10 How AfCFTA will benefit Africa’s Oil, Gas Industry

0

CBN

 

What impact will the AfCFTA have on the oil and gas industry? - Baobab  Africa Online

 

In order to attain regional socio-economic development, through AFCTA, African governments need to have a strong commitment to tackle corruption and make firm commitments to developing their own countries to ensure the booming trade and supply of oil and gas.

This was the opinion of Shantel Mufandaidza, Associate Attorney, Centurion Law Group in an opinion article on how Africa can benefit from the African Continental Free Trade Area(AfCFTA)

According to her, Africa’s oil and gas resources can help accelerate growth on the continent if used strategically.

She said that trade barriers such as high import tariffs have left many African countries vulnerable to the international market, which resells our resources at higher prices, stating that AfCFTA will potentially curb this, as oil and gas producing countries will benefit from global markets and the domestic market.

“Focusing more on growing intra-continental oil and gas trade will give countries autonomy to govern their international trade agreements, which have often left African countries on the losing end,’’

 

 

In her view, AfCFTA will make room for the generation of Gross Domestic Products that can positively impact African economies’, create employment, and impact infrastructural development.

She disclosed that the continent has countries rich in oil and gas and the capacity to have a firm footing on the sector with the assistance of the AfCFTA and more favorable trading terms intra-regionally.

Nigeria she stated has already set its intentions on becoming the largest oil refining hub on the continent, while Angola hopes to export gas to its neighboring countries, adding that AfCFTA will facilitate trade and the evolution of existing commerce lines within Africa and not necessarily radically revolutionise the space.

But in sectors like oil and gas, where corruption is rampant,  she said, this evolution will be crucially determined by transformations of existing governance structures and infrastructure. For as long as corruption is a continuing practice, the gains from domestically trading our natural resources might not be as significant as they could be.

‘’ For example, Angola is the largest exporter of gas on the continent and stands to benefit much from the domestic supply of gas to neighboring countries; however, the rampant corruption in Angola has hurt the necessary infrastructure necessary for the country to supply its neighbors with gas.

 

The only way the AfCFTA would positively impact the oil and gas industry is by promoting significant investments in roads, ports, and other physical infrastructure. African governments must be serious about financing the regional infrastructure and investment needed to make AfCFTA a game-changer, she stated.

 

Africa, she maintained, suffers from an energy deficit which is unfortunate for a continent that is so rich in resources, stressing that the continent’s problem lies in the inability to utilise these resources for domestic benefit, and the hope is that the AfCFTA helps achieve this goal.

 

She said, in order to attain such regional socio-economic development, governments need to have a strong commitment to tackle corruption and make firm commitments to developing their own countries to ensure the booming trade and supply of oil and gas.

 

She added that if the continent pivots from an extractive exportation structure with oil and gas, it can secure more sustainable and inclusive trade that is not dependent on the fluctuation of commodity prices on the international market.

 

She disclosed that the continent has countries rich in oil and gas and the capacity to have a firm footing on the sector with the assistance of the AfCFTA and more favorable trading terms intra-regionally.

Leave a Reply

Your email address will not be published. Required fields are marked *