A robust petrochemicals industry can diversify African economies. (Image source: Adobe Stock)
A thriving local refining sector requires a skilled workforce, which translates into job creation across various levels, from engineers and technicians to construction workers and administrative staff
The development of local refineries can also stimulate growth in related industries, such as transportation, logistics and service sectors, further amplifying employment opportunities.
Building a robust petrochemicals industry enables countries to diversify their economies. Petrochemicals serve as essential inputs for numerous sectors, including agriculture (fertilisers), manufacturing (plastics), and pharmaceuticals. By investing in this industry, countries can reduce their reliance on a single commodity – oil – and create a more resilient economic structure.
By minimising crude oil exports and focusing on value addition, nations can create jobs and stimulate economic growth. This comprehensive strategy not only enhances national wealth but also contributes to the overall well-being of African populations, aligning economic success with social progress.
The concept of ‘profit versus purpose’ serves as a guiding principle in the ongoing debate about energy policy. This framework integrates economic objectives with social and environmental goals, demonstrating that financial success and societal benefit are not mutually exclusive. By prioritising investments that address energy poverty and promote social equity, businesses can contribute to the continent's sustainable development while remaining economically viable.
Investing in energy solutions in underserved regions presents unique challenges, including high initial costs and limited access to traditional financing. However, these challenges also create opportunities for innovative financing mechanisms. Multilateral finance institutions and climate finance initiatives can play the central role in mobilising resources and sharing financial burdens.
Shared value mechanisms allow companies to align their business operations with social impact goals, unlocking new market opportunities while addressing critical issues like energy access. Investing in off-grid renewable energy solutions, for instance, can enable companies to tackle energy poverty while expanding their market reach.
The pathway to unlocking Africa’s oil and gas potential lies in balancing effective governance with the principles of profit for purpose. African governments must create policies that not only attract sustainable investment but also prioritise the welfare of their citizens.
By implementing transparent frameworks, favourable fiscal terms, and innovative financing models, African countries can harness their natural resources for the greater good. This collective responsibility to promote sustainable development will ensure that the benefits of oil and gas investments extend beyond profit, enriching communities and driving long-term economic growth across the continent.
This is the last of a two-part article written by Taona Kokera, director - head of infrastructure finance advisory at Forvis Mazars in South Africa
