UNCTAD´s 9th African Oil & Gas Trade and Finance Conference - the continent´s largest annual energy event - begins today in Maputo, Mozambique, giving government officials and industry experts the chance to discuss how to turn the benefits of the continent´s vast wealth in energy resources into broad economic growth and improved standards of living for African populations. Oil and gas are by far Africa´s largest export - four times as important as all non-fuel commodity exports combined - and are expanding in value: In 2004, Africa earned almost $30 billion more on oil exports than in 2003. But fuels also account for some 10% of total imports to the continent, and for many countries specializing in the export of agricultural products, fuel import costs absorb more than a third of export revenues. Good management of natural resources and of export and import flows are thus vital for economic progress; to date, despite the widespread presence of oil and gas in Africa, there is little evidence that oil exports have improved the lives of average Africans.
Africa´s increased oil export revenues point to a number of risks and challenges, UNCTAD Officer-in-Charge Carlos Fortin says in his message to the conference. "First, a large part of the extra revenue immediately leaves the continent, as foreign companies capture much of the rent. Second, while a number of African countries have benefited from high oil prices, the majority are oil importers and are struggling under the weight of increased import bills. Third, even in the countries that saw increased oil revenue, benefits are unequally distributed. Fourth, most sub-Saharan African oil-producing countries have not managed to build links between the oil sector and the rest of their economies, losing much of the value-added of oil production to foreign service providers and forgoing the possible positive effects of oil production for industrial development. This is reflected in the high proportion of oil and natural gas in Africa´s exports: energy is being exported in raw form rather than used for local growth and the export of value-added products. And finally, the effects of high oil prices for oil-exporting countries and the effects on oil-importing countries are not symmetrical: what one group loses is not what the other gains".
African governments thus face the challenge of designing strategies and policies in the oil sector that will spread the benefits more broadly and contribute in an optimal way to national economic growth. Similarly, effective management of the continent´s oil and gas resources could go a long way towards achieving the United Nations Millennium Development Goals of reducing poverty and improving health and education levels worldwide.
The conference is being organized jointly by UNCTAD, ITE Group Plc, the Ministry of Energy and Mines of Mozambique, the Mozambican National Hydrocarbons Corporation (ENH, Empresa Nacional de Hidrocarbonetos de Moçambique) and the national oil company, Petroleos de Moçambique (Petromoc).
In addition to the main conference programme [pdf], which focuses on links between energy and finance issues, there will be concurrent technical and corporate sessions.
The conference will be opened by Mozambican President Armando Emílio Guebuza. Energy ministers will participate from Equatorial Guinea, Kenya, Mali, Mozambique, Namibia, São Tome and Principe, Sierra Leone and Zimbabwe. Numerous heads of African national oil companies and refineries will also attend, as will bankers and representatives of national and international oil and natural gas industries. In total, some 450 participants from 40-odd countries are expected.
At the 3 June closing ceremony, the Prime Minister of Mozambique, Luisa Diogo, will hand over the torch to the Secretary-General of the Ministry of Energy and Mining of Algeria, host country of the 2006 conference.
Previous conferences have taken place in Marrakech, Morocco (2004); Luanda, Angola (2003); Yaoundé, Cameroon (2002); Accra, Ghana (2000); Windhoek, Namibia (1999); Abidjan, Côte d´Ivoire (1998); and Harare, Zimbabwe (1997 and 1996). Preparations for the first meeting began in 1994 as part of UNCTAD´s programme on oil marketing, risk management and finance in Africa. The conference was a response to the need expressed by African countries for a forum in which public and private entities could discuss the management of oil exports and imports, developments in the oil and finance markets, and emerging opportunities in deregulated oil markets. The first conference was made possible by support from the Dutch Ministry of Cooperation. All subsequent events have been funded by African and international banks, oil companies and energy sector service providers. Some 28 different companies, including several African firms, currently sponsor the conference.
