With the population explosion and rising energy crises, new worries about public health and environmental disaster are emerging in Nigeria and other African nations.
Experts from across the continent and other parts of the world gathered yesterday in Cape Town, South Africa, and insisted that unless something is urgently done to revive refineries to refine cleaner petroleum products, address the severe Liquefied Petroleum Gas (LPG) shortage, and address distribution and storage infrastructure, the continent would only be living on borrowed time.
The stakeholders, who gathered at a yearly conference organised by the African Refiners and Distributors Association (ARDA), were concerned about the continent’s paralysed refineries, ageing storage and distribution infrastructure, poor port architecture, petrol to power challenges, crude oil theft, rising subsidy on petroleum products, and other issues a year after Russia’s invasion of Ukraine with its multinational impacts, particularly high product prices and an increasing debt burden.
Already, four million premature deaths are being recorded yearly from the 700 million people that lack clean cooking gas. Even as stakeholders expressed anxiety that Africa’s population is surging for a global high, the continent remains the only region with growing populace, but without energy access.
Recall that while Africa’s healthcare sector is expected to hit about $259 billion in the next seven years, most Africans finance their medicare out-of-pocket, as budgetary allocation remains dismal amid infrastructure deficit.
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By May this year, Nigeria’s debt is projected to hit N77 trillion ($171.2 billion). Reportedly, public debt has doubled in Africa since 2010, standing at 65 per cent of Gross Domestic Product (GDP) in 2022. It was only 32.7 per cent in 2010.
This is coming at a time when the cost of borrowing is rapidly increasing, as rising interest foists more complications with most African countries unable to issue Eurobond, while refinancing costs double with an average increase of 600 basis points, and even up to 1800 basis points in others.
The Overseas Development Institute has also noted that $140 billion of Eurobonds, and an average maturity of 10 years, meant that refinancing cost of 600 bases or six per cent would see interest costs amount to $8.4 billion yearly or $84 billion in total over the life of the bonds. This represents 0.3 per cent of Africa’s yearly GDP, and given that Eurobonds average 30 per cent of total debt, the overall cost of increased debt servicing would be a painful one per cent of GDP each year, the think tank submitted.
The experts are calling for a rethink across the continent that would make the Africa Finance Corporation and Africa Energy Bank to provide necessary funding, as they insisted that conversation on energy transition and sustainability are skewed, and not global, as being pushed.
Story adapted from The Guardian
