Tag Archives: oil in africa

The 2013 Resource Governance Index

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The 2013 Resource Governance Index (published by the Revenue Watch Institute) is out. The top performing African countries include Ghana, Liberia?, Zambia and South Africa, with partial fulfillment. The bottom performing countries are Equatorial Guinea, Zimbabwe, South Sudan, the Democratic Republic of Congo and Mozambique.

The 58 nations included in the report “produce 85 percent of the world’s petroleum, 90 percent of diamonds and 80 percent of copper.” Ghana, where we are doing some evaluation  work on extractive sector transparency initiatives, is the best performing African country on the list. Image

More here. 

And in related news, The Africa Progress Report was released last week. The report details the massive loss of revenue by African governments through mismanagement – either by commission and/or omission – of extractive resources. For instance:

The report details five deals between 2010 and 2012, which cost the Democratic Republic of the Congo over US$1.3 billion in revenues through the undervaluation of assets and sale to foreign investors. This sum represents twice the annual health and education budgets of a country with one of the worst child mortality rates in the world and seven million pupils out of school.

The DRC alone is estimated to have 24 trillion dollars worth of untapped mineral resources.

The most bizarre case of resource management in Africa is Equatorial Guinea, a coutnry that is ranked 43rd on the global per capital GNI index but ranks 136th on the Human Development Index (2011).

Below is a map showing flows related to Africa’s vast resources:

RESOURCE-MAP

Energy in East Africa

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Still on my ongoing project on commodities in Africa, I came across an interesting piece on prospecting for oil in East Africa in which an industry expert had this to say:

The success rate in this region is outstanding. To provide some context, oil and gas exploration typically has a success rate just 10-20%. That’s terrible when you think about. It can cost $50 million to sink an offshore well, and the chance of making a financial return could be as low as one in ten.

But East Coast African energy exploration stands out from the crowd because in all but a few cases they hit oil or gas. To be exact — the success rate has been 87%. A strike rate of close to 9 out of 10 is almost unheard of.

Kenya, South Sudan and Uganda have commercially viable oil reserves. Tanzania has gas and, together with Kenya, has stepped up offshore prospecting in the Indian ocean.

And it is not just foreign MNCs that are in on the game. Locals, in collaboration with foreign investors, are also getting a piece of the energy bonanza in East Africa. Business Daily, a Kenyan paper, recently profiled one George Kariithi, a businessman who started off as a marketing executive and has since built multiple companies in the wider region. His latest investment is in Kenya’s emerging coal sector.

Omar Bongo is dead

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Omar Bongo, the president of Gabon and Africa’s longest serving ruler has died. Mr. Bongo had intestinal cancer and had gone to Barcelona, Spain for treatment. He took over power in 1967.

The African state of 1.5 million has considerable oil reserves, timber and manganese deposits and enjoys a per capita income of a middle income country – at US $14,400 according to the CIA Factbook. But due to a high level of income inequality, hundreds of thousands of Gabonese still live in poverty. Gabon was ranked 116th on the 2007/2008 UNDP Human Development Report. Like most mineral-rich African countries, corruption is endemic in Gabon. For instance, earlier this year anti-corruption activists accused president Bongo of buying French property with proceeds from corruption.

According to the constitution of Gabon, the head of the country’s senate will be the interim president until elections are held within 90 days.

equatorial guinea, where does the money go?

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Equatorial Guinea is the third largest oil producer in Africa, right after Nigeria and Angola. Equatorial Guinea also has just over half a million people. It therefore defies logic that this country should still have many of its people living in squalid conditions. This country ranks 121st out of 177 on the UN Human development Index, even though it has a per capita income (PPP)  of 50,200 (CIA Factbook) – only second to Luxembourg in the entire world! Why are many Equatorial Guineans still dirt poor, dying from treatable illnesses and ignorant? Where is Teodore Obiang Nguema Mbasogo taking all the oil money?

This is a shame to the continent and to Obiang and his cronies. It is high time African leaders became their own keepers and fostered a culture of intra-continental competition rather than their old-school collusion to steal all they can from the poor and dying, as is happening in this fabulously wealthy country. This is especially important now that the EU and the US – because of competition for resources with China – have decided, like the latter, to turn a blind eye to gross injustices like this one.

With a total population smaller than those of most African capitals, and with all the oil money, how hard can it be to keep track of everyone and ensure that all Equatorial Guineans are well fed, educated and healthy?