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The Secretary General of the African Continental Free Trade Area (AfCFTA), Wamkele Mene, says it is time for Africa to move from being a net importer of refined petroleum products to becoming a net exporter.
He noted that Africa still exports crude crude oil to the outside world which is refined and sold to the continent at a higher cost.
Mr. Mene made the remarks in a keynote address at the Ghana International Petroleum Conference organized by the Ghana Chamber of Bulk Oil Distributors (CBOD). The conference was held under the theme “Positioning the downstream oil industry for AfCFTA”.
He noted that so far 36 out of 55 countries in Africa have submitted their instruments of ratification.
This, he said, “means that these countries have legally accepted obligations to open their markets to lower barriers to trade, lower barriers to investment and adhere to a single set of rules for trade and investment on the African continent.” .
He added: “This is an unprecedented achievement for Africa, particularly given the history of economic growth in Africa over the past 60 years.”
Mr. Mene regrets the continued use of the colonial economic model of trade in Africa, where the continent is still engaged in the export of non-value-added raw materials.
“All of these factors contribute to the very low [rate] of intra-African trade, which is 18%, as we all know, relative to other regions, ”he said. “It is significantly low when compared to intra-European trade, which is 40% or more. In Africa we trade more with the rest of the world than with ourselves. And this is something that AfCFTA seeks to change in the next 15 to 30 years ”.
Mr. Mene emphasized that the oil industry is the core of Africa’s industrialization drive that will contribute to the growth and development of the continent after the implementation of the AfCFTA.
Also at the conference, Vice President Dr. Mahamudu Bawumia said that the success of the AfCFTA depends on collaboration between industry and bureaucrats at the implementation level.
He indicated that as continental multilateral policies are formed, success will always depend on the operational framework and the commitment of all actors.
“AfCFTA is a decision of the African Heads of State Authority, but its success depends on the work of industry and collaboration between industry and bureaucrats at the implementation level,” he said. “It is for this reason that I consider the Ghipcon 2021 theme to be very relevant and important to the success of the AfCFTA in the oil sector.”
According to the vice president, bureaucratic bottlenecks in intra-African trade have differentiated nations in the area of economic cooperation and investment.
Dr. Bawumia noted that AfCFTA, however, provides the industry with a perfect opportunity to contribute to the realization of a first world Africa.
“We negotiate around 85% with the world and only 15% with ourselves. This contrasts sharply with trade between the EU with 67%, Asia with 61% and 47% in the Americas. This situation must change if we are truly committed to the economic transformation of Africa ”, he emphasized.
The vice president noted that Africa has considerable mineral, oil and gas resources that can help accelerate growth if used strategically.
“We are at an economic crossroads, which needs teamwork to achieve the transformation of our economies for the improvement and sustainability of our people,” he said. “With all our endowments of natural and human resources, we risk economic catastrophe with many of our abundant young people unemployed and angry if we do not use them productively to accelerate growth.”
Dr. Bawumia pointed out that Africa is responsible for the annual production of much of the world’s natural resources: 9.6% of the world’s crude oil supplies, 80% platinum, 77% cobalt, 51% manganese, 46% Diamonds, 39% Chromium and 22% Gold.
The challenge, he said, is to build factories and refineries to add value to the continent’s natural resources.
He called on African nations to work together to develop regional assets, including refineries and logistics assets, to achieve the economies of scale necessary for commercial viability. “This boosts productivity and puts our capable young people to work, which in turn preserves and enriches their dignity,” said the vice president.
About GhIPCON
The Ghana International Petroleum Conference (GhIPCON) is the premier conference on the petroleum sector in Ghana, where policy makers, industry players and experts converge to deliberate on policy and operational issues as well as to share ideas and experiences.
GhIPCON is designed to actively highlight the oil industry’s perspective and guidance on government policy and regulatory issues, as well as best practices for the advancement of the industry, not only in Ghana but throughout the sub-region and beyond.
