Oil To Change Economy Of West Africa
The discovery of hydrocarbons in the traditionally under-explored West African countries such as Ghana, Senegal and Liberia are set to fundamentally change the economy of this region over the next decade.
The development of a consumer hungry middle class is driving both industrialisation and urbanisation. To achieve this transformation, significant capital will need to be invested in upstream, midstream and downstream operations. While part of the capital will come from the region, the sheer scale of the investment will require large external capital inflows.
Discoveries such as those by the Hess Corporation, an American oil company illustrate that further exploration potential exists both offshore and in the Voltarian valley and further production growth beyond 2021 is realistic.
Experts believe that the potential impact of the expansion of the petroleum sector in Ghana and potentially across the region is only now being understood by the wider global capital markets.
Commenting, Stanbic Bank Ghana Chief Executive Officer Alhassan Andani said: “Ghana sits on the threshold of a major expansion of the industry from a participant to a regional leader. Investors are keen to invest and are looking for guidance as to where and how to invest.”
He continued: “Standard Bank, through its on-the-ground presence and global industry expertise is well placed to attract and structure the huge capital that will be needed to deliver this potential to Ghana as it is doing in Nigeria, Mozambique and across the continent.”
The European financial crisis, has created a financing vacuum that Standard Bank, parent company of Stanbic Bank Ghana, and other emerging market lenders have been quick to fill given the increasing demand for investment opportunities.
Standard Bank was the third largest arranger of syndicated loans over the past 12 months with eight offerings, having concluded loan facilities in the following oil or gas producer countries: Uganda (USD 115m syndicated loan); Ghana (USD 300m syndicated loan); Mozambique (MZN 1.15 billion commercial paper); and Angola (USD 1.5 billion receivables purchase agreement).
“The potential in Africa is enormous and we at Stanbic Bank are now focusing our entire operations on delivering the capital the industry requires in the continent, Ghana will play an increasingly important role in this going forward,” Mr. Andani said.
As the leading corporate and investment banking business in key African markets such as Ghana and Mozambique, Standard Bank has identified oil and gas as well as the whole resources sector as key pillars for its financing.
Coupled with its deep specialisation in natural resources globally, the Standard Bank is well-positioned to play a significant role in facilitating the development of Ghana’s natural resources sectors, together with the necessary infrastructural development.
It would be recalled that in 2007, in the deep waters off the coast of Ghana, an independent US-based oil exploration company Kosmos Energy discovered an extensive reservoir of oil now known as the Jubilee Field. Six years later, that find has established Ghana at the forefront of the oil and gas boom in the region.
Oil has subsequently outstripped cocoa as Ghana’s second-biggest export earner with shipments worth $3 billion, according to Ghana’s central bank. This makes Ghana the 50th largest oil producer in the world, ahead of countries such as France, Turkey and Spain, according to statistics compiled by the Central Intelligence Agency’s World Factbook.