With foreign investment and partnerships playing a critical role in Africa's economic growth and recovery from COVID-19, African producers must take a leading role toward increasing government transparency, protecting contract sanctity and implementing competitive fiscal regimes.
Following multiple petroleum discoveries in Uganda's Albertine Graben, foreign investments into the country have reached nearly $20 billion. The resulting projects include a refinery being built by the Uganda National Oil Company in joint partnership with four Italian and Mauritian companies. Through another joint venture, in this case with the Tanzania Petroleum Development Corp. and Total, Uganda's National Oil Company is building a 1,445-km pipeline to the Tanzanian seaport that represents numerous opportunities for new jobs and economic growth.
In Senegal, H.E. President Macky Sall announced in late September that his country is on target to see double-digit economic growth, around 13.7% by 2023, thanks to new oil and gas field developments. Furthermore, Senegal has been reaping the rewards of a long-standing partnership with Germany, which has resulted in more than one billion Euros in funding, including significant support for small-scale power plants and renewable energy projects.
The news has been promising in Rwanda as well, where government efforts to draw foreign investment are yielding fruit, including more and more investments by Turkish businesses. Turkey's biggest investment in Rwanda, by Hakan Mining and Electricity Generation Inc., involves the construction of an 80 MW power plant in the southern part of the country.
These encouraging events have a running theme: through foreign investments and partnerships, these African countries are strategically harnessing their oil and gas resources to make sustainable improvements for their people. They are bolstering economic growth and addressing the need for widespread access to electricity.
Africa needs more of this.
While there is little we can do to influence oil prices, there are tangible steps that African countries can, and should, be taking to increase the chances of much-needed investment dollars going into their energy projects. These include working toward increased government transparency, passing legislation that protects the sanctity of contracts, and implementing more competitive fiscal re- gimes. We need to be working on these measures now. This is how we will make a lasting difference in Africa. This is how we will empower people to develop the necessary skills to land well-paying jobs. This is how we will promote stability.
The Bank of Central African States (BEAC) foreign exchange regulations set to go into force in January 2021 is a classic example of what we should not be doing in Africa. Bureaucrats are not listening because they are comfortable with tax dollars and killing businesses and investment.
If the BEAC, the International Monetary Fund and the World Bank bureaucrats really mean what they say about helping Africa and Economic and Monetary Community of Central Africa countries bounce back from COVID-19, should they not be listening to what the people who actually run business- es have to say about job creation? After all, business employs 80% of the region's private sector workforce and accounts for more than 99% of its employers.
When over two-thirds of job creators, especially energy companies, tell us how to create jobs in an economy that desperately needs them, bureaucrats and politicians should not only listen, they should do something or get out of the way and let business work. Africa should not focus on development aid in exchange for job and investment killing regulations. We can do better than this. Free markets, limited government, cutting red tape and individual liberty are still our best bet, rather than begging for bailouts and foreign aid.
For years, when I have called for strategically harnessing Africa's petroleum resources to bring about prosperity and stability for Africans, I have discussed the importance of monetizing our vast supplies of natural gas. Instead of flaring gas or exporting all of it, African countries should be using it to diversify their economies and establish new revenue streams, from petrochemical and fertilizer manufacturing to liquified natural gas plants. Partnering with foreign investors, more Af rican countries could build midstream and downstream infrastructure, from pipelines and ports to refineries. Each of those projects, in turn, would generate more revenue and open the door to even greater diversification efforts. Investors would have an important role in this process. Not only could they partner with countries on infrastructure development, but by investing in capacity building and local content, they could also enable individuals and businesses to qualify for the job and contract opportunities that result. This will create monetization that truly benefits local economies.
Not only does the continent need ongoing foreign investment, it also needs the technical knowledge and expertise that the international business community can provide. Knowledge transfers empower local companies - including oil and gas industry suppliers, service companies and indigenous oil and gas companies - to cultivate the skills and technologies necessary to thrive in a continuously evolving industry.
Furthermore, knowledge sharing plays a valuable role in eliminating the need for foreign as- sistance. We realize that, with the COVID-19 pandemic wreaking havoc upon African econ- omies, there has been more talk of aid packag- es to meet basic needs. And while donations and aid are appreciated and valuable during crises like the one we're experiencing, they can do nothing but serve as a temporary emergency safety net. Rather than doing things "to help Africans," I would like to see more foreign governments and companies partner with African countries to make sustainable changes for the better. Equipping African countries to thrive is a highly effective way to do that. Knowledge transfers contribute to stronger economies, increased entrepreneurial activ- ity and job creation.
To make doing business easy with and within their countries, government leaders should be looking at their tax frameworks, so investors can be sure their hard work will yield fair dividends. They should be looking for ways to eliminate red tape, implement better fiscal regimes and ensure transparency. And while countries should have local content policies in place to benefit individuals in businesses, they should put effort into creating policies that are fair, not burdensome, to operators. Furthermore, governments must enact legislation that ensures the sanctity of contracts so investors know their agreements will be respected.
Along with these efforts, oil and gas project developers and owners have their own role to play in drawing investors. It has become increasingly important for oil and gas projects to adopt strong environmental, social and governance (ESG) standards. While these will vary by project, examples could include carbon emissions reduction and operational energy efficiency in the area of environment. Social standards could include health and safety measures and relationships with local suppliers and service companies. Examples of governance policies could include lead- ership diversity and reporting transparency. Investors are considering ESG, and project developers must do the same.
Foreign investment opportunities will play an important role in supporting economic growth and eliminating energy poverty in Africa for years to come. That's why the African Energy Chamber will continue to work to help African countries make themselves more attractive to investors and to make potential investors aware of the many opportunities Africa offers them. It is worth a different kind of investment on our parts as Africans – investments in time and effort.
The end result? More promising developments like the ones emerging in Senegal, Rwanda and Uganda. Economically vibrant African countries. Thriving African households and entrepreneurs.