Africa’s oil states ‘face huge losses’ by 2040

©www.businessghana.com

Oil and gas-producing countries, including several in Africa, face a multi-trillion-dollar hole in their government revenue as the world cuts back on fossil fuels, according to a report by the think-tank Carbon Tracker.

It estimates the cumulative total revenue loss by 2040 will be $13 trillion (in 2020 dollars).

For seven countries, including Angola, Equatorial Guinea and South Sudan, the predicted loss is at least 40 per cent.

For another 12, including Algeria, Chad, Congo, Gabon, Libya and Nigeria, it is in the range of 20 per cent to 40 per cent.

The report – Beyond Petrostates – noted that several countries facing falling revenues had large populations, singling out Nigeria with 206 million, Algeria with 43 million and Angola with 33 million.

The report suggests that these countries should be helped to diversify their economies and reduce dependence on fossil fuels.

Such assistance would reduce the risk of instability and social unrest, as well as help to curb rising temperatures, it says.

A new report says that oil and gas producing countries face a multi-trillion-dollar hole in their government revenue.

The report from the think-tank Carbon Tracker looks at the financial impact as the world cuts back on fossil fuels.

It estimates the cumulative total revenue loss for all oil-producing countries by 2040 will be $13 trillion (in 2020 dollars).

That is as efforts to contain the rise in global temperatures drive the decarbonisation of energy supplies.

Carbon Tracker describes its report as a wake-up call to oil producing countries and international policymakers. It says they have planned on the basis that demand for oil will increase until 2040.

But the agency warns that demand will have to fall to meet climate targets, and oil prices will be lower than oil producers and the industry currently expect.

The report looks at what would happen to government revenues if the increase in global temperature is limited to 1.65C.

The $13 trillion figure for lost revenue is compared with what it calls “business as usual” expectations of continued growth. It includes countries whose economies are not dominated by oil – such as the UK, the US, India and China.