanced to the “boot camp” final round o...





Read also

Unmatched Investment Returns in Africa Despite the Challenges, says AIF

Africa Investment Forum (AIF) Senior Director Chinelo Anohu last week joined business leaders in ...





Read also

Prime Bank launches SimbaPay - International Money Transfer

Prime Bank, a private bank in Kenya, has partnered with London-based FinTech SimbaPay, to launch ...





Read also

Key Health Services in Africa Heavily Affected due to COVID

The COVID-19 pandemic has dealt a heavy blow to key health services in Africa, raising worries th...





Read also

African Development Bank Supports the Rwanda Coding Academy

The African Development Bank has signed a grant agreement with the Ministry of ICT and Innovation...





Read also

Turmeric It! for These 10 Reasons

Eat it in your food, drink it in your tea or put it on your face; this versatile spice is...





Read also

Gulf Based Brand MASER increasing ties to Africa through Innovation

Having recently received capital injection from a British private equity firm, Prateek Suri, foun...





Read also

Admassu Tadesse, TDB President Join Keynote Lineup at Africa Fintech Summit 2020

A three-day virtual event held this November 9, 10, and 12, Africa Fintech Summit 2020 will open ...





Read also

14th Edition of Addis International Film Festival

Initiative Africa is back with the 14th edition of Addis International Film Festival (AIFF) that ...





Read also

COVID-19 Driving Innovation in Health

The COVID-19 pandemic has galvanized the development of more than 120 health technology innovatio...





Read also

African payments for African development

The statistics that hover uncertainty around Africa are not ones that should make the continent p...





Read also

The story and drive behind the creation of Dimbit

The animation industry has developed rapidly as a result of new technology and marke...





Read also

Jack Dorsey to Keynote at Africa Fintech Summit 2020

Co-Founder, Chairman and CEO of Square, Inc Jack Dorsey is announced as the closing keynote for t...





Read also

New platform brings Free, Premium eLearning to Africa’s Jobseekers

atingi.org, a free-to-use eLearning platform...





Read also

HYATT Regency to open in Cape Town coming December

Hyatt Hotels Corporation announced that a Hyatt affiliate has entered into a management agreement...





Read also

Director of Africa CDC becomes winner of the 2020 Global Goalkeeper Award

Dr. John N. Nkengasong, director of the Africa Centres for Disease Control and Prevention (Africa...





Read also

Annual Goalkeepers Report shows COVID-19 has stalled 20 years of progress towards SDGs

The Bill & Melinda Gates Foundation launched its fourth annual ...





Read also

African Development Bank ranks 4th on global index of transparency

Publish What You Fund has ranked the African Development Bank fourth out of 47 global development...





Read also

Dangote cement sustains 54,000 jobs in 4 African countries

President of Dangote Group, Aliko Dangote has said that despite the challenging economic sit...





Read also

Sudan embraces digital payments to build a more inclusive economy

As part of its vision to transform its economy, the Republic of Sudan announced a new commitment ...





Read also

Festering Sickness

What is more tangible than the right to health? Health is immediate and demanding. Sickness disto...





Read also

A good Tian

Open up Google (or if you’re a paranoid psychopath like me, DuckDuckGo) and search for Tian...





Read also

PepsiCo partners with The Mekedonia Humanitarian Association

PepsiCo partners with The Mekedonia Humanitarian Association to distribute more than ...





Read also

Africa Business Heroes 2020

The ANPI is the Jack Ma Foundation’s flagship philanthropic entrepreneur program in...





Read also

Bill & Melinda Gates Foundation pledges $1.6 billion to Gavi, the Vaccine Alliance

SEATTLE (June 4, 2020) — The Bill & Melinda Gates Foundation today announced a five-yea...





Read also

Gemcorp, once again found reliable by the Public Procurement and Property Disposal service (PPPDS)

Addis Ababa – May 20, 2020 – UK based Gemcorp announced today that it has won yet ano...





Read also

Splice Responsibly

The act of god(s) is the act of creation. Countless religions have myths recounting the genesis o...





Read also

Warning: Oil producing African countries need to diversify economy

If there is one thing that the current COVID-19 and oil prices crises have demonstrated, it is th...





Read also

Ireland becomes a shareholder in the African Development Bank Group

The Republic of Ireland has become the African Development Bank Group’s 81st shareholder, f...





Read also

Tariku Shiferaw’s “One of These Black Boys” to be showcased in Frieze New York

Addis Fine Art announced its participation in Frieze New York 2020 for the first time, presenting...





Read also

Access Mental Health: As Easy as Tapping on Your Phone

Mental health includes emotional, psychological, and social well-being. It affects how we thi...





Read also

Facebook expanding its COVID-19 Information Center to more countries

Facebook is expanding its Coronavirus Information Center to 24 more countries in Africa as part o...





Read also

Gates Foundation Stepping up for Global COVID-19 Response

It is to be recalled that Bill and Melinda Gates Foundation committed more than USD 250 million t...





Read also

Total Ethiopia contributes 17 Million ETB to fight against COVID-19

Since the outbreak of the pandemic COVID-19 Total Ethiopia management is joining hands with is st...





Read also

Gender and Ebola: Lessons for COVID-19

Faced with the looming specter of the COVID – 19 pandemic, it is of utmost importance that ...





Read also

Bill & Melinda Gates Foundation announces additional funding of USD 150 million to help fight COVID-19

The Bill and Melinda Gates Foundation announced an additional funding of USD 150 million to the g...





Read also

Africa Netpreneur Prize Initiative application officially launched; prize money upped by 500k

Applications for the Africa Netpreneur Prize Initiative (ANPI), spearheaded by the Jack Ma Founda...





Read also

World leaders call on G20 to act immediately in response to COVID-19

165 past and present leaders call on the G20 to approve now USD 8bn emergency global healt...





Read also

Medical Supplies for Africa from Jack Ma Foundation Arrived in Addis Ababa

  Cargo flight containing over 6 million medical items including face masks, test ...





Read also

Hackathon Workshop on “A Digital Solution for Efficient Vote Counting and the Announcement of Election Results” in Ethiopia

Ethiopia Hacks! is conducted in partnership with the Google Developers Group (GDG- Addis) and the...





Read also

Bill and Melinda Gates Release 2020 Annual Letter

Addis Ababa – February 10, 2020 Today, Bill and Melinda Gates shared their 2020 A...





Read also

How to successfully seize Africa’s many opportunities

How to successfully seize Africa’s many opportunities By Jordan ...





Read also

Anti-Illicit Trade discussions held in Harar: Stopping Contraband requires the efforts of all stakeholders

On January 16, 2020, Customs Commission, in collaboration with Spotlight Communication and Marketing...





Read also

Alibaba Netpreneur Ethiopia

17th December 2019 Alibaba Netpreneur Training Program Opens Applications for Ethiopian...





Read also

Global Business Forum Africa 2019

Heads of state, ministers, policymakers, prominent business leaders, investors and entrepreneurs ...





Read also

The Ethiopia Electric Utility company (EEU) partners with Motorola Solutions to keep employees safe and improve service for customers.

The Ethiopia Electric Utility company (EEU) announced today the deployment of a new mission-critical...





Read also

Federal Police Commission deployed a Motorola Solutions secure communications system in the region of greater Addis Ababa.

Ethiopian Federal Police Commission announced the deployment of Addis Ababa’s regional proj...





Read also

The Economist Event’s Global Illicit Trade, Addis Ababa, June 25th.

Addis Ababa, June 19th, 2019 - The Economist Events brings Global Illicit Tr...





Read also

Asia Star of IMD World Competitiveness Ranking

Singapore has ranked as the world’s most competitive economy for the first time since 2010,...





Read also

Noble Cup to the Rescue

Menstrual Hygiene Day (MHD, MH Day in short) is an annual awarness day on May 28 to put the ...





Read also

Have you seen her?

Ayehuat phenomena is running wild across Addis Ababa. People got caught off guard when beautiful ...





Read also

When Tradition and Creativity Meet

On Wednesday, January 2, 2019, hundreds gathered at the National Theater to celebrate the one yea...





Read also

UN Entities Support Ethiopia’s Quest for Policy Coherence for the SDGs

The United Nations Department of Economics and Social Affairs (UNDESA), the United Nations Develo...





Read also

Removal of Trade Barriers Inside Africa Necessary, says DP World Group Chairman

The key to African economic emergence lies in removal of barriers, increased connectivity between...





Read also

Looking for fine dining and cozy lounging?

One of the most memorable times of my university years was hanging out at Romina Café and ...





Read also

Op-Ed: Ethiopian Artefacts Held Hostage in Britain

Britain, home to some of the most fascinating and multicultural museums in the world, fin...





Read also

Chelina in All Her Truth

It’s been a long time coming, but it’s finally here. Chelina released her...





Read also

New App to Help Ethiopian Women Identify Breast Cancer

According to research, breast cancer is the second most often occurring cancer among wome...





Read also

How Agricultural Investment Affects Africa's Economic Growth

The lack of commitment in agriculture investment is halting economic growth in Africa...





Read also

The Next Creative Capital

Ethiopia is the fastest growing economy in the world. It is undeniable that fashion is cu...

 

About Us

Zare Journal is a Pan-African Digital Media, based in Addis Ababa, Ethiopia, that aggregates news primarily on the African Continent.

Follow us on our socials to get updates and even more Zare content.

Contact Us

Zare Journal is a Pan-African Digital Media based in Addis Ababa, Ethiopia, that aggregates news primarily on the African Continent. Follow us on our socials to get updates and even more Zare content. For inquiries about placing advertisements and advertorials as well as publishing press releases, contact us at zarejournalmedia@gmail.com or call us direct/ WhatsApp at +251911400876