Bottom of the Barrel: Africa's Oil Boom and the Poor
Bottom of the Barrel: Africa's Oil Boom and the PoorIan Gary & Terry Lynn Karl Catholic Relief Services | June 1, 2003
Addresses the oil boom that African countries have experienced historically, with particular attention given to Nigeria, Angola, Equatorial Guinea, Cameroon, Chad and Sudan, as well as the particular pitfalls and paradoxes that accompany African petro-states.
"Oil Boom: Peril or Opportunity? Sub-Saharan Africa is in the midst of an oil boom as foreign energy companies pour billions of dollars into the region for the exploration and production of petroleum. African governments, in turn, are receiving billions of dollars in revenue from this boom.
Oil production on the continent is set to double by the end of the decade and the United States will soon be importing 25 percent of its petroleum from the region. Over $50 billion, the largest investment in African history, will be spent on African oil fields by the end of the decade.
The new African oil boom – centered on the oil-rich Atlantic waters of the Gulf of Guinea, from Nigeria to Angola – is a moment of great opportunity and great peril for countries beset by wide-scale poverty. On the one hand, revenues available for poverty reduction are huge; Catholic Relief Services (CRS) conservatively estimates that sub-Saharan African governments will receive over $200 billion in oil revenues over the next decade. On the other hand, the dramatic development failures that have characterized most other oil dependent countries warn that petrodollars have not helped developing countries to reduce poverty; in many cases, they have actually exacerbated it.
Africa’s oil boom comes at a time when foreign aid to Africa from industrialized countries is falling and being replaced by an emphasis from donor nations on trade as a means for African countries to escape poverty. The dominance of oil and mining in Africa’s trade relationships, coupled with this decline in aid flows, means that it is especially vital that Africa make the best use of its oil..."
Associated FilesBottom of the Barrel: Africa's Oil Boom and the Poor
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