29 September 2015, Kampala – The low price of oil has dashed initial hopes for oil and gas investment in Africa, but governments have the opportunity to turn things around.
The discovery of oil off the coast of Ghana in 2007 – and subsequent hydrocarbon finds in Uganda, Kenya, Tanzania and Mozambique – sparked an exuberant international response, with oil and gas investors initially flocking to what many saw as a new frontier for the industry.
The excitement was understandable as the oil and gas finds in Mozambique had the potential to increase the country’s GDP five-fold by 2040. Ghana’s economy, too, was being transformed. Prices were booming and the ‘Africa Rising’ narrative was taking hold with rising consumption and improved political stability changing investor perceptions.
Eight years on, with oil price halved to below $50 a barrel, the enthusiasm looks a little optimistic.
While there have been significant successes in oil and gas exploration, the overall pace of investment still lags behind.
- The Monitor