Oil - Strength in numbers
Njei Moses Timah writes:
Most African countries' petroleum revenue has simply disappeared.
He continues:
It is my opinion that Kufuor's elation about this oil find is a little bit naive. As a seasoned politician and African Union (AU) chairman, he is better placed to know that oil and other minerals have contributed more to African backwardness than the want of resources.
These resources have fanned civil wars in Nigeria, the Democratic Republic of the Congo, the Republic of Congo, Angola, Liberia, Sierra Leone and Chad. Coups and mercenary incursions have occurred in almost all resource-rich African countries. The corruption and graft that follows the discovery of these resources has destroyed the social fabric of many of these so-called oil or mineral producing African countries. Bad governance, weak and inefficient institutions, poor accountability, crime and parasitic state employees (now a hallmark of these countries) have all contributed to chase Africa's best brains out of the continent. There is no doubt that this brain drain is negatively affecting the competence and the commitment of those left behind to negotiate trade terms with foreign partners and administer these countries.
Timah proposes that the African Union band together to negotiate oil contracts and to stand firm against the predatory exploitation and interference that is sure to come.
The AU should be seriously thinking about how they can negotiate the management of African resources with external powers. The current way of doing things will never move Africa out of backwardness. Leaders of most African countries are usually manipulated, cajoled, bullied or simply bribed to sign unfavorable contracts with foreign partners. Those that have resisted these pressures in the past have simply been "physically removed" or their governments subverted in one form or another.
Oil is the most important commodity in the world today and those that need that commodity most are very powerful nations. China and the United States are not going to fold their arms and allow Ghana to quietly enjoy the proceeds of the over $40 billion worth of oil (less exploration and production costs) that has been discovered. It has never been so in other oil producing African countries. The AU should understand this and accept the reality that many African countries can neither protect their resources from external economic predators nor negotiate fair trading terms with them.
The comments on his article are interesting as well
Labels: African Union, economy, Ghana, Ghana oil, Gulf of Guinea, oil
posted by Crossed Crocodiles at
6/20/2007 10:11:00 PM
2 Comments:
businessmen are already spending revenues they've yet to see in wednesday's ghanaian chronicle
Ghanaians express fear over oil discovery
i'm currently reading john ghazvinian's book "untapped: the scramble for africa's oil", and it's pretty good. other than the point that it was written before the official announcement of AFRICOM, it's very informative. the author spent six months travelling through twelve sub-saharan oil producers & he's gained a lot of insight & knowledge along the way and, from what i've read of the first third of the book, weaves it into a compelling & useful account.
it's very pertinent
That oil wealth could be a curse seems counterintuitive. When an oil bonanza is discovered in a struggling Afican country, the instinctive assumption is that it can only be a good thing; that it will result in a rapid improvement in the lives of the people; that suddenly there will be money for hospitals and vaccines and schools and roads [refer to the stmts in the chronicle article linked above]; and, even more than that, everyone will be rich. To the contrary, however, studies suggest that real GDP and population's standard of living nearly always decline where oil is discovered. Between 1970 and 1993, for example, countries without oil saw their economies grow four times faster than those of countries with oil.
he uses gabon as "a textbook case of [dutch] disease ... one so iconic and so faithful to the prescribed pattern that it might as well have been created by economists in a test tube."
an online excerpt of his search for locally-grown food staples there is available in this series at slate
basically, and you've already pointed it out, an influx of petrol dollars (paid in non-local currencies like USD, euros, or pounds) inflates the value of the domestic currency, making it cheaper to buy imports, which then put farmers out of work & renders the nation dependent on imported food & commodities for survival.
once the oil deposits are exploited -- which will occur at increasing rates as global supplies decline amidst exponentially rising demand -- the nation is left hollowed out, incapable of sustaining life for those still remaining.
i've also read that most of the oil contracts in africa are those PSAs -- production sharing agreements -- which are written on terms highly favorable to maximizing immediate profits for the oil majors at the expense of the landowner, which typically doesn't begin to realize any substantial revenues for a number of years after pumping has started. i haven't seen whether PSA's are involved in this case yet. do you know?
as for a role for the AU in defending national interests in oil & other extractables, how independent of foreign manipulation is this organization? it's my understanding that the west was very involved in getting the AU to accept the role of interventions into sovereign territories, something it wouldn't do as the OAU. this helps legitimize those foreign actors who benefit from resource wars. i'm not sure that the AU would necessarily be able to operate in the best interests here, though i'd love to be proved wrong.
By
Anonymous, at 12:39 AM, June 21, 2007
b real,
I don't have much faith in the AU, and the issue of interventions is particularly worrisome. ECOWAS is another possibility. I think it is a bit more dynamic than the AU, though I have doubts about it as well. Like you, I'd love to be proved wrong.
I've got a copy of Untapped, but I have not read it yet. I've hardly had a chance to look at the cover.
I was somewhat relieved to see that people were expressing worry or dismay about the oil find in the Chronicle, as well as the callers to Joy FM. Maybe an Oil Revenue Commission might work. I'd hate to see the money in the hands of the politicians or the political parties. Since ultimately they will be deciding this, that may be a vain hope. Ghana is fairly lucky in having 2 reasonably strong political parties, with each wanting to prevent the other from hogging the benefits. But I'm sure there will be some creativity devoted to finding workarounds to the checks and balances that are there.
By
Crossed Crocodiles, at 9:09 PM, June 21, 2007
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