News / Africa

Africa's New Oil Producers Get Tips on Avoiding Curse

An oil exploration tower in Tonya on the shore of Lake Albert, April 25, 2008 (file photo)
An oil exploration tower in Tonya on the shore of Lake Albert, April 25, 2008 (file photo)
Nico Colombant

While more and more countries join the African club of oil-producing nations, U.S.-based researchers are trying to help them avoid what they call the oil curse. The saying refers to countries suffering from increased violence, poverty, authoritarianism, pollution and corruption along with their oil riches.

A recent paper by the Washington-based Center for Global Development is called "Oil for Uganda or Ugandans?" The subtitle is "Can Cash Transfers Prevent the Resource Curse?"

The idea that is being proposed is for Uganda's government to distribute future oil revenue through direct cash transfers to Ugandans, money which would then be taxed.

Oil revenue accountability

The authors of the report say they believe this would make government spending more accountable, and less prone to corruption and deteriorating governance. They also are proposing directing oil revenues toward an education fund for Uganda's youth.

One of the authors is former World Bank official Alan Gelb.

"I think that the paper has the potential to stir debate in Uganda, first of all on the question of accountability. How should Uganda, or Ugandans, what should they expect from government as the government starts to use this money?" asked Gelb. "After all, in most countries oil revenue is the property of the nation or the people of the nation, and the government is using it on their behalf."

So far, Ugandan government officials have pointed in another direction, which is to spend oil revenue on infrastructure projects, an area which Gelb says is particularly prone to corruption and political entrenchment and patronage.

Follow the dollar

Whatever options are eventually chosen, Gelb is calling on Ugandan journalists, civil society activists and lawmakers to sharpen their understanding of oil related transactions so they can track money and apply informed pressure.

"Look for key points where one can ask, demand and expect transparency and open information. One is on the total receipts from the oil industry. Secondly, one would like a very clear picture on how these are being used and what the results have been, how contracts have been tendered, those kinds of things," he said.

Uganda's government is now saying the country may hold deposits of up to 6 billion barrels of oil, with production expected to begin next year from the Lake Albert Basin.

Another U.S.-based researcher, Ian Gary, recently went to Uganda to share lessons learned from new oil producer Ghana, which he has been studying closely as part of his work with the group Oxfam America.  

Gary has been advocating for an open exploration licensing process. Licenses are paid for by companies before they are allowed to begin exploration.

"There have been a lot of issues coming up in Ghana about whether politicians may be behind some of the small and little-known companies that appear on some of these oil licenses," said Gary.

Environmental, budgetary best practices

Another disappointment for Gary came when Ghana recently allocated about $300 million in excess revenues from oil production into the current budget rather than directing the money to newly established savings and stabilization funds. The funds are meant to finance development projects, as well as protect Ghanaians from the volatility of oil prices.

"What we are seeing right now is a little bit of lack of discipline on the part of the government and early deviation from the law, so that is a concern on our part, that early on, the government is deviating from the terms of the law," said Gary. "Obviously the budget was prepared before the revenue management act was put in place, but it is concerning that in this transition period the government has not followed the letter of the law."

Ghana started exporting oil this year, less than four years after a major offshore discovery was made. Gary says legal and oversight frameworks have not been able to keep pace with the new challenges Ghana faces, including establishing better environmental protections.

With neighboring countries Ivory Coast, Liberia and Sierra Leone also poised to increase oil exploration in their waters, Gary says there is no shortage of lessons to be learned on best practices to avoid the so-called oil curse.

You May Like

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More