West Africa needs a $3 billion regional settlement facility, harmonisedregulations and deeper cross-border integration to unlock a potential $3 trillion cumulative energy market by 2035, the Chairman of RHG Advisory, Suleiman Yahyah, has said.
Yahyah, who spoke on the second day of the West African Refined Fuel Market (WARFM) conference in Abuja on Wednesday , said the region could no longer afford to approach energy development as a collection of individual national projects, arguing that a systems-based approach was needed to rapidly correct existing market imbalances.
The conference was organised by the West African Regulators Forum (WARF), the Nigerian Midstream and Downstream Petroleum Regulatory Authority(NMDPRA) and S&P Global Energy.
According to Yahyah, West Africa has reached a critical point in the evolution of its energy market, driven by growing investments in refining, changing global market dynamics and the need to address widespread energy poverty.
He stated that thinking only in terms of individual projects would take many years to transform the region’s energy market, while a systems approach could accelerate the process.
Yahyah noted that Africa accounts for about 20 per cent of the global population but produces only 7.5 per cent of global hydrocarbons, while more than 600 million people remain in energy poverty.
The situation, he added, was also acute in West Africa, where he estimated that about 45 per cent of the population was in energy poverty, with more than 75 per cent lacking access to clean power.
To change the situation, Yahyah proposed the development of an integrated regional energy market in which individual countries would retain regulatory responsibilities while transactions increasingly took place across national borders.
“So, essentially, we regulate nationally and transact regionally,” he suggested.
He explained that this would require countries to harmonise their regulatory frameworks to enable operators licensed in one West African country to operate and trade in another without having to navigate fundamentally different market rules.
The proposed framework, he said, should include common product specifications, shared data standards, modern energy contracts, interconnected infrastructure and a regional dispute resolution mechanism.
“If we do that, it is possible that by 2035, we can have a market that is $3 trillion cumulative,” he said.
Yahyah identified liquidity as one of the most critical requirements for the proposed market, calling for central banks, the African Finance Corporation (AFC), the African Development Bank (AfDB), sovereign wealth funds and the African Energy Bank (AEB) to collaborate on establishing a regional settlement facility.
“We estimate that this settlement facility will be in the region of $3 billion, but anchored in Naira,” he said.
He suggested that the system could build on the existing Pan-African Payment and Settlement System rather than creating an entirely new platform, allowing transactions to be settled across the region while providing a mechanism for conversion into dollars.
He also said the eventual system would need to accommodate the proposed Eco currency as the monetary integration process evolves.
“Without liquidity, we can’t create an African or West African energy market that is going to be efficient,” Yahyah said.
Beyond finance, he identified talent as another critical component of the regional market, stressing that West Africa needed skilled professionals capable of regulating, trading, analysing and developing the legal and institutional frameworks required for a sophisticated energy market. “Talent is infrastructure,” he pointed out.
Yahyah also advocated strategic partnerships with established global market institutions, arguing that African countries should not attempt to recreate methodologies, technologies and market infrastructure that already exist internationally.
“We are not going to reinvent the wheel,” he said, urging partnerships with institutions such as S&P Global, Argus and Bloomberg.
He said such partnerships should nevertheless be structured around local content requirements and designed to ensure that international players operate as participants in an integrated regional market rather than as isolated entities.
Yahyah further proposed that countries outside West Africa, including Angola and Algeria, should initially participate as observers in the West African Regulators Forum, while the region conducts biannual assessments of its progress against agreed targets.
He said the success of the proposed market should ultimately not be measured only by the value of transactions or the number of projects completed, but by its impact on ordinary people.
He said the key indicators should include access to energy, affordability, reliability, transition to clean cooking, productive use of energy in agriculture and industry, poverty reduction and improvement in regional welfare.
He also called for greater participation by African investors, saying the region could combine local capital with international expertise through joint ventures and partnerships. “We have to do joint ventures. We have to do partnerships,” he said.
Yahyah argued that a more integrated regional market would create opportunities for young Africans and generate jobs and wealth, but stressed that regulatory harmonisation, funding and human capital would be essential to achieving the vision.
Emmanuel Addeh
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