popular articles

Africa, The Natural Resources Challenge

In Africa, sustained investment is needed to increase energy access and economic growth on the continent.

Please share:

In Africa, sustained investment is needed to increase energy access and economic growth on the continent. At Africa Oil Week in Cape Town, the energy crisis underscored the dependence of the global economy on fossil fuels.

Vast natural resources

Africa has an enormous potential of untapped natural resources. In the last decade, 61 billion barrels of oil equivalent (boe) have been discovered on the continent. Natural gas represents the bulk of these resources, a large part of which has yet to be developed.

The industry has been discovering major deepwater oil deposits over the past decade. The Italian company ENI is currently exploiting the “Baleine” oil and gas field, which will be discovered in 2021 in Côte d’Ivoire. In addition, TotalEnergies and Shell are discovering the Venus and Graff fields in Namibia with unprecedented development potential.

With these three major discoveries comes the prospect of exploiting barrels of oil at lower cost. Natural resourceinvestment programs in Africa are on the rise. In addition, the latest leading discoveries will fuel robust development projects.

In a context of global energy expenditure suffering from limited growth, Africa would thus outperform all other regions. In addition, investments are no longer limited to Nigeria, Angola or Congo. They now extend to Uganda, South Africa, Côte d’Ivoire, Mozambique and probably Namibia.

An acceleration of the process

In contrast, nearly half of the expenditures after 2025 are under projects subject to DIF agreements. Thus, capital allocation seems more vulnerable than ever and dependent on commodity market fluctuations. The executive committees adhere to strict budgetary discipline, preferring to redirect surplus cash to the shareholders.

Investors want to maximize the profitability of projects. Minimizing the time between the discovery of new deposits and the start of production is a challenge. Indeed, the creation of a revenue stream becomes a major axis of the development strategy.

At the same time, governments are showing interest in accelerating the process. One of their goals is to increase their revenue share. The budgetary resources of African producer states will reach the highest level in a decade.

The combined revenues of African governments from the exploitation of these natural resources would exceed $100 billion by 2022. It is in the interest of these governments to support this increase. However, Africa must also accompany this growth.

Structural developments and prospects

The first step would be to minimize bureaucracy in order to speed up the issuance of permits and operating licenses. Strengthening a supply chain that is aligned with the needs of the industry is also a fundamental prerequisite. Africa needs to maintain investor confidence through transparency and good governance.

Fiscal stability will encourage the growth of these revenues. Companies are focusing on low-cost, decarbonized assets and divesting from more mature, expensive assets. However, new local and independent players are entering the market in Africa.

The compatibility of these projects with the goal of zero net emissions is crucial. At the COP27 in Egypt, Africa, which is responsible for 4% of CO2 emissions, will reaffirm the development of fossil fuels. It is the condition for economic development and the supply of energy to nearly 500 million people.

Africa has considerable renewable resources in solar, wind and hydro power as well as forestry. Respecting the environment is a major challenge, building a low-carbon future. The challenge combines economic growth and improved living conditions, while feeding the export market.

Register free of charge for uninterrupted access.

Publicite

Recently published in

The European Investment Bank is funding a €732 mn expansion plan to modernise and stabilise the electricity network in the Ostsachsen region by 2027.
The European Commission is launching a large-scale call for projects to finance priority energy infrastructure between Member States and neighbouring countries, with a maximum budget of €600mn from the CEF Energy programme.
The European Commission is launching a large-scale call for projects to finance priority energy infrastructure between Member States and neighbouring countries, with a maximum budget of €600mn from the CEF Energy programme.
The National Commission for Public Debate opens a three-month consultation in Fos-sur-Mer on the industrial future of this strategic zone, ahead of state decisions on 40 projects with major economic and energy implications.
The National Commission for Public Debate opens a three-month consultation in Fos-sur-Mer on the industrial future of this strategic zone, ahead of state decisions on 40 projects with major economic and energy implications.
François Bayrou souhaite engager un débat sans vote au Parlement sur la programmation énergétique 2025-2035, alors que le projet alimente les tensions politiques et que le Rassemblement national menace de déposer une motion de censure.
François Bayrou souhaite engager un débat sans vote au Parlement sur la programmation énergétique 2025-2035, alors que le projet alimente les tensions politiques et que le Rassemblement national menace de déposer une motion de censure.
The European Court of Auditors warns of the urgency of massive investments in the Union’s ageing power grids, hampered by administrative delays and inadequate planning.
Several lawmakers and former energy executives are demanding a moratorium on PPE3, criticising a plan they view as disconnected from current economic and geopolitical realities.
Several lawmakers and former energy executives are demanding a moratorium on PPE3, criticising a plan they view as disconnected from current economic and geopolitical realities.
The head of Framatome will be heard on 30 April by both chambers to validate his nomination to lead EDF, following the non-renewal of Luc Rémont by the executive.
The head of Framatome will be heard on 30 April by both chambers to validate his nomination to lead EDF, following the non-renewal of Luc Rémont by the executive.
Following a series of major electricity outages on the island of Upolu, the Samoan government has declared a state of emergency to prioritise essential services and mobilise foreign aid.
Following a series of major electricity outages on the island of Upolu, the Samoan government has declared a state of emergency to prioritise essential services and mobilise foreign aid.
The Minister of Industry and Energy expressed openness to a debate and a vote on the 2025–2035 energy strategy, amid criticism from opposition parties over the lack of democratic consultation.
France’s Ministry of Industry and Energy postpones the 2025 energy voucher to November, citing delayed budget approval and announcing revised allocation rules.
France’s Ministry of Industry and Energy postpones the 2025 energy voucher to November, citing delayed budget approval and announcing revised allocation rules.
France’s decarbonisation pace slowed significantly in 2024, according to Citepa, putting its 2030 climate targets at risk.
France’s decarbonisation pace slowed significantly in 2024, according to Citepa, putting its 2030 climate targets at risk.
Luc Rémont was dismissed as head of EDF by the French executive due to disagreements over industrial contract strategy and financing of the EPR2 nuclear programme.
Luc Rémont was dismissed as head of EDF by the French executive due to disagreements over industrial contract strategy and financing of the EPR2 nuclear programme.
Just Stop Oil will end its high-profile actions after one of its core demands was integrated into the British government's energy policy.
The surge in solar production and the slow upgrade of electricity infrastructure are blocking thousands of projects in the Netherlands, affecting energy security and consumer costs.
The surge in solar production and the slow upgrade of electricity infrastructure are blocking thousands of projects in the Netherlands, affecting energy security and consumer costs.
The development of French power grids is facing a structural shortage of skilled labour, despite €200bn in projected investments by 2040.
The development of French power grids is facing a structural shortage of skilled labour, despite €200bn in projected investments by 2040.
Luc Rémont's departure exposes ongoing disagreements between EDF and the French State over electricity pricing for industry and the financing terms of the nuclear programme.
Luc Rémont's departure exposes ongoing disagreements between EDF and the French State over electricity pricing for industry and the financing terms of the nuclear programme.
The European Investment Bank approves a final tranche of PLN1.7bn for Orlen to modernise electricity distribution infrastructure in Poland via its subsidiary Energa Operator.
Luc Rémont is replaced as head of EDF as French manufacturers criticise a pricing strategy seen as incompatible with national industrial competitiveness.
Luc Rémont is replaced as head of EDF as French manufacturers criticise a pricing strategy seen as incompatible with national industrial competitiveness.
Luc Rémont will not be reappointed as Chairman of Électricité de France, two years after his nomination, despite record profits in 2024 and the revival of the nuclear fleet.
Luc Rémont will not be reappointed as Chairman of Électricité de France, two years after his nomination, despite record profits in 2024 and the revival of the nuclear fleet.
The French government has appointed Bernard Fontana to lead EDF, relying on his experience in nuclear energy and energy-intensive industries, amid strategic restructuring and rising tariff pressures.
The French government has appointed Bernard Fontana to lead EDF, relying on his experience in nuclear energy and energy-intensive industries, amid strategic restructuring and rising tariff pressures.
The European Southern Observatory (ESO) warns of the potentially devastating consequences of a power plant project near its telescopes in the Atacama Desert, highlighting irreversible light pollution.
The recent elections in Greenland resulted in a victory for the Demokraatit party, which advocates gradual independence from Denmark and increased support for the exploitation of natural resources, prioritizing the mining and energy sectors. This election comes amid heightened international tensions, notably due to proposals by Donald Trump to annex the territory.
The recent elections in Greenland resulted in a victory for the Demokraatit party, which advocates gradual independence from Denmark and increased support for the exploitation of natural resources, prioritizing the mining and energy sectors. This election comes amid heightened international tensions, notably due to proposals by Donald Trump to annex the territory.
In January 2025, Italy recorded a trade deficit of €264 million, largely attributed to the rising energy costs, according to the National Institute of Statistics (Istat).
In January 2025, Italy recorded a trade deficit of €264 million, largely attributed to the rising energy costs, according to the National Institute of Statistics (Istat).
The National Federation of Mines and Energy of the General Confederation of Labour (FNME-CGT) has elected Fabrice Coudour as secretary general. He succeeds Sébastien Ménesplier and inherits strategic issues, including the opening of hydropower concessions to competition.
The National Federation of Mines and Energy of the General Confederation of Labour (FNME-CGT) has elected Fabrice Coudour as secretary general. He succeeds Sébastien Ménesplier and inherits strategic issues, including the opening of hydropower concessions to competition.

Advertising