Africa’s oil and gas, a curse for its people?

Africa’s oil and gas, a curse for its people?

Logic has it that joy and happiness should grip every community all over the world whenever oil and gas is discovered in their land, because they see this as a sign of future prosperity and social relief. But in Africa, it is the opposite: oil and gas discovery is said to bring nothing but suffering and pain for its people.

On paper, the recent oil and gas discoveries in Namibia (nearly12 billion barrels), northern Mozambique (Rovuma Basin), Uganda (near Albert Lake), Sao Tome and Principe and Ghana, among others, should bring prosperity and social relief to these countries’ impoverished communities, most especially for those living at the locations where oil and gas are found.

However, in a continent housing over two-thirds of the world’s most brutal, corrupt and dictatorial regimes, the discoveries can only inflict a new curse for ordinary citizens who may experience more trouble, oppression and suffering, as political elites and their corrupt business allies enrich themselves by mismanaging oil and gas revenues through nepotistic practices.

Furthermore, there is another set of group – the multinational oil companies – which, like vultures overjoyed by the death of an elephant, would land aggressively to exploit these resources, expecting absolute higher returns of their investments, at all costs – even if it means damaging the environment and putting people’s lives at risk.

The people of Nigeria versus Shell is a perfect study case.

To paraphrase the Brookings Institution, oil discoveries have the potential to dramatically increase governments’ revenue and bring substantial blessings to ordinary people of Africa if revenues are well invested in rebuilding dilapidated infrastructure, promoting agricultural transformation, and also investing in human capital.

Unfortunately, the Institution regrets that in many African countries, natural resource revenues usually create conflicts, instability and underdevelopment. “In short, there is a risk of the natural resource curse,” the Washington DC-based think-tank noted.

Statistics show that Africa carries over 10% of the world’s proven oil reserves. But, research shows that the populations living in Africa’s oil and gas producing countries that their living standards have not changed much, or have stayed the same in the last 40 years or so. Africa is home to over 1.1 billion people, nearly 80 million of whom live in extreme poverty, without electricity, running water, and adequate housing and sanitation. Most of these countries’ unemployment rates are also among the highest in Africa.

Apart from Ghana and Nigeria (Africa’s biggest oil producer) which exercise some sort of ‘democracy’, Angola, Equatorial Guinea, Gabon, Congo Brazzaville, Algeria, Libya and Sudan have the most repressive, corrupt and brutal governments in Africa and their populations are also among the most destitute in Africa.

Before the war that toppled long-time dictator Muammar Gaddafi, Libya used to inject over 1.6 million barrels a day into the world market – almost 2% of the global output. But still, many Libyans, contrary to Gaddafi’s claims that his people were happy nnd fulfilled, it was found that later that mnay Libyans lived in dire poverty and high unemployment.

“Although Africa has long been known to be rich in oil, extracting it had not seemed worth the effort and risk until recently,” John Ghazvinian wrote in his book Untapped: The Scramble for Africa’s Oil.

“But with the price of Middle Eastern crude skyrocketing, and advancing technology making reserves easier to tap, the region has become the scene of a competition between major powers that recalls the 19th-century scramble for colonisation,” according to the book.

*Photo by Inform Africa. An offshore oil rig in Gabon, Central Africa.

 

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