What Pre-oil Economies in Africa must Consider!

 

Katindi Sivi Njonjo shares her reflections on African considerations following the Futures Forum on Post-Oil Economy held in Baku, Azerbaijan (June 2013).

Strong symbolism is attached to oil since this raw material was the foundation of economic systems in the 20th century and continues to be the fuel of global industrialization in the 21st. It is a key to the hierarchy that exists between countries from the richest to the least advanced. An oil based economy also involves incomparable sums of money (Magrin & Vliet, undated). That is perhaps why recent discoveries of commercially viable deposits of oil in the East African region and ‘the probability of the region becoming a global player in oil production’ (United States Geological Survey [USGS], 2012) has caused a lot of excitement.

It is envisaged that this ‘black gold’ could eradicate chronic poverty due to a likely increase in exports that results in additional revenue to finance poverty alleviation (DI, 2012 July 3). It could also enhance economic growth and the creation of jobs, enable the transfer of technology, improve infrastructure and encourage the flourishing of other related industries (Karl, 2007 January). After all, Africa’s oil exporting countries, although have the least diversified economies, have among the continents highest GDP per capita (MGI, 2010 June).
 

The Oil curse and Blessing in Africa

by Ruth Aine Tindyebwa

One of the recent things that have taken Africa by storm is its discovery of oil and gas resources in the most recent past. Tanzania, Uganda, Sudan, Kenya are some of the most preferred destinations for oil exploitation on the continent at the moment. West Africa’s reserves were part of the earlier discoveries and with the example set by the states in that part of the continent paints a grim picture for us all.

And as a result phrase has been coined. Do all oil discoveries turn into the oil curse rather than blessings in Africa? This is because Africa’s history with such rich resources does not favor it. Majority of the countries with oil have turned out to be insecure, war ravaged territories because of the greed and corruption that comes with these developments.

But what does the discovery of Oil mean for East Africa, which has the newest reserves and the continent as a whole?

Read the full FFD Blog.