Three Questions with Nyonga Fofang

Nyonga Fofang, Managing Director of Africa-focused private equity firm Bambili Group, talks to Africa Oil & Power about his expectations for the industry in 2017.

The next big thing: Where do you see the greatest opportunities for the oil, gas and power sectors in Africa?

This year we still see an oversupply of oil in global markets, with oil prices expected to remain comparatively low for a long period. Due to this, I believe that producers will have to be smarter by leveraging on new technology to cut costs to remain efficient and nimble. These market conditions will also require them to be more creative in the development of new projects and the sourcing of funds. In the meantime, there will be lots of opportunities in renewable energy and gas-to-power projects.

Making Africa more attractive for investment: What does it take and what do you want to see?

According to IMF reports, political and economic risk from the developed world is emerging as a threat to the global economy. Low growth of under 2 percent is being recorded in Europe and the United States, while emerging markets and developing economies are projected to grow at slightly over 4 percent. Africa’s large oil exporters like Angola and Nigeria have been hurting due to the decline in oil prices and the slowdown in China has also been a factor, affecting commodities exporters that rely heavily on Chinese demand. Nevertheless, the rest of Africa continues to enjoy strong growth. The region is expected to enjoy the fastest rate of urbanization of any region in the world, with a much younger population providing a larger workforce that will overtake either India or China in the coming decades.

We would like to see more investment in infrastructure, energy, agriculture and health. Given the strategic importance of some of these areas, this would require public-private partnership models.

Your year in oil, gas and power: what do you expect in 2017?

It looks like the oil and gas industry will continue to deal with a supply-driven downturn that has caused companies to reduce spending and stall projects until market conditions improve and energy demand growth increases.

This lack of investment could have a negative impact on oil production going forward. There will be significant deterioration in idle equipment and of course major retrenchment, including merger and acquisition events among distressed IOCs and independent oil producers primarily.

Hear more from Nyonga at Africa Oil & Power 2017, where he will join finance and investment experts, oil and gas executives and energy ministers as a panelist at the year’s elite energy gathering.