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

Turkey: No Ransom Paid for Release of Hostages Held by IS Militants

President Erdogan hails release of hostages as diplomatic success but declines to be drawn on whether their release freed Ankara's hand to take more active stance against insurgents More

Audio Sierra Leone Ends Ebola Lockdown

Health ministry says it has reached 75 percent of its target of visiting 1.5 million homes to locate infected, educate population about virus More

US Pivot to Asia Demands Delicate Balancing Act

As tumult in Middle East distracts Obama administration, efforts to shift American focus eastward appear threatened 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.
Natural Gas Export Plan Divides Maryland Towni
X
Deborah Block
September 21, 2014 2:12 PM
A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Alibaba Shares Soar in First Day of Trading

China's biggest online retailer hit the market Friday -- with its share price soaring on the New York Stock Exchange. The shares were priced at $68, but trading stalled at the opening, as sellers held onto their shares, waiting for buyers to bid up the price. More on the world's biggest initial public offering from VOA’s Bernard Shusman in New York.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid