BY TOM ODHIAMBO
Oil, oil, oil everywhere but should we really celebrate? Oil is being discovered all over East Africa. Kenyans and Ugandans are all dreaming about petrodollars. But are we possibly arriving at the party when it is about to end?
Could we be investing scarce resources and emotions in a commodity whose global market price is already depressed and could continue to decline, and therefore unlikely to make a profit in future?
Could we be borrowing too much in anticipation of the riches from the oil only to end up with a debt bigger than the returns from the sales?
These aren’t idle questions. In fact, they have been asked ever since oil was discovered in much of Africa. Often they are discussed under the topic of ‘resource curse.’ Those versed in this subject claim that Africa’s resources are its major curse; that all the minerals, oil and other natural resources have brought Africans more pain than gain. Well, just look at the Democratic Republic of Congo. What do you see? – chaos, death, destruction, political instability etc, ever since the Belgians carved it out as a commercial dominion. What about Nigeria? – Supposedly Africa’s biggest economy. Based on what? – Sale of oil. But the tragedy is that Nigeria can’t account for almost 60% of the money from selling oil over the years. It goes into private pockets, guaranteeing stupendous wealth for a few whilst the rest wallow in poverty.
This tale of Africa’s wealth and misery is the subject of the book, The Scramble for African Oil: Oppression, Corruption and War for Control of Africa’s Natural Resources (Pluto Press, 2012), by Douglas A. Yates. This book is a sobering addition to the countless books on the question of resource exploitation in Africa. Think about Nigeria, Angola, Cameroon, Congo, Gabon, Chad, Sudan, Equatorial Guinea, Libya, and Algeria among other African countries. What is common to these countries? It is oil. And why is this oil so important? It important because there is hardly discernible improvement in the quality of life of their citizens despite billions of dollars earned from oil sales, previously to Europe, Asia and America and now mostly to China.
But why is this so? Where does the money go? Well, scholars argue, and Yates demonstrates with quantitative data and qualitative details, that wealth from sale of African oil mostly remains in the global North – Europe and America – through retention of profits by multinational corporations and massive looting by the political and economic elite. The two biggest oil producers in Africa, Nigeria and Angola, are studies in how Africa oil has been more of a curse than a blessing. In other words, not much of the oil money ends up in the public coffers as it is pilfered, often in advance of the real sales. The African political elite take massive loans, which they bank offshore (as the Panama leaks have so rudely reminded us) and or buy silly toys, build useless monuments to their egos whilst the ordinary citizens go daily without the basics of life.
The oil curse has bred unbelievable kleptocracies and dictatorships in Africa. The political elite, such as in Angola, Nigeria, Gabon, Cameroon, Sudan – with the best example being the later Muamar Gaddafi of Libya – believing that the public wealth is actually personal riches. So, they more or less see the money as windfall or God’s gifts. When they aren’t keeping most of it to themselves and their kin, they will dole out a little of it to friends and political allies. This way they buy loyalty from their countrymen and begin to justify perpetual rule. Meanwhile, they will arm the military and offer the security services the best pay and resources. The end result is a government that can’t stand any challenge to its authority. You see this in Angola, Cameroon, Sudan, Gabon, whilst, for instance, in Nigeria, the supposed regular democratic elections are simply a renegotiation between the elite on who should sit nearest to the feeding trough.
The point that Yates highlights in The Scramble for African Oil is that African oil need not be a curse, and that indeed the money can be invested in development projects that would benefit a majority of the population. Venezuela, despite its current problems, is an example of a country where wealth from oil has been invested in education, health and social welfare. African political and economic elite just needs to be less greedy and to appreciate that money invested locally bears profits that significantly improve the quality of life for their citizens than when it is stashed in offshore accounts.
For Kenyans who are salivating at the prospects of making wealth when the oil starts flowing from Turkana or whatever other part of northern Kenya, evidence suggests that the ruling and business elite might already have shared the spoils in advance of the sales. Whatever little of the wealth remains may go towards paying for the loans we owe foreign countries and banks today. Our most urgent prayer should be that our leaders will have learned from the tragedies of other African countries that drill oil but still import processed oil products.
The writer teaches literature at the University of Nairobi.
