Ukraine-Russia conflict pounding ailing African economies

Mineral Resources and Energy Minister, Gwede Mantashe, says the current conflict between Ukraine and Russia poses a danger to ailing African economies.

The Minister was speaking at the Africa Energy Indaba on Tuesday.

“The present situation regarding Ukraine, that pits the Russian Federation against the North Atlantic Treaty Organisation [NATO] and its allies, threatens our already battered economies. It further postpones our reach for the Africa We Want,” Mantashe said.

The conflict between the two countries has reached its sixth day after the Russian military invaded Ukraine last week in a move which received widespread criticism and sanctions against the country.

Russia accounts for some 10% of crude oil supply globally and sanctions have severely disrupted exports subsequently leading to higher oil prices.

Mantashe said the violent conflict and supply disruptions have widespread consequences for South Africa.

“When the price of crude [oil] moved and reach US$100 a barrel, we didn’t read that in the research, we met it at the pump because we don’t have our own oil. We import it. Then when it is shooting up because of conflict in Ukraine, we pay for the price in the pump.

“[The] rising price of crude that translates in severely high fuel prices for our individual countries. The relief on fuel taxes, announced by our government in last week’s budget, is already corroded by the petrol costs,” he said.

The Minister said the conflict and other uncertainties in the “global supply and security of petroleum” must spur African countries on to own oil refinery infrastructure.

“Such capacity guarantees national security. For us, this is further hastened by global, multi-national companies that have signaled their intention to close refineries and import petroleum products into our country. Many other African countries are facing similar realities,” he said.

Mantashe encouraged African countries to “foster stronger ties” on oil and gas trade.

“Already, South Africa imports the bulk of its crude requirements from African producers, including Nigeria and Angola. There is ample opportunity for a massive expansion of gas trade, especially from the Gulf of Guinea and the broader West Coast of Africa, where we have many producers and some already exporting.

“We collaborate closely with the African Petroleum Producers Organisation and urge more meaningful engagement with this continental body,” Mantashe said.

↯↯↯Read More On The Topic On TDPel Media ↯↯↯