Introduction
The Africa vision of the accelerated economic and industrial development was established by the Heads of State and Governments of the African Union in 2015 and is incorporated in the national planning framework of over 30 countries. In this case, faster economic expansion is accompanied by the full achievement of access to electricity and clean cooking, in line with Sustainable Development Goal. It is against this background that leaders in Africa reached an agreement to actualize the Sustainable Development Goal by fostering economic expansion through a stable energy supply in African countries. On 30th May 2019, the Agreement established the African Continental Free Trade Area (AfCFTA). The general objectives of AfCFTA include the creation of a single and liberalized market, free movement of capital goods and people, eliminate tariff and non-tariff barriers and many more. Trading under the AfCFTA Agreement was expected to begin on 1 July 2020, but due to the global pandemic of COVID-19, this date has been postponed till 1 January 2021.
The stated objectives of the AfCFTA will ensure equal resources distribution, both human and natural resources in the continent, especially in the sub-Saharan region where demand is high compared to North Africa. This is so because of the number of countries that made up the region. These countries include Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Cote d'Ivoire, Eritrea, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Somalia, South Africa, United Republic of Tanzania, Togo, Uganda, Zaire, Zambia, Zimbabwe. As evidenced in figure 1 below, the most populous country and the biggest economy in Africa, Nigeria, is located in sub-Saharan Africa. Sub-Saharan Africa will therefore experience an increased demand for electricity and clean energy to meet their basic needs.
The region is endowed with dirty and clean energy; however, as the world is switching to cleaner energy, Natural gas to be specific, there is the need to transport clean energy from the endowed countries to the needy countries within sub-Saharan Africa. This will also help in actualizing the objective of the AfCFTA to foster economic expansion through a stable energy supply in not only in the region but to Africa as a whole. Natural Gas deposits have been discovered in 14 countries Sub-Saharan Africa, with Nigeria’s gas reserves accounting for 68 per cent of proven reserves. Several undeveloped fields in other parts of Africa account for 32 per cent of total gas resources. The gas producing countries are listed in table 1 below in accordance to the World Factbook (2020):
Table 1: Gas Producing Sub-Saharan Africa Countries World Factbook (2020)
Figure 2: Gas Producing Sub-Saharan Africa Countries
Source: World Factbook (2020)
In order to ensure equitable distribution of the gas resources, it is important to develop infrastructure for the importation of natural gas to support local demand in other sub-Saharan countries with no gas reserves. This will require sufficient investment in upstream natural gas infrastructure. With increased demand from household, commercial and industrial users, the lack of infrastructure is becoming a constraint. Extensive pipeline installations from collection, refining and storage facilities to end-user facilities are pivotal to steady market performance.
Some regional economic communities have done a great deal to liberalize trade with their neighbours, by permitting the free movement of people and building cross-border infrastructural links. An example of such regional initiatives/projects is the West African Gas Pipeline (WAGP). Nigeria, Benin, Togo and Ghana built the first regional pipeline in 1982 known as the WAGP. It is a natural gas pipeline to supply gas from Nigeria's Escravos region of Niger Delta area to Benin, Togo and Ghana.
The Trans- Saharan Gas pipeline initiative to run from Nigeria through Niger Republic to Algeria and Europe was the second attempt to build a regional gas pipeline infrastructure. However, this project was marred by Niger Delta Militant activities and high cost that was involved. While Africa's network of gas transportation infrastructure and services is still disjointed, the gas sector is showing signs of greater integration, particularly in the less endowed sub-Saharan Africa countries. The AfCFTA policy and framework should serve as a tool to establish a gas pipeline in the sub-Saharan region because of the potential benefits it holds.
Potential Benefit of Pipeline Infrastructure to Economic Development in Sub Saharan Africa
A well-structured gas pipeline network will ensure fast and reliable transportation of gas from the endowed countries to the needy countries. This will give quick access to clean energy for lighting, and power industrial machines for mass production of goods and services. Investors and entrepreneurs will grab the opportunity to increase their capacity to produce more quality goods and services, thereby leading to economic development in sub-Saharan Africa. Below are some of the potential benefits of pipeline infrastructure:
Increasing Economic Efficiency
There is a greater awareness of the role of pipeline infrastructure in socio-economic development. If countries endowed with natural gas in sub-Saharan Africa exploit it at daily maximum capacity and supply to other countries that are not endowed with natural gas, this will improve the Africa per capita income. The transition from traditional means of transport to modern gas pipeline infrastructure carries the greatest hope for millions of people in the sub-Saharan Africa countries for quick access at a lower cost.
Macro productivity
A sub-Saharan Africa-led approach to gas pipeline infrastructure development will help leverage private investment through expanded market size, allowing investors to reduce road transportation risks. In the longer-term, the interconnections of gas pipeline infrastructure will lower supply costs by replacing the traditional means of transporting gas in the region. This has a very important implication for the debt burden of many Africa economies that have been trading electricity across borders.
Increased Demand
Demand for natural gas in the region is expected to grow as the population increases every year. According to the Africa Energy Outlook (2019), Africa’s population is among the fastest-growing and youngest in the world. One-in-two people added to the world population between today and 2040 are set to be African, and the continent becomes the world’s most populous region by 2023, overtaking China and India. A regional approach to meeting the demand makes economic sense if this approach to gas pipeline construction to convey gas throughout the region is adopted.
Cost Efficiency
Sub-Saharan gas pipeline infrastructure cooperation and integration offer one of the most promising and cost-efficient options for the countries. Building gas pipeline infrastructure will keep the environment safety as well as social and economic benefits from more efficient use of resources.
Security of the Gas
Security of the gas supplied will be ensured with gas pipeline facilities in the region and gas flaring will be minimal and this will also enhance environmental quality.
It is the negative environmental “externalities” associated with energy supply and use but not energy itself that can lead to economic failures.
Conclusion
The vision and commitment of African leaders to the objectives and principles of economic cooperation led them to create the African Continental Free Trade Area (AfCFTA) as an instrument for fostering African economic development. This commitment aims to ensure barrier-free trade in relation to gas and pipeline facilities which envisages the need to establish gas pipeline infrastructure for quick-access and easy transportation of gas from the well-endowed countries to the needy countries in the sub-Saharan African countries. This increased demand will create a better job market as suppliers will need to build up their workforce. Increased income then results in additional demand of consumer goods and services, thus persuading a complete round of economic stimulus. This establishment can be achieved if the principles embodied in the AfCFTA are fully implemented. African leaders are therefore implored to fully implement the AfCFTA policies for speedy economic emancipation and growth in the Sub-Saharan region.