Discovery of minerals, gas and oil in many African countries has led to what economists call the paradox of plenty - a phenomenon in which macroeconomic forces create pressures for over-reliance on an energy or a mining sector, leaving other domestic economy sectors to deteriorate. The Democratic Republic of Congo (DRC), which was called a geological scandal because of its vast concentration of minerals, and Nigeria have become the poster children of what is wrong with oil and mineral discoveries in Africa. Both countries despite having huge mineral and oil deposits have failed to derive dividends from them. Further, domestically, the discovery and exploitation of the mineral has led to resource nationalism - communities calling for a lion share, especially in peripheral regions long marginalised by the centre, which is often the case. Kenya and Uganda recently discovered economically viable oil deposits, following years of being the sleepy backwater of global oil production. Following the discovery of oil in Kenya and Uganda, and gas in Tanzania the region was heralded as the next frontier of gas and oil production. Uganda became the first country in East Africa to discover oil in the Albertan region West of the country in 2006. Then Kenya discovered oil in Turkana, northwest of the country, close to the South Sudanese and Ethiopian borders. Recently, the British Oil Company Tullow announced it has discovered what is thought to be 600 million barrels. This is the first time an economically viable oil reserve has been discovered in Kenya, although the country has been exploring for oil since the 1950s.
Posted on: Tue, 20 May 2014 10:17:03 +0000
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