East Africa and the resource curse: Where are the jobs, where is the power?

Lots of oil and gas, but will this translate into electricity and jobs? Map Credit: U.S. Geological Survey.

I’m catching up on news and have come across another recent article about East Africa’s oil and gas development. Avoiding the Resource Curse in East Africa’s Oil and Natural Gas Boom, draws attention to a fundamental problem with oil and gas development across Africa: minimal job creation and little or no increase in power (electricity).

Can any government really call oil a “blessing” if it doesn’t bring employment and power to the population?

The author, Jill Shankleman, is a senior scholar at the Wilson Center and former senior social and environmental specialist at the World Bank. “Up to now,” she writes, “oil companies and governments in developing countries have worked on a narrow model of economic benefit. Oil companies produce oil (and gas) for export. The government gets a hefty share of the profit in the form of taxes and product. To a greater or (often) lesser degree, efforts are then made to open up employment and supply chain opportunities locally.

“Where this model applies in West Africa, it is typical to find huge, state-of-the-art oil and gas export facilities sitting alongside communities where people live in houses without electricity. People like me who are involved in community consultations always hear the same thing when we speak with locals: ‘Where are the jobs? And why are we living in darkness next to this place which is stealing our oil?’”

Today in East Africa, she writes, “Governments are contesting the assumption that the oil and gas found in their territory should be exported rather than used domestically, and people in resource-rich areas are challenging the right of the government to extract resources from “their” areas without providing them with power first.”

This is certainly encouraging, but for a number of reasons, nothing is going to change overnight. As the author points out, “Large international oil companies are not in the business of developing local energy supplies, especially in developing countries. In the past two decades, companies have become more and more streamlined and rid themselves of ‘non-core’ activities. With some exceptions, their core capabilities do not include development of local power and fuel systems. They are not interested in building local energy markets for themselves; they aim to serve existing markets.”

Read the entire article here: Avoiding the Resource Curse in East Africa’s Oil and Natural Gas Boom

This entry was posted on Saturday, February 23rd, 2013 at 10:50 pm.