finweek

BOOK EXCERPT: 'Big Barrels: African Oil and Gas and the Quest for Prosperity'

'Big Barrels: African Oil and Gas and the Quest for Prosperity' highlights the success stories of the African continent’s Petroleum sector today.
'Big Barrels: African Oil and Gas and the Quest for Prosperity' highlights the success stories of the African continent’s Petroleum sector today.

For decades, Africa has been branded as a continent perpetually suffering from corruption, abject poverty, poor governance, military conflict, and tragedy.
 
The politics and economies of the 54 nations that compose the landmass have often been criticized both within Africa and across the wider world, seen as inherently unstable and beyond recovery. 

Certain problems are obviously undeniable. The combination of ethnic divisions, the scars of colonial heritage, a lack of adequate institutional strength, insufficient resources to feed populations and an inability to compete in an increasingly globalized world market has kept parts of Africa in darkness.

But an exclusive focus on these issues has contributed to the prevailing narrative of the failed continent, an idea that contrasts sharply with many on-the-ground realities. Ultimately, this has diverted attention away from some of the more manageable issues facing African nations.

The international community has ostensibly made efforts to help the continent overcome some of these obstacles, with limited success.

Over the years, the shortcomings of the prevailing aid paradigm have become more and more apparent, and it seems clear that aid-dependent countries are less capable now of rising out of poverty than they were 30 years ago.

Initiatives such as the United Nations’ Millennium Development Goals (MDGs) have defined targets for the improvement of the lives of many Africans, but these only go so far in helping to fight poverty, disease, hunger, and illiteracy.

Perhaps the biggest barrier to the success of these endeavours is the fact that they are generally designed from afar, by donor nations and institutions with a limited understanding of both the needs of the recipient countries and their ways of operating.

After all, many African nations possess some of the world’s largest concentrations of natural resources within their borders and maritime boundaries.

These resources are extracted and used to power the world’s biggest economies. Ironically though, it seems that the more resources a country has, the worse their situation tends to be.

Today, oil and gas industries represent the greater part of many African economies, yet they appear to contribute little to broader societal development.

The oil price shocks of the 1980s in Nigeria, Angola’s decade of hyperinflation, the civil wars in both Congos, and the devastation of Libya’s economy following the collapse of the Gaddafi regime, have all shown the calamitous results of excessive dependence on natural resources. In these and many other cases this reality is undeniable.

The value we place on natural resources has commonly formed the root of tensions across the continent, as in many other parts of the world.

The outside perception seems to be that African nations are intrinsically unable to effectively manage their natural resources and employ them for the betterment of their citizens’ lives.

Some analysts suggest that governments should stop developing their natural resources entirely and focus only on other sectors such as tourism, agriculture and fishing, suggestions which disregard the transformative role energy can play in a nation. Is this really where Africa stands?

In this book we maintain that it is not. As we will see, solutions for many of the problems faced while managing the extraction of natural resources have already been discovered.

Many of the issues that plague extractive industries and typically result in resource dependency for the nations involved are being addressed in innovative ways.

Through a detailed analysis of case studies from across the continent, in countries whose energy industries are at very different stages of development, we make the case that African nations can devise a way to sustainably manage their resources and prosper. 

For a chance to win a copy of Big Barrels: African Oil and Gas and the Quest for Prosperity by NJ Ayuk and João Marques, enter our quiz here

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.16
(+0.11)
ZAR/GBP
20.59
(-0.05)
ZAR/EUR
18.30
(+0.01)
ZAR/AUD
11.68
(-0.61)
ZAR/JPY
0.15
(+0.02)
Gold
1828.12
(+0.05)
Silver
24.75
(+0.09)
Platinum
1070.99
(+0.29)
Brent Crude
54.89
(-2.34)
Palladium
2377.00
(+0.59)
All Share
63549.75
(-0.52)
Top 40
58446.35
(-0.49)
Financial 15
11916.89
(+0.01)
Industrial 25
83811.01
(+0.08)
Resource 10
63855.25
(-1.46)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 652 votes
No, I did not.
51% - 1616 votes
My landlord refused
28% - 875 votes
Vote