General News
DHL Says African Oil & Energy Sector Fuelling Global Investor Growth
While exploration activity in Africa is at its highest level ever, the continent remains largely unexplored.
While Oil and Gas activity in West Africa is nothing new, it is the activity in East Africa which is creating a stir amongst exploration companies and of course, their suppliers.
This is according to Steve Harley, president, DHL Energy Sector, who said that while Angola and Nigeria have always been the most notable producers within the Sub-Saharan region, more recently, significant gas discoveries in Tanzania and Mozambique, has led to East Africa now receiving its share of attention from global oil companies and potential investors.
“Oil discoveries in Uganda and Kenya have also added to the excitement in the sector as new players look to enter these markets, including some of the largest independent and international oil companies, otherwise known as the super majors, who are now also witnessing the potential in this region.”
He said that in addition to the developments in East Africa, both Namibia and South Africa are also on the radar of investors within the sector.
“South Africa in particular is receiving much attention, mostly because of the potential of shale gas in the Karoo, but also because it has a long and largely unexplored coastline, off which many believe large hydrocarbon fields may exist. As a result of the region’s potential, there are several offshore drilling exploration expeditions currently being planned in South Africa by the major oil companies.”
“While exploration activity in Africa is at its highest level ever, the continent remains largely unexplored”, says Harley. PwC’s Africa Oil & Gas review titled ‘From promise to performance’ released in June 2013, revealed that Africa currently supplies approximately 12% of the world’s oil and boasts untapped reserves estimated at 8% of the world’s proven reserves.
“With the ever-increasing need for energy in Asia and in particular China, many of these countries are positioning themselves strategically in Africa as they seek to tap into new resources to support their growing energy needs.”
“Despite the significant developments in the renewable energy sector, the world’s dependency on hydrocarbon-fuelled energy resources will continue for many years to come. According to the BP Energy Outlook 2035 report, global energy consumption is expected to rise by 41% from 2012 to 2035, and that 95% of that growth in demand is expected to come from the emerging economies.”
“Across the globe, existing and previously significant oil reserves are being depleted and so the need and desire to explore new geographies and develop new technologies to reach and extract difficult oil and gas reserves becomes ever more apparent. These new technologies are being developed at a rapid rate, which is allowing previously challenging operations and inaccessible deposits to be economically extracted and produced.”
He added that DHL is also beginning to witness many exploration companies, as well as the oilfield service companies, outsource non-core functions within their own supply chains.
“This is creating opportunities for small and medium enterprises to provide products and services required to support oil and gas operations locally. The knock-on effect can therefore be game- changing for any single country or region in terms of economic development. The importance of this outsourcing and localisation trend therefore cannot be underestimated,” said Harley.
The company is also witnessing stronger relationships and increased levels of collaboration between African countries as they seek to share risk and jointly benefit from a united approach and vision.
This is particularly evident in East Africa in countries such as Kenya, Uganda, Tanzania and South Sudan. A recent example of collaboration in Mozambique is the expansion of oil and gas company Sonangol, from Angola.
Harley said that there is no sign of the activity within the sector slowing down.
“The increased activity within the sector bodes well for the continent in general, and the fact that the company is already seeing positive economic effects of the new investments across the continent is extremely encouraging.”
“At DHL, we work closely with our customers to optimize their complex supply chains and manage logistics costs better, so that companies can focus on their core activities. And, our team applies the same exacting HSSE and compliance standards as the industry itself.
“We have been operating in Africa since 1978 and our unrivalled footprint is only rivaled by the size of our air network – we are the only logistics company to operate our own aircraft in Africa which currently consists of 14 dedicated aircraft, servicing all corners of the continent. When it comes to the oil and gas sector, it rings true, that Nobody Knows Africa like we do,” concluded Harley.
Nigeria Atomic Energy Commission (NAEC), has said that there are plans for Nigeria to begin to generate electricity from nuclear sources.
Mr Anthony Godwin Ekedegwa, chief executive, NAEC stated this when he recently visited Mr Umar Yusuf Girei, acting managing director, National Inland Waterways Authority (NIWA),in Abuja.
He was at NIWA’s office to solicit the support of NIWA in achieving the numerous advantages of using nuclear energy technology in the country.
According to him, the partnership of critical stakeholders in Nigeria will position the country well in developing and maintaining its nuclear power plant.
The NAEC chief said Nigeria intends to begin the generation of electricity from nuclear sources instead of fossil-based power plants and hydro-based power plants, stressing that for Nigeria to develop, there is a need for the country to diversify its energy needs.
In his remarks, Mr Girei assured NAEC of his agency’s readiness to collaborate on the advancement of a nuclear power plant in Nigeria.
He promised the full support of NAEC for the success of a nuclear power plant in the country, saying that as the organisation saddled with the responsibility of regulating and developing Nigeria Inland Waterways, his entity is strategically positioned to play a critical role in the federal government’s quest for sustainable energy through the new technology.
In a powerful call for continental solidarity, Ralph Mupita, Group CEO of MTN, has asserted that the future of the African continent depends on the dismantling of xenophobic barriers.
Speaking at the Kgalema Motlanthe Foundation (KMF) Winter Seminar, Mupita framed migration as a fundamental characteristic of the African identity, urging South Africa and other nations to embrace integration over exclusion.
He emphasised that the survival of African enterprises depends on a borderless approach to trade and talent. “The digital economy we’re fast moving to knows no borders.” Mupita declared, noting that the mindset of exclusion is an outdated relic that hinders the continent’s ability to compete globally.
He argued that for Africa to leverage the African Continental Free Trade Area (AfCFTA), the psychological barriers of xenophobia must be eradicated.
Providing a stark financial justification for this stance, Mupita highlighted MTN’s own operational reality as a blueprint for Pan-African success. “We earn about 80 to 82% of our earnings from outside South Africa,” he revealed, illustrating that the prosperity of South African-born entities is inextricably linked to their success across the rest of the continent. This figure underscores the interdependence of African economies and the danger of isolationist policies.
Mupita’s stance was strong advocating for unity: “The future of Africa will not be determined by the borders that separate us, but by the economic opportunities that connect us. Governments must set predictable policy and regulations.
Businesses will follow and allocate resources and capital. Together, we can build a continent where opportunity is more evenly shared and prosperity is more widely created.”
Analysts observing the seminar noted that Mupita’s remarks come at a critical juncture where economic volatility often fuels nationalist rhetoric. By tying the fight against xenophobia to the balance sheet, MTN is positioning Pan-Africanism beyond the moral imperative to its function as a business necessity. The CEO stressed that “Migration is part of who we are,” suggesting that the movement of people is the primary engine for the movement of capital and innovation.
Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government and the National Pension Commission (PenCom) to suspend the proposed increase in Nigeria’s mandatory pension contribution from 18 per cent to 21 per cent, warning that the policy would raise the cost of doing business, threaten jobs and undermine enterprise sustainability at a time of mounting economic pressures.
Dr. Chinyere Almona, director general of the LCCI, said while strengthening retirement security remains an important policy objective, increasing mandatory pension contributions by three percentage points would impose additional financial burdens on businesses already grappling with high borrowing costs, persistent inflation, foreign exchange volatility, rising energy prices and multiple taxes.
According to the chamber, the proposed increase comes at a period when many businesses, particularly micro, small and medium-sized enterprises (MSMEs), are struggling to remain profitable amid Nigeria’s challenging operating environment.
The LCCI noted that Nigeria’s existing mandatory pension contribution rate of 18 per cent comprising 10 per cent by employers and 8 per cent by employees is already broadly aligned with the Organisation for Economic Co-operation and Development (OECD) average of 18.8 per cent.
It argued that raising the contribution to approximately 21 per cent would place Nigeria above several comparable economies, including the United Kingdom, where mandatory contributions stand at 8 per cent; the United States at 12.4 per cent; Kenya at 12 per cent, subject to earnings caps; and South Africa, where there is no equivalent mandatory private-sector pension contribution.
The chamber warned that implementing the proposed increase would significantly raise employment costs for employers, discourage new recruitment, constrain wage growth and place disproportionate pressure on MSMEs, which account for a substantial share of employment in Nigeria.
According to the LCCI, the higher payroll obligations could also reduce Nigeria’s competitiveness as an investment destination, encourage non-compliance with pension regulations and push more businesses into the informal sector.
“A stronger pension system cannot be built on weaker businesses,” the chamber stated, stressing that economic sustainability and business growth remain critical to expanding pension coverage over the long term.
The LCCI therefore called on the Federal Government to defer the proposal until a comprehensive Nigeria-specific actuarial and economic impact assessment is conducted to determine its implications for businesses, workers and the broader economy.
It also urged policymakers to engage in extensive consultations with organised private sector groups, labour unions and other key stakeholders before implementing any changes to the country’s pension contribution framework.
According to the chamber, the government’s immediate priority should be restoring business confidence, preserving existing jobs, encouraging investment and expanding the formal economy, which it described as the most sustainable pathway to improving retirement savings.
As an alternative to increasing contribution rates, the LCCI advised PenCom to focus on developing more innovative investment instruments capable of generating stronger returns on pension assets.
The chamber said improving investment performance would enhance contributors’ retirement savings without imposing additional financial obligations on employers and employees already facing difficult economic conditions.
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