Oluwakemi Makanju’s Post

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Sustainable Energy Market Development Specialist

A thought has occupied my mind for a little while now. It’s beneficial to embrace new technologies in closing gaps in energy access but what do we do with our oil in Africa? How does this continue to serve as a revenue generation as we grapple with the issue of climate change because participating in responsible climate actions is not an obligation we should ignore. Though not exhaustive, I did a little research and will like to share a few things we can do: 1. Maximize value capture: African governments should seek to capture the full value of resource rents from oil and gas extraction. This can be achieved by implementing clear, consistent, and stable fiscal policies that attract investment and are robust to changing conditions. Currently, the value of resource rents in Africa is estimated to be 2.6 times the level of government revenues captured, indicating significant untapped potential for economic growth. By capturing these rents, we can generate additional revenue to invest in clean energy infrastructure and initiatives. 2. Promote regional integration: The implementation of a continental free trade area in Africa can unlock the potential for mineral value addition and beneficiation. By promoting regional integration, we can increase sectoral productivity and the overall value of exports. This can be achieved by developing regional value chains that encompass the manufacturing of intermediate inputs, the extraction of minerals, and the processing phase. Regional integration can also facilitate the sharing of resources and expertise, leading to more efficient and sustainable use of oil resources. 3. Improve energy access: We face a significant challenge in meeting our universal, high-quality energy access goals. By tapping into our energy resources, including oil, we can accelerate progress towards energy access. This can be achieved by developing diverse energy sources, including renewable energy, and leveraging investments in regional infrastructure. The scale-up of green energy investments can not only improve energy access but also alleviate rural poverty and promote productivity gains. 4. Utilize natural gas as a transition fuel: We can prioritize inward investments in newly discovered and underdeveloped natural gas reserves. Exploiting natural gas reserves can mobilize export revenues and spur domestic energy production and access. We should support both exports and domestic consumption. Natural gas can be deployed alongside renewable energy technologies as a transition fuel, contributing to climate change goals.   By implementing these strategies, we can optimize our oil resources for economic prosperity while simultaneously working towards our climate change goals and clean energy adoption. These approaches can help us balance our economic development with sustainable and environmentally friendly practices. #climatechange #cleanenergytransition #energyaccess #livableplanet #economicprosperity #africa

Femi Martins Areola

Project Finance/ Financial Advisory

11mo

These are well thought out and forward thinking. I’d love to know if there are specific fiscal policies or models you believe African governments should adopt to maximize value capture.

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