READING headlines a while back, it seemed there was no hole one could dig in East Africa without hitting oil or gas.
Uganda made Africa’s largest onshore discoveries of oil in over 20 years. Then Kenya struck oil in its northwestern Turkana areas.
Tanzania showed up with a mouth-watering 57 trillion cubic feet of proven natural gas reserves, and reports said it was expecting to earn $5 billion annually in exports.
But oil and gas, while bringing great fortunes, have also proved to be the roads to hell in Africa as elsewhere.
Oil accelerated Sudan’s civil war in the 1990s, and drove the worst instincts of the elite who took power after the southern part of the country became independent as South Sudan in January 2011, then descended into an even more brutal conflict just two years into statehood.
Further north in the Horn of Africa, Ethiopia announced that Chinese firms were working to develop oil and gas projects in the Ogaden Basin, located on Somalia’s border, in a region that has lately become restive.
WHEN OIL DEFORMS NATIONS
But perhaps nowhere has oil deformed nations, like in Nigeria, Africa’s largest exporter, and Angola. Corrupt politicians and businesses in both allied to loot the oil wealth, leaving the majority of citizens destitute.
Nigeria has now overtaken India as the country with the largest number of people living in extreme poverty, with an estimated 87 million people, or around half of the country’s population, thought to be living on less than $1.90 a day. Angola, on the other hand, has one of the highest child mortality rates in the world.
By 2011, the UN Environment Programme (UNEP) was already warning that Shell and other oil firms had systematically contaminated a 1,000 sq km area of Ogoniland, in the Niger delta, with disastrous consequences for human health and wildlife. That was an area more than twice the size of the Seychelles.
Currently Uganda is developing a 1,445km-long heated oil export pipeline from its western Lake Albertine basin to the Tanzanian port of Tanga.
Estimated to cost $3.55 billion, it was initially set for completion by the time the country begins oil production in 2020, but against a background of several missed deadlines, experts have now moved that date out to late 2021 at the earliest. Uganda is also building a refinery.
Kenya has moved faster, and has already transported crude oil to Mombasa under the Early Oil Pilot Scheme, after a tenuous agreement with Turkana County over sharing the oil revenues.
OIL AND GAS PARLEY
With Nigeria and Angola the poster boys for the “oil curse”, there is a push to prevent East Africa falling down the same hole. An Oxfam and African Media Initiative dialogue that gets underway in the Kenyan capital Nairobi on August 22. will explore whether East Africa’s extractive sector can find a path that distributes the benefits of oil better, and does not kill the lands.
It’s possible, but the region needs to proceed from the realisation that the direct benefits of oil and gas, themselves, are often modest. The experience of the few countries like Norway that have done well with their oil, is that the good things come from what is done with the oil windfall.
It’s much like how dance clubs make money. They don’t rake in the big bucks from people dancing, although that’s why they exist, but from the sale of overpriced drinks and nyama choma to adrenalin-fuelled revelers.
One of the key lessons must be that East Africa needs new forms of consent-based politics, to reduce the risk of oil-driven strife, and both sabotage and illegal refining that have plagued Nigerian oil in the Delta region, and added to the oil pollution.
But for East Africa, because it has a regional bloc that, in some respects, is more advanced than its peers in several economic areas, it’s an opportunity to entrench integration and build new prosperity corridors.
All of 80% of Uganda oil pipeline, officially known as the East African Crude Oil Pipeline (EACOP), will be in Tanzania, locking the two countries in a bond that, while it might be shaken, will be hard to break. In turn, it is further cement for the EAC project. The Kenya-Uganda railway did the same for the two countries, interlocking their economies in ways that when, even when hobbled at the official and legal levels, was still fed through smuggling on a large scale in the 1970s and 1980s.
For that reason, there was a failure of imagination in the conception of EACOP. A more forward-looking approach would have conceived of it as a development belt, mirroring some of the thinking behind the slow-moving Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) corridor project, which is designed to have ports, pipelines, roads, railways, electricity lines as part of the package.
EACOP could profit further from incorporating fibre optic, and mega food storage along the corridor, since it has not yet been built. It would provide a much-needed link to eastern Democratic Republic of Congo, and a quick addition for Rwanda to access the Indian Ocean.
The wealth from these investments will not only be bigger, but would continue to flow well after the oil wells have dried and the world has ditched fossil fuels for clean energy – which is around the corner.
The road to hell has often been built by oil and gas, yes, but so can the highway to development heaven.