African Energy Chamber expects LNG to prevent massive jobs destruction in Africa
Despite the profound crises of 2020 which have jeopardized hundreds of thousands of jobs across Africa, the African Energy Chamber expects employment to remain strong due to ongoing capital projects sanctioned since 2018, especially LNG ventures.
Inflexible capital programs will indeed assist in sustaining the overall employment throughout 2020 and 2021. As a result, the Chamber does not see big immediate impact from COVID-19 in 2020 and 2021 on job numbers as the initiated capital programs in 2018 and 2019 are ongoing and ramping up activity. This is particularly the case for Total’s mega greenfield Mozambique LNG project in Mozambique requiring north of 10 000 employees to set up two liquefaction trains with a combined export capacity of 12.88 mtpa.
Additional projects, such as Eni’s 3.4 mtpa Coral Sul FLNG project, also in Mozambique, or BP’s 2.45 Greater Tortue Ahmeyim (GTA) LNG project in Mauritania and Senegal will also contribute to maintaining employment rates in the short term. The same applies in Nigeria with the NLNGSevenPlus project, sanctioned by Nigeria LNG Ltd before the Covid-19 pandemic.
Towards 2025 however, the numbers of jobs are expected to decline again on the back of new projects in 2020 and 2021 not being sanctioned due to COVID-19. Major new ventures were indeed expected to be sanctioned this year and create thousands of jobs, including Ghana’s Pecan Field Development by Aker Energy or ExxonMobil’s 15.2 mtpa Rovuma LNG project in Mozambique. As a result of their delays, the impact of the current crisis on jobs creation and employment in Africa is expected to be more severe in a few years than it is currently, unless immediate measures are taken to mitigate the impact of the pandemic and restore investors confidence.
The African Energy Chamber notes that Jobs creation will continue to have the greatest potential if Africa can harness its natural gas and downstream industrial potential by transforming and monetizing its resources at home. Put simply, strong policies need to be put in place so that local capacities increase and are supported by strong industrialisation and local transformation of resources, including through refining, petrochemicals, fertilizers, cement or power production.
The 2021 Outlook notably calls for increased regionalisation of African energy markets, and stronger efforts from regulators to promote an enabling environment for local and international investors. Hundreds of thousands of African jobs are on the line and risk being lost unless bold measures are taken to ensure regulatory certainty, adopt better fiscal reforms and render the sector competitive for entrepreneurs and investors.