oil

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Meet Big Oil’s Big Men in Nigeria and Ghana | 

Masked rebels in the oil-rich Niger Delta of Nigeria.
Masked rebels in the oil-rich Niger Delta of Nigeria.
Big Men

Companies have been taking oil out of Nigeria for nearly half a century, making it one of the wealthier nations in Africa.

But the wealth is not well-distributed. What should have been a boon for Nigerians has left out most of them. Corruption, domestic and foreign, a series of coups and the concentration of oil wealth has actually undermined progress and development. At least half of all Nigerians live in poverty.

In the oil-rich Niger Delta of Nigeria, some have taken up arms to steal from and sabotage the oil pipelines. It has made for a continuously insecure situation in the region and a burgeoning health disaster caused by oil spills, both intentional and accidental.

A new documentary film, Big Men, explores if the ‘resource curse,’ will repeat itself elsewhere in Africa.

Other African nations already have had experiences somewhat similar to Nigeria. The citizens’ hope that follows the discovery of oil frequently loses out to the realities of competition and corruption. The ‘resource curse’ applies as much to coltan in the Democratic Republic of Congo and diamonds in Angola as it does to Nigeria’s oil.

That’s why some were immediately worried when a small US oil company discovered oil in the ocean off the coast of south Ghana. The Dallas-based Kosmos Energy tapped into some 3 billion barrels in 2007. The company had negotiated a favorable contract with the government of Ghana that would give them exclusive drilling rights for finding such a field.

At that time filmmaker Rachel Boynton was looking for a new project. Her documentary, Our Brand is Crisis, provided a look inside the workings of politics through the political consulting firm Greenberg Carville Shrum’s work in the 2002 Bolivian election.

“I was feeling very ambitious. I wanted something very big and very difficult,” she said to Humanosphere.

Continue reading

The case for African countries giving people a cut of oil revenues | 

Cash exchange in Somaliland.
Cash exchange in Somaliland.
G. A. Hussein

Natural resources could be the next great development financing tool. It is quite simple. Take the money that a government makes from the sale of oil, gold, copper, etc. and give citizens a cut.

Giving direct cash will help out the people that need it most and it could spur on development as people will then spend the money on local businesses and services. Additionally, it will reduce corruption and let the average citizen hold his or her government accountable for how money is spent.

That is the basic case made by Todd Moss of the Center for Global Development in his Oil-to-Cash initiative. A new working paper from leading World Bank economists Shanta Devarajan and Marcelo Giugale takes the idea and applies it to resource-rich African nations. They come up with some theoretical ways that countries can design schemes that will turn natural resources from a curse to a blessing. Continue reading

Will Uganda avoid, or succumb to, the oil curse? | 

Flickr, Stefan Gara

Nigeria is not a poor country, yet it is full of a lot of very poor people.

Nigeria has lots of oil, and oil money, but little of this money ever makes it to regular Nigerians. As this entry in Wikipedia about Nigeria’s economy says:

Economists refer to the coexistence of vast wealth in natural resources and extreme personal poverty in developing countries like Nigeria as the “resource curse”…. the World Bank has estimated that as a result of corruption 80 percent of energy revenues benefit only 1 percent of the population.

It’s not just homegrown corruption around oil that causes problems, as evidenced by this (little-known, at least in the U.S.) episode involving former Vice President Dick Cheney.

Now, it appears that Uganda is becoming a major oil-producing nation. This could be a good thing, or not so good.

Todd Moss at the Center for Global Development asks Could Uganda be the Next Niger Delta? What Moss is really asking by comparing Uganda to the southern oil-rich part of Nigeria is if Uganda will also see massive corruption, human-rights abuses, murder, terrorism and institutionalized kleptocracy.

A wall of new oil money—coupled with new projections that Uganda’s oil reserves might actually be double previous estimates— could very well accelerate the country’s disappointing decline in governance. Oil revenues that could in theory build up the sorely needed infrastructure and social services could instead end up fueling conflict, wasted on white elephant projects, or used to further consolidate President Museveni’s grip on power.

The potential damage of the “oil curse” is not limited to aspects of money and power. As The Guardian’s John Vidal writes today, in Shell oil spills in the Niger Delta, the reaping of oil profits at the expense of the local community has had broad environmental impacts that adversely affect all Nigerians living there:

The Niger delta is one of the most polluted regions in the world, with more oil spilled across the region each year than spilt in the Gulf of Mexico in 2010. According to Nigerian government figures, there were more than 7,000 spills between 1970 and 2000, and there are 2,000 official major spillage sites, many going back decades, with thousands of smaller spills still waiting to be cleared up.

Uganda has rich farmland, and has long been regarded as a potential major breadbasket for Africa. Will oil support its overall economic development or just lead to another curse?

Here is a documentary about the many issues surrounding Nigeria’s oil production, Sweet Crude, done a while ago by Seattle film-makers (who got arrested while filming it).