London – African nations need to respond to the commodity price crash by overhauling the continent’s regulatory burden and bolstering its energy infrastructure, prominent executives and officials have told a Financial Times summit.
Participants at the London conference were virtually unanimous that reforms delayed when oil and metal prices were rising can be put off no further now that demand from China has slowed and the commodities supercycle is on a downturn.
“It is a call to both regulators and business to ensure they maintain foreign direct investment and encourage local entrepreneurs,” said Wale Tinubu, chief executive of Nigerian oil and gas company Oando, arguing that it was now urgent to diversify countries’ economies across the resource-rich continent.
A chief focus of his and other participants’ attentions was the energy sector, where pricing regulations have often deterred investment. Efforts to industrialise countries’ economies have often been hobbled by inadequate energy supply. Spain produces more electricity than all of sub-Saharan Africa.
Mr Tinubu said the focus in Nigeria’s energy sector had long been on exports rather than re-routing excess oil and gas into the low price local market, which is badly short of energy to power Africa’s biggest economy.
The backdrop to his comments is the reversal of fortunes of oil revenue-dependent countries such as Ghana and Nigeria, both of which have been forced to devalue their currencies by more than 20 per cent against the dollar since the oil price fall began last year.
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