Old issues deter new investment in African oil and gas
Africa’s proven oil and gas reserves account for 7.5% and 7.1% of global reserves, respectively. But the challenges for investors in Africa’s oil and gas sector are myriad
While the recovery in commodity prices has drawn some investors back to the continent, policy uncertainty, a lack of infrastructure and corruption remain a deterrent to investment in the oil and gas sector, according to a report by Deloitte. Africa’s proven oil and gas reserves account for 7.5% and 7.1% of global reserves, respectively. But the challenges for investors in Africa’s oil and gas sector are myriad. Because the capital investment often comes from abroad, regulatory uncertainty or overly complex regulation has deterred investment, Deloitte’s research however acknowledged the flux in the regulatory and policy environment is often motivated by national governments’ attempts to try to balance the economic value derived from the oil and gas industry with social needs — and so will remain a reality of doing business on the continent. Another challenge is corruption, which continues to have a detrimental effect on investment in Africa. Not only does it make the process of build...
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