As crude oil prices continue to rise on the world market, many African oil-importing countries are starting to think more seriously about ways to lessen their dependence on the fuel. The worry is that continued high spending on imported oil and other petroleum products may erode the economic growth they have garnered in recent years. This makes alternative forms of energy more desirable.
Crude oil prices jumped from less than US$40 a barrel in 2004 to $80 by 2018. With expectations of increasing global demand, especially from China, experts predict that prices will continue to rise over the next few years. This bodes well for net exporting countries in the continent and COMESA is a net exporter of crude oil due to the combined effect of Libya, Egypt and Sudan. For net importer countries, however, higher world oil prices pose quite different challenges. Since countries must spend more for oil imports, they have less foreign exchange left for other essential imports. Businesses that rely heavily on energy and transportation are hit especially hard, making production more expensive and possibly leading to cutbacks and job losses. Higher energy and transport costs are also usually passed along to consumers. The prices of many other goods and services are also pushed upwards, affecting the poor most severely.