Over 25 African States fail to reap full benefits from oil and other natural resources-Guyana, other emerging producers should take note –NRGI

Over 25 African States fail to reap full benefits from oil and other natural resources–Guyana, other emerging producers should take note –NRGI

Apr 19, 2019 News

Africa’s Co-Director at NRGI, Silas Olan’g

By Kiana Wilburg
Guyana and other emerging oil producers are being urged to pay rapt attention to a recent analysis that was conducted by the Natural Resource Governance Institute (NRGI).
That analysis revealed that 26 of 28 sub-Saharan African countries failed to reap the benefits from their natural resources. The NRGI report attributes this failure to an “implementation gap” between the laws that govern the extractive industries and the practices in reality.
Specifically, Silas Olan’g, Africa’s Co-Director for the Natural Resource Governance Institute, said that if countries in sub-Saharan Africa closed the ‘implementation gap’ and fully implemented their own laws, they could generate greater income from natural resources.
“They could also better combat the negative human and environmental impacts of extraction,” said Olan’g.
The NRGI Co-Director said that Africa is abundant in natural resources and is home to 30 percent of the world’s oil, gas and mineral reserves. He said that more than half of the exports of many countries in sub-Saharan Africa come from natural resources and as much as 90 percent in the most oil-dependent countries.
He also noted that mineral reserves represent a large share of Government revenues across the region and have the potential to become even more important in countries with recent discoveries, such as oil and gas in Tanzania and Uganda, and large reserves of strategic minerals such as cobalt in the Democratic Republic of Congo.
The official stated, however, that the biggest implementation challenges faced by resource-rich societies in sub-Saharan Africa are fulfilling the legal requirements to transfer revenues collected from oil, gas and mining to local authorities, and publicly disclosing information on social and environmental impacts. Olan’g said that half of the 28 countries studied do not disclose environmental and social impact assessments, even though this is a legal requirement in many countries.
“Trust in Government and companies erode when legal reform is not followed and citizens are left in the dark. Closing the ‘implementation gap’ is in everyone’s interests because ultimately, it enables countries to reap the benefits that their mineral wealth should offer,” said Olan’g.
The official continued, “…Sub-Saharan Africa lags behind other parts of the world in governing state-owned mining and oil companies and natural resource funds, which manage billions of dollars of resource revenues in countries like Angola, Gabon and Nigeria.
“Governments tend not to respect rules for managing assets held in natural resource funds and for disclosing conflicts of interest, particularly where corruption is poorly controlled—a reality in most of the countries surveyed.”
Olan’g added, “Building capacity and allowing space for independent oversight is critical for holding government institutions accountable in resource-rich countries. Official audit bodies and non-state actors like the media play an important role here.”
The NRGI official said that the foregoing situation serves to illustrate that legal reforms can make headlines but it is the implementation that will ultimately deliver benefits to citizens.