Assistant Secretary Fannon: Thank you Minister Cisse, thank you Fatih [Birol], for bringing us all together today. This is an absolutely critical panel. Thank you for your leadership.
I had the great pleasure of visiting several Southern African nations last fall and appreciated the warm welcome I received. I’m very pleased to see many of the Ministers that I visited with on that trip participating today.
In remarks just a few days ago Secretary of State Pompeo reiterated that the United States remains Africa’s most committed partner in promoting transparency and combatting the scourge of infectious diseases including COVID-19. As you know and was discussed, the COVID pandemic has led to the sharpest drop in crude oil and gas demand in history, which was followed by oil price instability, creating extraordinary volatility in the oil market. American diplomacy and partnership with IEA and the G-20 helped work to stabilize world oil markets. Nevertheless, the crisis has also significantly altered the investor appetite for new projects and has put several projects on hold.
In many cases oil and gas producing African nations have been forced to put austerity measures in place. With lower state budgets many energy projects across the continent are now under pressure or at risk.
Many speakers today called for the private sector, the critical need to attract that investment and also I heard one speaker refer to energy for development, not just for revenue. I think those are critical touchstones. With robust good governance systems in place nations competing for extremely limited investment dollars could lose out to other regions with more attractive above-ground risk profiles. But worse, Africa will attract predatory investors who claim to offer much better but deliver a legacy of indebtedness.
I would therefore like to submit to you that good governance in the energy sector is actually more important now than ever before. Governments must ensure they have open business climates and transparent operating conditions. That’s the only way to attract world class investments.
And there are some very positive developments in Africa and some positive trends among some countries that are making a real difference. I’d like to just speak to three of them and then move on.
First, Angola, which continues to make real progress and real reform in its mining and oil sectors. And Uganda has passed petroleum sector reform legislation including fiscal reform and is now moving forward to build a refinery in East Africa. And recently I spoke with the Nigerian Minister of State for Petroleum and his country is making laudable moves in their petroleum industry bill.
I’d also like to underscore that many speakers raised Africa’s clean energy potential both in terms of the adoption and integration of clean energy sources, but also I’d like to underscore the minerals that allow for the clean energy transformation to occur, many of which are there in Africa.
I’d just like to note that the U.S. has joined with Botswana, Australia, Canada and Peru to form a new organization called the Energy Resources Governance Initiative to promote and provide, not just promote good governance but also to provide a tool kit, ERGI.tools, as well as capacity building and development finance to implement some of these measures, to catalyze the private sector investment we also know is critically important.
We think that Africa’s contribution really is an all of the above contribution. Not just to the benefit of the people of the continent, but also for the planet.