Africa set to out produce all BRICS

Africa set to out produce all BRICS

The oil majors are well known for funding research into long-term energy production and consumption forecasts for all parts of the world. Slight annual changes can result in substantial differences to output and marketing strategies.

We look at the conclusions of the most recent BP report into long-term African energy trends. The importance of a country as an energy market can be assessed by calculating its total energy consumption, including oil, gas, coal, electricity and even firewood.

It is important to include biofuels, such as firewood, because this gives an idea of the size of the potential commercial market for other forms of energy, such as electricity and liquefied petroleum gas (LPG), which can be used to replace firewood.

The usual international unit of measurement for energy consumption is British thermal units, or Btu. As Table 3 on the following page demonstrates, South Africa, Egypt and Algeria are by far the biggest energy consumers on the continent. Despite their huge populations, Nigeria, Ethiopia and Democratic Republic of Congo are still very modest per capita energy consumers, even in African terms.

All but 19 African states consume less than 0.1 quadrillion Btu a year, meaning that they are irrelevant in international terms. This perhaps helps to explain why private sector investors are so reluctant to finance power plants in such markets. By contrast, the US consumes about 98 quadrillion Btu a year.

Oil companies, governments and international financial organisations widely expect Africa to experience faster growing energy demand than any other region over the next 20 years, partly because of population growth but also as a result of economic growth. The continent’s 1bn people currently account for 15% of the world’s population but their numbers are expected to grow to 1.8bn by 2035, equivalent to 21% of the global total.  At the same time, African energy consumption is projected to increase by 93% between 2013 and 2035, well ahead of the global average of 41%. Yet the continent will still account for just 4% of total global energy consumption.

A bigger population means more consumers of food, mobile phones and transport. Despite claims to the contrary from some sources, Africa is not on the verge of rapid industrialisation. The energy-intensive building industry may drive up demand for electricity but heavy industry and manufacturing are likely to experience steady rather than spectacular growth.

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Written by African Business Magazine

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