News / Africa

Can New Oil States in Africa Avoid the 'Resource Curse?'

An unidentified Shell worker pictured aboard the Bonga offshore oil vessel off the coast of Nigeria, Dec. 26, 2011.An unidentified Shell worker pictured aboard the Bonga offshore oil vessel off the coast of Nigeria, Dec. 26, 2011.
x
An unidentified Shell worker pictured aboard the Bonga offshore oil vessel off the coast of Nigeria, Dec. 26, 2011.
An unidentified Shell worker pictured aboard the Bonga offshore oil vessel off the coast of Nigeria, Dec. 26, 2011.
Gabe Joselow
NAIROBI - When Equatorial Guinea discovered oil in the 1990s, the country was transformed forever from a sleepy former Spanish colony into an oil state.

The country's Gross Domestic Product growth was a staggering 71 percent in 1997, according to the International Monetary Fund, almost entirely on the back of oil revenues.  By 2009, the country was earning more than $8 billion a year from the commodity.

But the wealth has only further enriched and entrenched Equatorial Guinea's authoritarian president Teodoro Obiang Nguema Mbasogo, who's held power for more than 30 years, while doing little to improve the lives of 685,000 citizens.

Equatorial Guinea's oil resources
Equatorial Guinea's oil resources
The country ranked 136 out of 187 countries last year on the United Nations Human Development Index.  Other oil-producing countries, including Angola, Sudan and the Democratic Republic of Congo,  rank even lower.

The head of the Africa Program at Chatham House in London, Alex Vines, says citizens lose out when African governments misuse oil revenues for consumption, rather than development.

"Prestige buildings, luxury goods, these have been really the kind of caricature of how countries have used this,” he says.  “Gabon, for example, had the highest consumption of champagne in the world for a while, all funded by oil."

Managing expectations

A growing gap between rich and poor, rampant corruption and the tightening grip of authoritarian leadership are all symptoms of the so-called "resource curse," when a discovery that should benefit the population ends up doing more harm than good.

"The thing about oil and minerals is that very quickly, huge, fast flows of money come from these natural resources and the ability to manage that in a way that benefits citizens isn't always in place," says Brendan O'Donnell of the natural resources monitoring group Global Witness.

New oil finds in Kenya and the Ivory Coast and natural gas off the coast of Tanzania have generated a lot of excitement in recent months, with countries touting the discoveries as a point of pride.

“I think it's a bit like in the old days when each country wanted its own airlines,” says Vines of Chatham House.  “Certainly reading some of the Kenyan press, some of the euphoria about Kenya now having oil was a bit worrying I think.”

Even countries that are relatively new to the oil game have shown some disconcerting behavior.

Uganda discovered oil in 2006 and is due to begin production in three to five years.  But a lack of transparency in oil contracts is raising concerns the government is not acting in the people's best interests.

"There was a lot of talk and expectations last time, and the information available on the oil sector is not enough,” says Lawrence Bategeka, senior researcher at the Economic Policy Research Center in Kampala.  “Not enough information is being released to the public."

Uganda's parliament has been seeking to force the government to disclose the details of oil contracts signed with international companies.

Bategeka says citizens are unhappy with the government's reluctance to cooperate.

"But of course government has an explanation,” he says.  “When asked 'Why conceal information?'  They allude to security concerns, but the public out there does not accept that as a good explanation."

Window of opportunity

Discovering oil is not like winning the lottery.  The industry is sensitive to the whims of the international markets and demand from Europe, Asia and North America.

Chief economist and Vice President of the African Development Bank Mthuli Ncube says with current oil prices relatively high, oil-producing countries in Africa have done well in recent years, and recovered from losses suffered during the global financial crisis three years ago.

“But going forward,” he says, “with the softening of oil price, maybe even the slowdown of economic growth in China, that obviously could affect the growth prospects of the countries.”

In Angola, where the oil industry accounts for 90 percent of economic output, the government accumulated some $9 billion in contractor arrears during the peak of the financial crisis in 2009.

Ncube's first word of advice is to diversify.

He says economies must not become reliant on one commodity, noting progress in Nigeria, Africa's biggest oil exporter.

“[Nigeria's] been diversifying slowly but surely,” he says. “In the IT sector, services sector and agricultural sector, they're competing with the oil sector in terms of size and contribution.”

O'Donnell with Global Witness says resources management safeguards are not just about promoting social benefits, but also about making the most of an economic opportunity.

"These resources have a lifespan, they will run out at some point,” he says.  “If your country misses the opportunity of benefiting from the resources, you can't get that back.  You've lost that moment."

You May Like

US Border Patrol Union Accused of Taking Sides on Immigration

Report alleges agents leaking info to immigration opponents, appearing at their private events; Center for Immigration Studies director defends agents' actions More

Video Blind Somali Journalist Defies Odds in Mogadishu

Reporting from Somali capital for past decade, Abdifatah Hassan Kalgacal has been working at one of Mogadishu's leading radio stations covering parliament More

Video Rights Monitor: Hate Groups' Use of Internet to Inflame, Recruit Growing

Wiesenthal Center's Abraham Cooper says extremists have become skilled at celebrating violence, ideology on Web More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hate Groups Spread Influence Via Interneti
X
Mike O'Sullivan
June 30, 2015 8:20 PM
Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Syrians Flee IS Advance in Hasaka

The Syrian government said Monday it has taken back one of several districts in Hasaka overrun by Islamic State militants. But continued fighting elsewhere in the northern city has forced thousands of civilians from their homes. In this report narrated by Bill Rodgers, VOA Kurdish Service reporter Zana Omer describes the scene in Amouda, where some of the displaced are taking refuge.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video S. Korea Christians Protest Gay Rights Festival

The U.S. Supreme Court decision mandating marriage equality nationwide has energized gay rights supporters around the world. Gay rights remain a highly contentious issue in a key U.S. ally, South Korea, where police did a deft job Sunday of preventing potential clashes between Christian protesters and gay activists. Kurt Achin reports from Seoul.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.
Video

Video In Syrian Crisis, Social Media Offer Small Comforts

Za’atari, a makeshift city in Jordan, may be the only Syrian refugee camp to tweet its activities, in an effort to keep donors motivated as the war in Syria intensifies and the humanitarian crisis deepens. Inside the camp, families say mobile phone applications help hold together families that are physically torn apart. VOA’s Heather Murdock reports.

VOA Blogs