African governments must develop practical and market driven local content regulation to promote their energy sectors, the Regulatory Affairs Committee (RAC) of the African Energy Chamber (AEC) has said.
The AEC said this in a statement on a raft of proposals the RAC made after its maiden meeting of the year in South Africa to discuss regulatory matters that impede African energy sector’s growth and come out with proposals on progressive regulation fit for the post COVID-19 recovery.
The purpose of the meeting was also to identify and track global regulatory trends and make propositions to African regulators on how these could be adopted and adapted to improve the operating environment in Africa’s energy sector.
RAC-AEC called for environmental regulations that were in line with international standards and did not inhibit new exploration projects.
“There is the need for constant exchanges between regulators in Africa to create an awareness for alignment and also exchange of best practices,” RAC-AEC said.
The President and Chief Executive Officer (CEO) of WTD Resources, Bill Drennen, emphasised the importance of continuous dialogue and seminars between the Chamber and regulators.
According to Mr Drennen, who is a member of RAC, there was the need for regulation of Africa’s energy sector.
“The aim of regulation should ultimately be to regulate the industry in a way, that allows maximum investment to flow into the sector and be productive and profitable for all stakeholders,” he said, adding that “The chamber has a leadership position on the continent and is therefore perfectly positioned to drive positive change in the African Energy sector regulatory space.”
A Partner at ASAFO & Co, Nicolas Bonnefoy indicated that that “Many African countries have severe constraints such as their slow administrative processes which have delayed new regulations being introduced that will render these states competitive in a post COVID era.”
According to Mr Bonnefoy who is a member of RAC, many African governments often implemented new policies and new regimes without taking into consideration market realities and competing regimes globally, often leading to no definite positive outcome.
“The Chambers’ job right now is to engage with regulators, and where they might need expertise that is not in-house, offer expertise that is available at the AEC,” he said.
The AEC said through its work, the Regulatory Committee was able to assist the Chamber in crafting propositions that led to some changes in regulations on how to soften the impact of COVID-19 on energy companies in a number of countries at the start of the pandemic in 2020.
BY KINGSLEY ASARE