A top African energy advocate is accusing Western banks of unfairly discriminating against African oil and gas projects, calling it “financial apartheid.” NJ Ayuk, chairman of the African Energy Chamber, claims that while Western countries enjoy investments in their energy sectors, African nations are being denied similar support due to biased policies under the guise of climate change. He argues that this discrimination not only hinders Africa’s economic growth but also perpetuates a form of modern colonialism. To fight back, the Chamber plans to take these financial institutions to court, seeking justice for what they see as the unjust treatment of Africa’s energy potential.
The leader of a key African energy group is accusing Western financial institutions of unfairly treating African oil and gas projects. According to NJ Ayuk, chairman of the African Energy Chamber (AEC), Western banks are being “very unjust, hypocritical, and colonial” in their approach to financing energy projects in Africa.
For years, many Western banks and financial organizations have been cutting back on supporting fossil fuel projects as part of their commitment to fight climate change. But Ayuk claims that these institutions are applying different standards to African energy investments compared to those in Europe and America.
He pointed out a glaring inconsistency: natural gas is considered a harmful fossil fuel in Africa but is viewed as a green energy source in Europe. Ayuk finds this double standard outrageous and argues that the same criteria should apply everywhere.
Africa’s Missed Opportunities
Europe has been rapidly building facilities to import liquefied natural gas (LNG) and has signed many deals to secure new LNG sources over the past two years. This is seen as crucial for energy security, and the EU even classified natural gas as a sustainable investment in 2023. This allowed banks to fund such projects.
However, Africa has missed out on this investment wave. While countries like the US and Qatar have seen many new LNG projects, Africa has hardly seen any new approvals in the past two years. Ayuk attributes this to the lack of international financing.
The Fight Against “Financial Apartheid”
The AEC plans to sue Western financial institutions in their own courts next year, with the backing of top law firms and African governments. Ayuk describes the situation as “financial apartheid,” where African energy projects are unfairly neglected under the guise of environmental and climate concerns. He believes this is a human rights issue and is confident that the justice system will listen to their case.
Ayuk argues that developing oil and gas resources in Africa could significantly improve living standards by creating jobs, boosting local industries, and addressing energy poverty. Many Africans lack basic electricity and clean cooking fuels, leading to serious health issues. He emphasizes that Africans deserve the same opportunities as Europeans and should be able to find work and prosperity in their own countries rather than seeking opportunities abroad.
The Criticism of Fossil Fuel “Demonization”
Ayuk also criticizes the negative perception of fossil fuels. He believes that making fossil fuels the villain in energy discussions is leading to underinvestment in the sector and not offering practical solutions. Major oil companies like Chevron, ExxonMobil, and Shell play a vital role in creating jobs and supporting African governments. Without their revenues, Africa might face more political instability.
He also takes issue with the International Energy Agency (IEA), claiming it has become too politically focused and its recommendations unrealistic. The IEA, originally created to handle oil supply crises, has been pushing for policies that aim for zero emissions by 2050, including a scenario suggesting no new investments in oil, gas, or coal.
Current and Future LNG Projects in Africa
Despite the overall slowdown, some significant LNG projects in Africa are progressing. For example, TotalEnergies’ $20 billion Mozambique LNG project aims to develop major gas fields and is underway. Other projects like Eni’s Coral South FLNG in Mozambique and BP’s Greater Tortue Ahmeyim project between Senegal and Mauritania are also moving forward.
However, some projects have faced delays. The Tanzania LNG project is stalled due to changes in agreements, and Nigeria’s UTM Offshore has pushed back decisions on its own LNG project. With expectations that global LNG markets might become oversaturated by the end of the decade, these delays could affect the demand for African LNG.
Overall, Ayuk’s message is clear: Africa’s potential in the energy sector is being overlooked due to unfair practices, and it’s time for a change.
