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Fuel shortages in Equatorial Guinea: An aberration to Africa’s liberty by Chofor Che, 29 July 2013


Equatorial Guinea is a state situated in Middle Africa. With an area of 28,000 square kilometres (11,000 sq mi), Equatorial Guinea happens to be one of the smallest states in Africa. It is composed of two parts, a mainland and an insular region. The mainland region, Río Muni, is bordered by Gabon on the south and east and Cameroon on the north. The insular region is composed of the islands of Bioko (formerly Fernando Pó) in the Gulf of Guinea and Annobón, a small volcanic island south of the equator. Bioko island is the northernmost part of Equatorial Guinea and is the site of the country’s capital, Malabo.

Equatorial Guinea is one of sub-Sahara’s largest oil producers. With a population of 650,702, it is the richest state per capita in Africa, and its gross domestic product (GDP) per capita ranks 69th in the world. However, the wealth is unevenly distributed and just a few people have benefited from the oil riches. According to the United Nations, less than half of the population has access to clean drinking water and that 20% of children die before reaching five.
On the 25 of July 2013, the government of Equatorial Guinea announced that the state had suffered from a shortage in petroleum products especially fuel. This news came as a big shock to Africa and the whole World. According to a report from the Economist dated 25 July 2013, tensions between France and Equatorial Guinea are set to rise as the regime blames a French company for the shortages.

Some experts were invited over the weekend to a special programme to the popular broadcasting station of France 24, to share their views on why Equatorial Guinea has to suffer from fuel shortages despite its oil rich status. Some of these experts were of the view that the West especially France has always had a strategy to distabilise regimes in Africa by making the population riot against these said regime. These analysts added that France caused the fuel shortages to make the population of Equatorial Guinea riot against the regime in power. Other invited analysts added that the regime in power was the cause of fuel shortages. For long now, just a few corrupt officials have been benefitted from the proceeds of oil and gas production in Equatorial Guinea. Oil and gas multinationals especially from France have been given the lee way to manipulate regimes at the expense of the populace.

In as much as the government of Equatorial Guinea blames France for fuel shortages, the bigger share of the blame rest with the government of Equatorial Guinea. This was a scenario which was foreseeable especially as the state allowed few corrupt individuals to benefit from the oil and gas sector in Equatorial Guinea. The state of Equatorial Guinea like many other states rich in oil and gas in Africa, has allowed multinationals from the West in complicity with the World Bank and International Monetary Fund, to manipulate oil and gas production as well as the prices of finished products. Despite the oil and gas wealth in Africa, states like Equatorial Guinea are still plagued by underdevelopment.

Africa can indeed benefit from oil and gas if the people and not corrupt government officials are put first. States in Africa like Equatorial Guinea need to start rethinking their development policy especially in the oil and gas sector. Local content needs to be amplified upon. Talking about local content and holding workshops on local content is not enough. Africans need to be adequately employed and remunerated in the oil and gas industry. Africans especially Equatorial Guineans need to be involved in deciding on policy on fuel prices, especially as these products are necessary for human survival. Such measures can save Africa and Equatorial Guinea from an aberration.

 
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Posted by on July 29, 2013 in Africa Development

 

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Solar group to World Bank: Give us gas and oil’s $12B, and we’ll cool planet, By Mark Halper, SmartPlanet, 22 November 2012


 

Square these two sentences:

  • Earlier this week, the World Bank called for urgent action to stop catastrophic global warming.
  • Over the last 6 years, the World Bank has financed $12 billion worth of fossil fuel projects – the sort of thing that stokes the planetary thermometer –  according to renewables energy group Desertec Foundation.

Scratching your head?

So is Desertec, the Hamburg, Germany international outfit that wants to build solar power plants in the deserts of North Africa, the Middle East, China, the U.S., Australia and elsewhere to wean the world off of fossil fuels.

The group’s director, Thiemo Gropp, has issued an open proclamation under the headline, “$12 billion in World Bank funds would be better invested in desert power than in fossil fuels.”

Read more at Solar group to World Bank: Give us gas and oil’s $12B, and we’ll cool planet

 
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Posted by on November 22, 2012 in Uncategorized

 

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Informing the People: Oil Contracts Demystified, By Zara Rahman, Think Africa Press, 21 November 2012


With oil economies booming in Africa, OpenOil has published a guide to help ordinary citizens understand the complex and jargon-filled oil contracts their governments have signed.

Think of the oil industry and, along with spills and environmental problems, many people think of secrecy and corruption. But transparency is increasing, albeit from a low base and poor historical record in the area. The tide is gradually turning with more and more data being put online, and there are many initiatives doing great work on making machine-readable data accessible and understandable. But until now, oil contracts have remained extremely difficult to unpack.

Limitations of transparency

There is a trend emerging in governments publishing, or putting online, the contracts they sign with international oil companies. This is undoubtedly a great success for the transparency movement globally. There are now seven jurisdictions around the world who publish their oil contracts, with more to come, and transparency of oil contracts is being written into constitutions and emerging as a best practice globally.

Publishing these contracts is the first step towards allowing citizens to know what is happening – something that will increase democratic ties between citizens and the state. But there remains one key problem – a typical oil contract is over 100 pages long and written in complicated legal jargon. It is not the kind of document that someone without a law degree, or years of specialisation in the topic, can pick up and hope to understand.

Tools to help people understand these contracts have, until now, been overwhelmingly aimed at industry employees or those with elite levels of education. These have generally taken the form of private courses (costing $3,200 per person for two days, and held in London or Abu Dhabi) or expensive legal text books aimed at the postgraduate law student. Clearly, neither of these is going to help a civil society activist in the Niger Delta make sense of the contracts governing their oil industry.

Bringing open thinking to the oil industry

To address this, OpenOil convened a group of ten world-renowned experts at the beginning of November to come together for a week and collaboratively write a book on how to read and understand oil contracts, in what is known as a ‘book sprint’.

To many, the idea of writing a book on a topic as complex and involved as oil contracts seemed crazy. Even more so, perhaps, considering that no preparation was done beforehand; no planning chapter titles, or organising who was going to write what. All work began at 9am on the Monday, and involved having a lot of faith in the facilitator of the method, who has now used the book sprint method to produce over fifty books.

The result was ‘Oil Contracts – How to Read and Understand them’, released under the Creative Commons license and thus free for all to download.

How does a guidebook help?

The terms decided in contracts can have long reaching effects, and be valid for anything up to 20 or even 30 years. And it is in the oil contracts that many factors are decided on, such as: the environmental standards that companies have to abide by, clauses relating to the effect of the project on the local economy and, most importantly for many, the amount of money that the government is going to get.

Read more at Informing the People: Oil Contracts Demystified

 
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Posted by on November 21, 2012 in Uncategorized

 

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Labour unions in Cameroon call on local content policy improvement and better recruitment measures especially in the oil and gas sector, By Chofor Che, 12 November 2012


Since June 2012, civil society groups in Cameroon have been holding meetings with respect to improving recruitment environment in public and private sectors in the country. These moves also include improving the local content policy in the oil and gas sector in Cameroon. Local content policy warrants that private investors in sectors like the forestry as well as in the oil and gas sector, recruit and train locals, to actively participate in these sectors in their home countries. This to some extent entails that locals are involved in this sectors and add value to their home countries, both economically and professionally.

In mid-2012, the Federation of Trade Unions of Cameroon (L’intersyndicale du Cameroun) which is the national representative of all Cameroon workers, and comprises of the National Union of Cameroon Workers (UNTC) and Union of Free Trade Unions, was involved in pushing forth the agenda of ensuring that employees benefit from better working and recruitment conditions.  Amongst other issues, the Federation of Trade Unions was vehemently against the price hikes in gas and fuel prices, witnessed by the country recently.

According to a representative of UNTC, the central government has been very negligent in the oil and gas sector and is the main cause of the hikes in fuel prices, as well as poor remuneration of workers in the public sector.  The labour unions advocated for a reduction of fuel prices and an increase in Cameroon’s minimum wage from XAF 28,246 per month to some substantial amount. The issue of also coordinating and improving on recruitments in the oil and gas sector was also a major issue.

As part of a change in the local content policy, the Federation of Trade Unions were bitter against the way the National Oil refinery (with French acronym SONARA) functions. They could not understand why a lot of money is pumped into this structure which does not refine oil and gas. The state exports crude oil and imports finished oil products, which become very expensive for the average Cameroonian. The argument given by the state is that, it is very expensive for SONARA to refine oil. According to Federation of Trade Unions, this money should be utilised in infrastructural development and in a betterment of the working conditions of workers.

Focusing on the issue of the recruitment of workers in the oil and gas sector, which is currently coordinated through employment services, this representative from UNTC, is of the view that recruitments via employment services, does not add enough value to local content. Usually those employed via employment services do face issues of poor wages, uncoordinated compensation schemes by multinationals, risks of being fired without justification, just to list a few. The representative of UNTC added that complaints and reports from affected employees especially those fired by some multinationals, show that these employment services take no measures to protect the rights of workers. Workers are left on their own.

The representative from UNTC therefore revealed that, there is a push to involve the state in the recruitment exercise of workers in the oil and gas sector, as part of the move to reshape local content policy in the sector. This position was corroborated by a representative of the Ministry of Labour and Social Security, who added that, there have been a series of consultation meetings to revamp the local content policy in the oil and gas sector. Some of these meetings focused on strengthening and protecting the rights of Cameroonians working in the oil and gas sector, as well as putting in place legislation on local content policy.

There is indeed a need for Cameroon to improve on its local content policy in the oil and gas sector. At present, the country has week legislation on how citizens are recruited in the sector and how these citizens are to benefit the country professionally. Improving local content policy will go a long way in developing the country, if and only if corrupt government officials do not utilise this medium as a means of enriching themselves, rather than developing the country and harnessing employment measures for Cameroonians as well as foreigners.

 
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Posted by on November 12, 2012 in Uncategorized

 

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Doing business in Africa, By Ian Mann, Fin24, 11 November 2012


Business in Africa: Corporate Insights, compiled by Dianna Games [A compilation of articles]

GAMES’ compilation of articles is a much-needed tool. It provides a very different perspective on doing business in Africa and fills the gap between data-heavy analyses and the popular press.

The book is divided into three parts. The first is an overview of the business environment by Games and provides a valuable gateway to a more positive, but measured view of the continent.

How things have changed is succinctly illustrated by the appeal from Portugal to its former colony Angola to increase its investment in Portugal’s ailing economy. Angola is now one of the fastest-growing economies in the world.

Large corporations such as Standard Chartered Bank, Unilever, Diageo and Nestlé are increasing their investment in Africa and there is no shortage of other good news stories. However, perspective is necessary.

Most of the growth is coming from economies which rest on a single economic generator, a natural resource and which indicates nothing about the general economy, the physical infrastructure or the quality of life of the citizens of these endowed lands. 

The restraints on growth remain: corruption, weak legal systems, obstructive bureaucracy and more.

For those who want the added depth that comes from an historical perspective, Duncan Clarke’s essay on Africa’s economic evolution is a short and very manageable overview that adequately provides context.

Some futurists, he reports, claim that Africa is capable of 5.1% growth from 2010-50 based on its demography and natural resources. This will make its gross domestic product similar to that of the US or Europe in 2010 – hardly shabby.

However, this level of growth for 40 years will be challenged by the capacity to absorb the growing workforce and by what Clarkes calls “the inherent curses on Africa’s economic house”. These include low competitiveness, poor land usage, weak nation states and more.

The essay by Leke and Chironga focuses on the growth story, which they tell succinctly and incisively. They see business opportunities lying in four distinct categories. There are consumer-facing opportunities in areas such food, telecommunications and housing.

There are also agricultural opportunities, particularly in the production of higher value items such as horticulture, all possible with the enormous amount of available arable land – some 60% of that available in the world!

The infrastructure needs of the continent are an obvious opportunity which the authors believe will attract $200bn by 2020. And of course, there is Africa’s resources including much-needed oil, gas, coal and iron ore.

All of the four opportunities come with the challenges of a slowing global economy, the necessity to maintain stability and the desperate need to avoid jobless growth.

The third part of the book is a collection of essays by or about corporations that have had important African experiences. All the reports cast light on the challenges of doing business in Africa from different angles.

What does emerge is that Africa has all the same challenges that are attendant to moving into any foreign country, such as unfamiliar business practices and legislation. However, the continent has many additional challenges.

The contributions are wide-ranging, from miner AngloGold Ashanti, to food franchiser Nando’s; from property company Liberty Properties, to the environmental tourism of Wilderness Holdings.

For the mining sector, the instability of the legal framework of African countries is a particular challenge, as is a changing tax regime. Ghana raised the corporate taxes for miners from 25 to 35%, in addition to a 10% windfall tax.

The significant contributions of these companies to the national economy reach far beyond tax contribution and extend to healthcare, employment and skills development. This is only gradually being acknowledged by the host countries, as is the fact that the country earns far more from the mining house’s efforts than do the shareholders.

The growing interest in Africa has spurred demand for more accommodation and, on the surface, appears to offer enormous opportunities. This, however, has to be counterbalanced by the lack of infrastructure, trained staff, materials and available land.

While there may be open spaces aplenty, the rights to the land is not as clear as it is in South Africa, for instance, where the ownership of each piece has been identified.

The Nando’s account of their forays into Africa offers some sobering lessons, the most pointed being the need to choose local partners with extreme care.

Knowing who you are entrusting your business or its reputation to will determine your long-term success or failure. No amount of legal work will ensure the relationship; this has to be built in the old-fashioned way, gradually, with constant communication of values and expectations.

The aim has to be to grow trust in both directions. 

Nando’s co-founder Brozin offers sobering advice: “Humility is a big factor in operating in Africa. You need to be humble and listen a lot.”

Being a collection of stand-alone essays unified by the theme, the book can be dipped into at any point, but one chapter should not be omitted – the 20 Tips on Doing Business in Africa, a quick set of lessons that could save the bold much trouble.

Readability:  Light –+– Serious
Insights:      High -+— Low
Practical:     High -+— Low

 – Fin24

*Ian Mann of Gateways consults internationally on leadership and strategy.

 
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Posted by on November 11, 2012 in Uncategorized

 

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Never waste a crisis, By Patrick Smith, The African Report, 2 November 2012


After seeing the disarray among Western economies at the International Monetary Fund (IMF) and World Bank meetings in Tokyo, African officials may have recalled the advice coined by Rahm Emanuel, President Barack Obama’s former chief of staff: “You don’t ever want a crisis to go to waste.”

The idea is that bad times allow governments to make radical policy changes as they can catch vested interests off guard. For Africa, this could be the time to invest massively in local manufacturing and services, then consign the old trading post economies to history.

Emanuel was speaking at the height of the 2008 global financial crisis, but his adage may be more relevant still for Africa in 2012 as its trading partners in the West struggle with a double-dip recession. Even if the United States recovery continues apace, European economies look set to stay in the anaemic zone for several years.

That further increases the importance of Asia’s economic resilience for Africa. Yet there are clear limits too: Asia’s demand for export commodities depends critically on the West’s demand for the manufactures. That commercial chain reaction could stymie the better economic story in Africa.

Yet there are signs that this division of labour is at last beginning to break up. Asian markets are growing in size, muscle and independence. The big economies in East and South Asia have launched ambitious fiscal stimulus programmes and are cautiously switching resources from savings to consumption.

Also good on the African ground is the drive to use much of the continent’s oil and gas resources to run new power stations. Almost all the latest generation of energy producers – Ghana, Tanzania, Uganda and Mozambique – are calling on contractors and banks to find ways to finance and build electricity generation and transmission projects. Using its access to the Nile waters, Ethiopia is leading the way: with its 6,000MW Renaissance dam project, it will export electricity across the region.

Read the original article on Theafricareport.com : Never waste a crisis [501820962] | The Africa
 
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Posted by on November 3, 2012 in Uncategorized

 

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Africa Debate: Will Africa ever benefit from its natural resources? BBC News Africa, 15 October 2012


Whether Africa will ever benefit from its natural resources is a question that is more relevant now than ever, as new discoveries of coal, oil and gas across East Africa look set to transform global energy markets and – people hope – the economies of those countries.

But can the likes of Kenya, Tanzania, Mozambique and Uganda really turn their newfound riches into tangible wealth for ordinary people?

This month the BBC Africa Debate team will be in Ethiopia asking just that. Politicians, business representatives, activists and academics from across the continent will be taking part, as over 800 experts gather in Addis Ababa for the Eighth African Development Forum.

“On average, resource-rich countries have done even more poorly than countries without resources,” according to Joseph Stiglitz, former chief economist at the World Bank and professor of economics at Columbia University, in the United States.

Read more at Africa Debate: Will Africa ever benefit from its natural resources?

 
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Posted by on October 25, 2012 in Uncategorized

 

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