Essay on Investment in Connectivity

Events of the past couple of years have made clear that modern international trade, especially in energy, depends on a handful of choke points: the Suez Canal, the Bab el-Mandeb Strait, and the Strait of Hormuz. Attacks that block or disrupt these passages drive up the time and cost of energy shipments by 30 to 40%, forcing vessels to reroute around the whole of Africa. Every country that relies on these routes is exposed to systemic vulnerability.
It is worth noting that Africa holds substantial undeveloped reserves – 7.6% of global oil and 8.9% of global gas (BP World Energy Survey, 2023) – along with resources that, for various reasons, remain unexplored. The continent’s geographic position is also uniquely advantageous in relation to key markets (Asia-Pacific, Europe, and others). Yet despite this abundance of natural resources, Africa’s infrastructure potential remains largely untapped. According to published data, African refining capacity amounts to just 3.3% of the global total (ASB, OPEC, 2023). As a result, even oil-producing countries such as Nigeria are forced to import refined products, losing added value.
In our view, as global logistics patterns shift, the countries that represent the global majority need a joint strategy to reduce their vulnerability and improve their economic performance.
We propose creating an African Energy and Logistics Corridor (hereinafter AELC) – a platform for multilateral cooperation aimed at coordinating development and integrating transport, energy, and digital infrastructure. The AELC would connect African resource centers with end consumers in Europe and Asia through a network of interchangeable and complementary supply chains. In our view, this would turn the region’s logistical risks and missed opportunities into strategic advantages.
Major oil and gas companies – both international majors and national oil companies – are already investing in high-complexity assets. ENI is implementing pioneering floating LNG projects in Mozambique (Coral South, Coral North). China’s CNOOC is pursuing deepwater projects in Nigeria (Akpo, Egina). Because they are offshore, these projects are less exposed to onshore risks such as regional instability and conflict. They showcase cutting-edge industry technology and capital commitments in the billions of dollars. Crucially, however, each operates in isolation, as a standalone company asset.
Under the AELC framework, we propose linking these high-technology assets into a single network: a unified system of routes connecting not only such projects and fields to end markets but also, just as importantly, Africa’s interior regions to one another.
As a starting point, the transnational project would bring together Russia, Africa, Asia, and the Middle East.
African oil- and gas-producing countries would gain guaranteed export routes. Their availability and security ensured through diversification would in turn incentivize the construction of refining capacity. Transit countries such as Kenya and South Africa, serving as logistics hubs, would attract additional investment in infrastructure (ports, warehousing, and the like). South Africa, with its network of well-developed ports around the Cape of Good Hope, could become a key node on an alternative route.
China and India are active consumers of African oil and gas, currently accounting for over 37% of petroleum product exports from the continent (ASB, OPEC, 2023). They therefore have a direct interest in stable supplies that underpin their energy security.
The UAE, with its extensive experience in port infrastructure management, could act not only as an active partner but also as a potential investor.
The AELC should also incorporate a backup northern dimension: the rapidly developing Northern Sea Route could offer an effective option for shipping cargo from West Africa to Asia. This would close a logistics ring, guaranteeing a resilient supply system out of Africa. Russian oil and gas companies, moreover, possess unique experience operating under the harshest conditions—permafrost and Arctic deepwater shelf. Russia, in our view, is well positioned to offer advanced technology and services for developing AELC infrastructure. This depth of expertise is a valuable asset in building a resilient energy security system.
In our view, building the AELC should proceed in stages:
1. Creating a unified infrastructure map that records active, planned, and suspended oil and gas projects across Africa, along with refining capacity, pipelines, and port infrastructure – noting strengths, weaknesses, and potential for expansion. This may require establishing an AELC secretariat under the auspices of the African Union and the participating countries.
2. Establishing transparent operating rules for the AELC including simplified customs procedures, common standards for infrastructure (for example, technical specifications), and a workable cargo insurance system.
3. At this stage, pilot projects could be launched to build connected infrastructure through public-private partnerships. Companies such as ENI and CNOOC, with their substantial experience and capital, could serve as key investors.
In our view, a functioning AELC through route optimization, fewer delivery disruptions, and harmonized procedures would lower logistics costs on African exports, raise the competitiveness of regional resources, and create jobs in construction and logistics. The cornerstone effect should be stronger energy security and logistics sovereignty for the participating countries. Value chains built within Africa could further catalyze digitalization and the growth of small and medium-sized service-sector businesses. Current logistics crises are already costing the world enormous sums. Building the AELC admittedly involves geopolitical and bureaucratic risks, yet it could also serve as an answer to the challenges we face today.
References:
1) ASB, OPEC, 2023 https://publications.opec.org/asb.
2) World Energy Survey, BP, 2023 https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-ou....