Knowledge transfer contributes to long-term growth
NOT only does the African continent need ongoing foreign investment, it also needs the technical knowledge and expertise that the international business community can provide.
Knowledge transfer empowers local companies — including oil and gas industry suppliers, service companies, and indigenous oil and gas companies — to cultivate the skills and technologies necessary to thrive in a continuously evolving industry.
What’s more, knowledge sharing plays a valuable role in eliminating the need for foreign assistance.
We realise that, with the COVID-19 pandemic wreaking havoc on African economies, there has been more talk of aid packages to meet basic needs.
While donations and aid are appreciated and valuable during crises like the one we are experiencing now, they can do nothing, but serve as a temporary emergency safety net.
Rather than doing things “to help Africans”, more foreign governments and companies should partner with African countries to make sustainable changes for the better.
Equipping African countries to thrive is a highly effective way to do that. Knowledge transfer contributes to stronger economies, increased entrepreneurial activity, and job creation.
There is no question that foreign investments are beneficial, and necessary, for African countries.
But when it comes to attracting investments from international oil companies, we are not where we need to be yet.
So how do we encourage more investment, both now and after the pandemic? African
countries must work to create an enabling environment.
To make doing business easy with their countries, government leaders should be looking at their tax frameworks so investors can be sure their hard work will yield fair dividends.
They should be looking for ways to eliminate red tape, implement better fiscal regimes, and ensure transparency.
And while countries should have local content policies in place to benefit individuals in business, they should make an effort to create policies that are fair, not burdensome to international oil companies.
What’s more, governments must enact legislation that ensures the sanctity of contracts so that investors are assured that their agreements will be respected.
Along with these efforts, oil and gas project developers and owners have their own role to play in drawing investors.
It has become increasingly important for oil and gas projects to adopt strong environmental, social and governance standards.
While these will vary by project, examples could include carbon emission reduction and operational energy efficiency in the area of environment.
Social standards could include health and safety measures and relationships with local suppliers and service companies.
Examples of governance policies could include leadership diversity and reporting transparency.
Investors consider environmental, social and governance standards, and project developers must do the same.
Foreign investment opportunities will play an important role in supporting economic growth and eliminating energy poverty in Africa for years to come.
That is why the African Energy Chamber will continue to help African countries make themselves more attractive to investors and to make potential investors aware of the many opportunities Africa offers them.
It is worth a different kind of investment on our parts as Africans, investment in time and effort.
The end result? More promising developments like the ones emerging in Senegal, Rwanda, and Uganda. Economically vibrant African countries. Thriving African households and entrepreneurs, growth and hope.