About Summit – 2021

A. About the Africa Oil Governance Summit (AOGS).

The Africa Oil Governance Summit (AOGS) is the flagship programme of the Africa Centre for Energy Policy (ACEP). Instituted in 2015, the AOGS is convened annually in Accra, the capital of Ghana. The main goal of the Summit is to shed light and address pertinent governance and development issues pertaining to the management and use of oil and gas resources across the African continent. The AOGS thus creates an avenue for, and brings together, stakeholders in and outside the oil and gas industry across Africa and beyond to deliberate on efficient and effective approaches to engender sustainable and inclusive development through exploitation of Africa’s oil and gas resources.

Speakers, panelists, and participants are drawn from the public sector (government/state institutions), the private sector (local and foreign companies/businesses), academia, Civil Society Organizations (CSOs), sub-regional, regional, and international institutions, international development agencies/partners, and the local and international media. The Summit has, since 2015, recorded about 1,300 direct participants with the highest participation of 384 in 2019. This excludes virtual participants who are engaged through both the electronic and social media. Like most events in 2020, the sixth edition of the Summit was not exempted from the impact of Covid-19. For the first time in the history of the AOGS, the 2020 edition was held virtually on account of the pandemic and the global restrictions on travels and mass gatherings. Notwithstanding, the 2020 AOGS recorded an average of 100 participants per panel session excluding participants on social media platforms.

Topical issues discussed at previous Summits centered on the following themes:

• “Africa rising as oil curse beckons for most countries – Is good governance the missing link between oil wealth and development?” (2015).
• “Rising through the rubbles of oil price shocks; strategies for inclusive growth and
  sustainable development” (2016).
• “Maximizing the benefits of petroleum resources in Africa; the role of open
  contracting for efficient negotiations, revenue capture and effective revenue
  utilization” (2017).
• “Harnessing the potential of local content for economic growth and inclusive
  development” (2018).
• “Optimizing oil and gas resources in Africa: the role of new discoveries in the
  Continent’s development agenda” (2019).
• “The implications of climate change action on oil governance in Africa” (2020).

This year, the Summit will bring together experts across the globe to deliberate on the effective strategies African governments can adopt to leverage on the opportunities presented for optimal development of upstream petroleum with the operationalization of the Africa Continental Free Trade Area (AfCFTA). The focus of the dialogue will also be extended to explore strategies to scale up Africa’s efforts to benefit from the energy transition through AfCFTA. Like the previous Summits, ACEP will be partnering with key institutions to ensure an effective organization and a successful dialogue. 

B. Objectives of the Summit

The summit seeks to provide a platform to discuss policy actions and critical strategies required to maximize the opportunities AfCFTA is expected to present to the oil and gas industry, and encourage actions from African governments and key actors to optimize the gains from oil and gas resources across the region.

Specifically, the 2021 Africa Oil Governance Summit seeks to achieve the following objectives:

1. Provide the platform for a regional conversation on the opportunities and the challenges AfCFTA presents to Africa’s oil and gas industry.
2. Discuss the policy and institutional reforms required for the industry to fully take advantage of the opportunities expected from AfCFTA.
3. Discuss how AfCFTA can contribute to Africa’s just transition to cleaner energy.
4. Explore the roles and strategic approaches that state and regional institutions and CSOs could adopt to sustain and maximize the potential gains presented by AfCFTA.

C. Key Output

ACEP will collaborate with experts to, based on key points from the Summit, develop a policy document that outlines critical pathways for governments’ policy actions and private sector strategies to harness the opportunities AfCFTA is expected to present for Africa’s oil and gas sector.

D. Expected Outcome

Africa governments, businesses and accountability institutions will adopt the policy propositions and leverage on AfCFTA to optimally develop the energy sector across the continent.

 E. Format of the Summit

The Summit is structured into panel discussions and presentation of a technical paper. Panel discussants and moderators are carefully selected from different backgrounds to reflect a balance between government, industry, academia, civil society, international community, and gender.

 F. Who will participate in the AOGS 2021

A minimum of 200 participants are expected to attend the 2021 Summit each day. Participants will be drawn from the following groups:

• Government Ministries
• Oil and Gas Industry experts
• International Oil and Gas Companies
• National Oil/Gas Companies
• Government Ministries and Agencies
• Regional and International Economic Institutions
• Private sector players within and outside the oil and gas industry
• Trade experts
• Management Consulting and Advisory Companies
• Industry Regulators
• Financial Institutions
• Accountability Institutions
• Heads of Missions of Embassies in Ghana
• Civil Society Organizations
• Traditional Authorities
• Development Partners
• International Think Tanks/NGOs
• Academia
• Media

G. Exposition on the Theme For the 2021 Africa Oil Governance Summit: The Africa Continental Free Trade Area and Oil and Gas Industry: Opportunities, Threats and the Way Forward.

Intra-regional trade in Africa is estimated at 17%, far below trade in other regions such as Europe (69%), Asia (59%) and North America (31%). These statistics make the region vulnerable to global trade and value chain shocks as was experienced in 2020 with the outbreak of the Covid-19 pandemic. The pandemic exposed Africa’s vulnerability to the global trade network after restrictions in imports and exports between the continent and its trade partners affected trade and other economic activities in Africa, despite the relatively low Covid-19 cases recorded on the continent. Intra-Africa trade is challenged with several tariffs and non-tariff barriers such as inefficient cross border and intra-country transport systems, poor trade logistics and high security risks.

To promote increased intra-regional trade and mitigate the vulnerabilities the existing trade architecture exposes African countries to, the Africa Continental Free Trade Area (AfCFTA), came into effect on 1^st January 2021, effectively creating the world’s largest free trade area. This initiative, signed by 54 African states and ratified by 44 states seeks to defragment Africa’s intra-regional markets by removing about 90% of both tariff and non-tariff trade barriers, investing in cross-border infrastructure to ensure free movement of people, goods and capital, and streamline trade, investment and monetary policies across the continent. The agreement connects 1.3 billion people on the continent with a combined GDP of about $3.4 trillion and consumer spending of more than US$4 trillion. The World Bank estimates that a successfully implemented AfCFTA has the potential of lifting about 30 million people out of extreme poverty and an additional 68 million people from moderate poverty by 2035. Moreover, the agreement has the potential of improving real income gains on the continent by 7% or US$450 billion in monetary terms as well as increasing Africa’s exports by US$560 billion, mostly in manufacturing. In fact, a successfully implemented AfCFTA is expected to create a new regional value chain on the continent whilst strengthening existing ones and help create new export and investment opportunities resilient to the uncertainties in the global value chain. AfCFTA therefore remains a game changer in turning the fortunes of the continent around as its economic and social benefits cut across multiple sectors such as agriculture, manufacturing, trade, finance, education, health, transportation, energy among others.

At the heart of AfCFTA is Africa’s industrialization agenda and fossil fuels remain significant for industrializing Africa. The continent is endowed with considerable extractive resources including an estimated 125 billion bbl oil reserves and an estimated 487.7 tcf gas reserves.  For oil and gas producing countries on the continent, the commodities remain important drivers to their economies in terms of exports and revenue. The oil and gas exports from West and North Africa, the continent’s oil and gas powerhouses, accounts for more than 10% of global oil and gas exports. For most African countries, fossil fuels, particularly gas, remain very important for industrialization and for gas-to-power generation to alleviate the significant energy poverty that has plagued the continent. The IEA predicts that fossil fuel will constitute about 60% of Africa’s fuel mix in the next two decades. However, investments for fossil fuel exploration and development have become very competitive as global climate concerns have forced actions from countries and businesses to transition to low carbon energy. In its Net Zero by 2050 report which details a roadmap towards global energy transition, the IEA calls for among other things an immediate halt in new fossil fuel supply projects in a bid for the world to reach net zero by 2050. A single market as promised by the AfCFTA is expected to expand the African market for oil and gas and provide a significant incentive to attract the needed investment to develop the continent’s oil and gas reserves for industrialization and power generation.

AfCFTA is also expected to provide greater opportunities for the downstream petroleum sector, especially the refinery and petrochemicals subsector. Due to inefficiencies and low throughput of existing refineries, most African countries import significant amounts of refined petroleum products for domestic consumption. Essentially, the continent is a net importer of petroleum products and is exposed to trade shocks. The continent’s refinery capacity can meet about 90% of demand for refined petroleum products but low throughput rates keeps production level to about 55% of demand. There is a trend of investment to retool refineries in the region that can only be bolstered by the prospects of a single market for refined petroleum products. For instance, Cote D’Ivoire Société Ivoirienne de Raffinage (SIR) has secured a US$657 million debt financing deal from Africa Finance Corporation to revamp its refinery. Nigeria National Petroleum Corporation (NNPC) is also seeking investment to retool its four non-performing refineries, two of which have received financing support from the World Bank. It is expected that AfCFTA would provide the incentive for increased investment in refineries to take advantage of the intra-regional trade opportunities it presents.

Beyond these, the fuel quality specifications and regulations of petroleum products vary widely across the continent. This, coupled with bureaucratic cross border trade and investment processes discourage intra-regional trade in petroleum products. Would a successfully implemented AfCFTA address these challenges as trade policies become harmonized across the continent?   

H. Panel Sessions

Panel One: AfCFTA and Oil and Gas Infrastructure Development

The successful implementation of AfCFTA and its attendant opportunities for different sectors including the oil and gas sector remains reliant on a robust and strategic infrastructure across the continent. However, Africa has a huge infrastructure deficit. Financing for energy infrastructure for example remains inadequate and requires investments of US$8 billion per annum which translates into 0.04 percent of the continent’s GDP. As a result, access to energy remains low across the sub-region despite the potential capacity to meet the energy demand of the continent. The IEA estimates that about 600 million Africans do not have access to electricity and about 900 million people have no access to clean cooking energy.

The gas industry alone, which contributes about 25% of Africa’s power generation source requires estimated investments of US$721 billion between 2019 and 2035. With the increasing prominence of gas-to-power generation on the continent, gas and power infrastructure investments such as cross-border gas pipelines and regional power pool transmission infrastructure would be particularly critical to meet the continent’s energy needs. This is equally essential to developing the entire value chain and value addition to hydrocarbon resources, which are a necessary recipe to propel intra-African trade and harness the potential gains from AfCFTA. Closing Africa’s infrastructure gap requires between US$130 billion to US$170 billion per annum.

This session seeks to explore how African countries can take advantage of the AfCFTA to develop the needed infrastructure to optimize its oil and gas resources to accelerate access to energy and industrialization. The session would provide answers to the following questions:

1. How can AfCFTA drive critical infrastructure development to harness oil and gas resources to accelerate access to energy and industrialization?
2. What policy reforms are required to push cross-border infrastructure developments?
3. What lessons can be learnt from existing cross-border energy infrastructure in developing policy reforms and financing for projects AfCFTA could facilitate?
4. Between the government and the private sector; who should lead infrastructure development in the AfCFTA era?

Panel Two: AfCFTA and local content in the oil and gas sector

African businesses in the oil and gas sector, particularly local service and supply companies face stiff competition from established foreign companies in the provision of goods and services. Whilst their foreign competitors have access to capital, the technical competence and experience to expand into new markets, local companies face significant challenges in accessing low-interest capital to invest in the required technology and capacity to effectively participate in the oil and gas sector. To address these challenges, governments in African oil producing countries have introduced local content policies to protect and provide opportunities for local businesses in the sector. In some cases, certain services are reserved for local businesses whilst others are required to form joint ventures with foreign companies for knowledge and technology transfer. This runs counter to the logic of the AfCFTA, which seeks to promote industrialization by creating an integrated and more competitive African market. There is enough evidence to suggest that when regional policies conflict with national policies, countries are more likely to prioritize their national objectives. Nigeria’s recent closure of its border with neighboring Benin provides a good example. Although AfCFTA promises opportunities for service and supply chain businesses in the sector, its success will depend on the ability of African countries to harmonize local laws and policies with the regional agreement.

This session would deliberate on the strategic pathways to create a harmonized business climate that accounts for local content objectives across the continent. Specifically, the session would provide responses to the following:

1. Does AfCFTA address the challenge of local content promotion (oil and gas sector) in the individual countries within the context of regional trade?
2. What lessons can be learnt from the implementation of local content policies across the region?
3. What strategies can be adopted by member countries to build the capacity of local businesses?

Panel Three: AfCFTA and the Energy Transition 

Energy production from non-renewable sources contributes about 60% of global greenhouse gas emissions. The devastating impact of this on the environment has caused a global concern for climate change, which is forcing businesses and governments to take climate action and transition to clean energy. As a result, there have been intensified efforts towards green energy by developing appropriate energy transition policies, investing in Research and Development (R&D) for renewable energy development, and setting aside dedicated funding for renewable energy projects. Despite these global efforts, African countries are far behind their regional peers in transitioning to greener energy sources. Africa is endowed with renewable energy sources such as solar, geothermal, and wind that needs to be harnessed to provide electricity for the millions of Africans that still do not have access to electricity. This will require significant investments by African countries to accelerate their transition to green energy. According to IRENA the continent needs an annual investment of about US$70 billion in renewable energy projects to achieve clean energy transformation by 2030.

Beyond meeting climate action goals, energy transition presents opportunities for African countries to invest in the economics of the transition i.e., research and development and manufacturing of renewable energy technologies. These opportunities arise from the significant reserves of new minerals on the continent that are relevant to the transition such as lithium, silica sands among others. This will ensure that African countries do not miss out on the economic benefits of the transition while they face the risks of stranded fossil assets. It is expected that AfCFTA would offer member States opportunities to pool financial, human, and infrastructural resources together to develop the renewable energy sector and harness the potential gains it presents.

This session will deliberate on the strategic pathways to create linkages between the oil and gas industry and renewable energy development to increase Africa’s active participation in energy transition. The specific questions to be addressed are:

1. What role could AfCFTA play in preparing Africa’s oil and gas sector for an energy transitioning world?
2. How can Africa take advantage of AfCFTA to attract funds and investors in a changing energy investment climate?
3. How can Africa participate in the economics of the energy transition and what comparative advantage does Africa have to aid in its transition?
4. What are the negative effects of the transition that ought to be managed (for example, waste management)?

Panel Four: Africa Continental Free Trade Area: The Role of Accountability Actors

Prior to AfCFTA, African countries have pursued economic integration of African economies to promote intra-Africa trade and achieve economic transformation through Regional Economic Communities (RECs). These integration efforts have however yielded modest results over the years. Africa’s export base remains less diversified and over reliant on commodity exports, industrialization has stagnated, and intra-African trade continues to lag its regional peers. The slow progress made by the RECs has been attributed to several factors mainly, ineffective institutions and their lack of supranatural powers, policies informed by national interests, half-hearted commitments to free movements of persons and goods across borders with slow progress in the removal of Non-tariff barriers (NTBS) and underdeveloped infrastructure. Despite these nagging challenges, the existing RECs form the building blocks of the promise of a single African market under AfCFTA. It is therefore critical for African governments and key stakeholders to take strategic measures and avert a similar fate for the AfCFTA. Thus, harnessing the continent’s trade and investment opportunities to be presented by AfCFTA requires effective civic institutions at both national and regional levels to monitor the implementation and contextualization of the tenets of the agreement.

Civil society organizations (CSOs), the media, citizens and other accountability actors can play a crucial role to monitor and promote efficient institutions to ensure adherence to the “Boosting Intra-African Trade (BIAT)” and other key AU initiatives fundamental to the effective operationalization of the AfCFTA. This is deeply recognized by the African Union Commission and other relevant stakeholders as a key for efficient operationalization of the Continental Agreement. The African Union Commission and the UN Economic Commission for Africa organized a CSO forum in 2019 in Niamey to enhance stakeholder consultation on the implementation and participation opportunities for CSOs in the work programmes of AfCFTA. At the forum, CSOs were called to play complementary political roles to advance the ideals and support the work at national and regional levels.

The session will seek to explore the role of CSOs and institutions at the national and regional levels and the strategic approaches they can adopt to play a complementary role and advance the ideals of AfCFTA to achieve a socially inclusive outcome.

1. What specific roles can CSOs, and other non-state actors play for effective implementation of an AfCFTA that equitably benefits both small and large economies?
2. How can citizens be empowered to effectively participate in the opportunities AfCFTA is expected to create within the petroleum value chain?
3. What capacity is required by civic actors (CSOs, academia, etc) to effectively monitor the implementation of the AfCFTA?