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Why is the demand for oil and gas huge in Africa?

According to a 2004 United Nations Report, when compared to other regions of the world, especially developing areas in Latin America, the Middle East and Asia, Africa has the lowest energy consumption per person.

Today, the situation is changing very rapidly. At a growth rate of 4.1 percent, the consumption of energy per person in Africa is growing faster than anywhere else in the world.

As long as the demand for more energy continues to grow on our continent, the oil and gas business will continue to boom and become more lucrative.

We shall now look at a couple of reasons for the growing demand for energy in Africa.

#1 A fast growing population

Africa has one of the fastest growing populations in the world with an annual population growth rate of nearly 3 per cent over the last 20 years.

With the world’s highest birth rate, our current population of nearly one billion people is expected to more than double within the next 40 years to 2.3 billion people.

The logic here is simple; the larger the population, the higher the energy that will be consumed. Nearly everything we do or use in today’s world requires energy: lighting, heating, cooking, transportation, lighting and so on.

#2 The size of African cities is increasing

The amount of energy consumed in cities is much higher than in rural areas.
Due to the nature of city life and its higher level of physical and economic activities, people, companies and even the government spend more on energy to keep things running.

With our current rate of urbanization at 38 percent, Africa now has more people living in cities and rural areas than India (30 percent). Our continent is now as nearly urbanized as China which has a 45 percent urbanization rate.

At the moment, up to 52 African cities have a population of more than one million people. By 2016, the number of cities with more than one million people will reach 65. This outcome will lead to more energy consumption on our continent as the size and population of our cities grow.

#3 Africa’s economies are growing

You would have heard that six of the ten fastest growing economies in the world are in Africa. It is nearly impossible in today’s world for any economy to grow without a corresponding growth in the amount of energy it consumes.

Factories will need energy to produce goods that boost the economy. People need to move around (transportation) to conduct business and involve in the actual trade and commerce that leads to economic growth.
Another interesting reflection of the growing African economy is its expanding middle class. At the moment, there are more than 300 million people on the continent who fit into this category.

The African Development Bank describes the ‘middle class’ as people who spend between $2 to $20 a day and many people in this category can afford to spend more on energy. They are more likely to use and spend more on kerosene or cooking gas in place of charcoal and firewood (which are popular with low income earners).

Some of these people may own their own cars and use private power generators for electricity.