Energy may be Africa’s trump card with EU

Minister of State for Trade and Development Joe Costello was one of a number of EU politicians and African heads of states gathered in Brussels yesterday for the first day of the two-day EU-Africa summit.

Titled People, Prosperity and Peace , the summit was the fourth such meeting since 2000, reflecting an effort to recast the EU-African relationship, for so long rooted in imperialism, to one of positive engagement.

In reality, the relationship between Europe and its near neighbour remains highly complex. Over the last few months, a number of African countries have faced stark criticism from their EU donors over their policies on homosexuality. Three days before the summit, Zimbabwean president Robert Mugabe pulled out after his wife was denied a visa. Mugabe's call for the African Union to boycott the summit was largely ignored, but his defiance does indicate a shift in attitude by some African leaders towards the EU in recent years.

As Europe has been mired in recession, Africa has been one of the economic growth stories of the last five years, with average GDP growth across the continent running at an estimated 5 per cent annually, despite the persistence of high poverty levels.

Investment
Foreign direct investment into the continent has increased despite the overall global environment of economic retrenchment, as investors are tempted by a higher rate of return than in almost any other region. Much of this investment has come from Asia and the US, with European companies and investors facing increasing competition for investment opportunities in the continent.

Africa, in other words, has some reasons to feel confident when it meets EU leaders and officials this week in Brussels.

While the continent continues to be heavily dependent on European countries for development aid and defence, the ongoing crisis over Ukraine has highlighted one of its trump cards in dealing with the EU – energy. The Ukraine crisis has forced the EU to reassess its energy supply system, as it tries to move away from dependence on Russia, which supplies about 30 per cent of the EU's gas.

The possibility of sourcing more energy from Africa has already been mooted by EU leaders. Africa currently produces more than 12 per cent of the world's oil. Four African countries – Algeria, Angola, Nigeria and Libya – are members of Opec, the Organisation for Petroleum Exporting Countries, which manages oil supply from the world's biggest oil producers.

Furthermore, Africa has significant pockets of oil and gas reserves dotted about the continent, which international companies, such as Irish company Tullow Oil, are busy tapping.

The EU sources about 15 per cent of its gas imports from Algeria, with most going to Spain and Italy, while Libya has traditionally supplied up to 11 per cent of the bloc's oil imports.

In reality, increasing those levels could be difficult, in light of the ongoing political and security instability in the region. While countries such as Libya and Egypt have large natural reserves, production has been hampered since the Arab Spring. A terrorist attack on a natural gas plant in Algeria last year highlighted the issues around energy security, leaving many wondering if Africa can ever become a viable alternative to Russian energy.

Energy supply
While energy supply and security have emerged on the radar of European leaders in recent weeks, other issues include the ongoing security situation in the Central African Republic, and stalled trade talks. The EU's an nouncement on Tuesday that it will send troops to the country to support the thousands of French and African troops on the ground , following months of delays, has pushed the issue centre-stage.In contrast, little progress is expected on the ongoing economic partnership agreements between the EU and former colonies in Africa, most of which date back to 2007, but which have yet to be ratified. As Europe embraces a "trade " rather than "aid " ethos towards Africa, progress on these agreements is crucial.

The other issue to the forefront will be immigration. Europe has been struggling to absorb the waves of people leaving African countries, particularly in the north and north east of the continent, and has pledged to put forward a proposal for dealing with illegal immigration by the EU summit in June. The issue has become a highly politicised one, likely to feature in the upcoming European elections.

Establishing a joint policy on tackling illegal immigration could be one of the most important outcomes to emerge from this week’s summit.