Twenty years ago, a new publication was launched to fill a gap in FT Energy’s global map: African Energy created in April 1998 as a monthly report, meant the Financial Times subsidiary could claim to cover the world; previously, its stable of newsletters and online products had largely ignored Africa.
African Energy opened its account with news that financing for the planned $3.5bn Chad-Cameroon pipeline was falling into place (AE 1/2). That controversial project was eventually built, while others have taken longer to leave the drawing board. FT Energy was sold in 2000 to Platts, which then sold African Energy to its editorial team at Cross-border Information in 2003.
It seemed fitting that CbI Meetings’ 11-12 April AIX:Gas event included discussion of plans to relaunch Namibia’s Kudu gas-to-power project, whose financial feasibility featured in April 1998 (AE 1/10); the project dates back to 1974. Other AIX:Gas issues that would be familiar to readers in 1998 included the West African Gas Pipeline’s performance and efforts to monetise Mozambican gas assets, including the then Enron-operated Pande gasfield (AE 4/1).
Many investors have had to take a long-term view in the past 20 years. FT Energy created African Energy to cater for emerging independent power project promoters. Early newsflow included Zimbabwe’s planned Hwange and Gokwe North coal-fired units, whose fortunes seem to be reviving now Robert Mugabe has finally departed. Also forming the new African Energy constituency were international oil companies attracted by new frontiers in the Gulf of Guinea (AE 9/1), while improving economics offered opportunities to monetise flared and non-associated gas.
Many industries have been on a stop-start trajectory ever since. Celebrating the 100th issue in July 2006, African Energy commented that “the inertia in much of the [sub-Saharan] power sector is apparent when one compares the projects roster today with what was generating newsflow eight years ago”. Initiatives such as the restructuring of South Africa’s electricity supply industry – clearly set out in the 1998 Electricity White Paper – had not been implemented coherently then or since.
African Energy began with (and retains) the view that every economy can attain emerging market status, and the continent’s politics and governance have, in many respects, changed for the better. But an Africanist approach to risk remains a necessary analytical tool on a continent where, all too often, personalised politics, graft and other governance headaches halt what should be inevitable progress. Several countries show symptoms of being failed states, including Libya, while many others have suffered from state capture and other ills. In Central Africa, many rulers are the same as when African Energy was created (AE 354/21).
This is a resilient continent. While investors need a healthy appreciation of risk, Africanist perceptions can also cloud understanding of major shifts in the way business is transacted. It is easy to be sceptical about the African Continental Free Trade Agreement, unveiled in March, and its aspirations to establish a single market for goods and services, with free movement of investment and business people. A continent-wide customs union will be very difficult to achieve, but reflects a continent rethinking its global relationships as geopolitics and investment appetite undergo profound shifts (AE 343/20).
From the rise of Nigerian and other indigenous oil companies to the creation of a whole new off-grid energy industry that is intimately tied to advances in which mobile banking has emerged as an African phenomenon of the digital age, new generations of Africans are creating a radically different business environment. Huge challenges remain across the continent – not least population growth, which is outpacing efforts to improve energy access (AE 357/20) – but the application of newer technologies and business models can create the better life so long promised to citizens, as when in May 1998 a British minister using Uganda as a positive example declared it was “now time to put Afro-pessimism behind us” (AE 2/1).
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