New Book: Africa’s Energy and Natural Resources in the Global Economy
Posted: Saturday, September 03, 2011
by Waniss A. Otman
Department of Economics, University of Aberdeen
Africa’s Energy and Natural Resources in the Global Economy
2010
By: Waniss A. Otman and Erling J.Karlberg
Executive Summary
Chapter one : Resource Development in Africa : The Traditional Approach
They describe the physical geography of the continent of Africa, which has an area of approximately 30,244,050 sq km including adjacent islands. Africa straddles the equator, having an almost equal south and north extent. This division of Africa into almost two equal parts (lengthwise) across the equator makes the climatic and physical conditions in the north repeat themselves in the south. For example, the Kalahari Desert is the south's answer to the Sahara; the Karoo matches the Maghreb, while the conditions in the Cape area are almost identical to those of the Mediterranean region.
In terms of geology and relief features, Africa’s surface consists of a geologically stable land mass made up of the pre-Cambrian basement rock overlain in part by sedimentary cover of a later period. The continent is made up of very old crystalline, metamorphic, and sedimentary rocks of great hardness (collectively known as “basement complex”). Africa's land mass is made up of a simple tectonic plate, although some geographers attempt to separate the Rift Valley system from the rest of the continent. The continent has some extensive areas of faulted plateau. It has however suffered little in terms of folding hence young folded mountain similar to the Rockies and Andes are missing. Only the Atlas Mountains in the North and the Drakensburg mountains in the South are exceptions.
With regard to human geography, about 999 million people lived in Africa in mid-2009, representing about 14 percent of the world’s population. This figure is projected to reach 1.994 billion in 2050, since Africa has the fastest growing population in the world due to high birth rates; high fertility rates; mortality rates that have declined faster than fertility rates; and a relatively young population, with 41 percent under the age of 15. At the continental scale, Africa is relatively sparsely settled and population densities are relatively low, reflecting the dominance of rural settlement.
Population concentrations are highest in the following regions: along the Nile River, which provides a critical water resource; the Maghreb region of the northwest coast, which lies in a wetter and milder climate zone; West Africa, where the early population developed a system of agriculture based on some of Africa’s best soil; Highland East Africa, where volcanic highlands associated with the Rift Valley development contain fertile volcanic soils used for subsistence and cash-crop agricultural systems and the eastern half of South Africa, where population distribution is related to an urban economy based on mining activities.
The authors then provide an overview of African history. In the centuries before European contact, the dominant activity in Africa was agriculture. In all settled agricultural communities, people observed their own environment and evolved techniques for dealing with it in a rational manner. Advanced agricultural methods were used in certain areas, such as terracing, crop rotation, green manuring, mixed farming and regulated swamp farming. Then came the single most important technological change underlying African agricultural development - the introduction of iron tools, notably the axe and the hoe. Based on iron tools new skills emerged in agriculture as well as in other spheres of economic activity.
The authors emphasise that a survey of the scene in Africa before the coming of Europeans would reveal considerable unevenness of development. There were social formations ranging between primitive hunting bands to highly sophisticated societies such as those of the North African countries of the Maghreb and sub-Saharan areas like Zimbabwe.
An analysis of trade and development between Africans and Europeans in the four centuries before colonial rule is then undertaken, in essence the slave trade. Many things remain uncertain about the slave trade and its consequences for Africa, but the general picture of destructiveness is clear, and that destructiveness can be shown to be the logical consequence of the manner of recruitment of captives in Africa. One of the uncertainties concerns the basic question of how many Africans were imported. This has long been an object of speculation, with estimates ranging from a few millions to over one hundred million. The massive loss to the African labour force was made more critical because it was composed of able-bodied young men and young women. Slave buyers preferred their victims between the ages of 15 and 35, and preferably in the early twenties. An emphasis on population loss as such is highly relevant to the question of socio-economic development. Population growth played a major role in European development in providing labour, markets, and the pressures which led to further advances in population.
To achieve economic development, one essential condition is to make the maximum use of the country’s labour and natural resources. Usually, that demands peaceful conditions. However, on the whole, the process by which captives were obtained on African soil was not through peaceful trade at all. It was through warfare, trickery, banditry and kidnapping. The effect of social violence greatly undermined any attempts at long term development in Africa.
The authors then describe the European colonial “scramble for Africa” which took place in the four decades after 1870. They point out that in the 1870s, Africa meant little to the outside; its interior was largely unknown to the world at large. Apart from areas of settlement by the British and Afrikaners in the south and by the French in Algeria, Europe's actual presence in Africa was limited to a few coastal toeholds, such as Lagos, Luanda, Zanzibar and Alexandria. This collection of expatriate communities and limited colonial claims represented the commercial debris of the old Atlantic slave trade, and the remains of more recent attempts to develop exchange of African staples for European manufactures. In 1872, the Dutch, following the earlier Danish example, abandoned the West Coast entirely. Yet within little more than twenty five years the situation was transformed during the desperate scramble and colonial partition of Africa. This period witnessed European nations including Britain, France, Germany, Belgium turn Africa into colonies following a formal partition of Africa at the Berlin conference between 1884 and 1885.
As a result, Africa was carved up into colonies, claimed and conquered by the Great Powers of Western Europe; her resources were developed or exploited by whites on an unprecedented scale, and in many places civilian colonial administrations were becoming a regular feature. By 1912, only Liberia and Ethiopia survived as independent African states. The interplay of the primary motives and methods of the invaders - well - meaning humanitarian concerns to better Africa on the one hand, with crudely acquisitive, materialistic profiteering or ambitious Realpolitik is examined. These poles are personified in the juxtaposition of David Livingstone and his "three Cs": Commerce, Civilization and Christianity, with King Leopold and "the severed hands" of reluctant Congolese rubber collectors.
Under colonialism, African economies were completely subordinated to the interests of Europe. Africa served primarily as a major resource of minerals and agricultural commodities, and as a market for European manufacturers. Consequently, colonial rulers made little effort to build diversified economies in their colonies, and introduced little manufacturing. The result is that modern Africa, to a large extent, remains dependent on external sources of manufactured goods. Because these colonial economies required cheap rather than skilled labor, colonial administrators had little motivation to provide either education or health care for Africans. Indeed, Europeans preferred to employ migrant labourers, who left their rural homes for only relatively brief periods to work in mining or plantation regions, rather than employing permanently urbanized workers. African colonies were governed by relatively small bodies of European officials; most local-level administration was provided by African employees and appointees of the colonial government. Nevertheless, colonial government was profoundly undemocratic, for public policy was made entirely by European officials, and Africans enjoyed no political rights.
The authors point out that for most Africans the colonial period was deeply unjust and frustrating, because they had little opportunity to obtain the new forms of knowledge and economic opportunity which were being introduced elsewhere, and instead were marginalised and confined to menial, poorly-paid occupations. Their disaffection deepened during the Second World War, when the British and French exhorted their African subjects to provide military service and labour for a war effort which was intended, in part, to uphold the principle of national self-determination. Post-war Africans were well aware that they were being denied the very rights for which they and their colonial masters had fought.
This deepening sense of frustration and injustice set in motion the events which would lead to national independence for most of Africa by the mid-1960s. As the Cold War came to dominate world affairs from the late 1940s, Western Europe worried that its restive African subjects would adopt Communism. This fear was intensified by a series of armed revolts (most notably the Mau Mau revolt in Kenya, but also rebellions against French rule in Algeria, Madagascar, and Cameroon), and by the rise of powerful, though non-violent nationalist movements. The European colonialists, persuaded that colonialism could be preserved only through unacceptably costly military and economic investment, more focused on the post-war reconstruction of their own economies, and increasingly confident that a Western-educated African elite would have little sympathy with Communism, began to concede independence to Africans in the late 1950s, beginning with the independence of Ghanain 1957 under its charismatic president Kwame Nkrumah.
Although much of the continent was free of colonial rule by the mid-1960s, European domination of southern Africa seemed unshaken until the mid-1970s, when liberation movements in Angolaand Mozambiqueexpelled the Portuguese, paving the way for the Zimbabweliberation struggle which triumphed finally in 1980. Nevertheless, the most brutal and implacable form of white domination in Africa - South Africa's apartheid regime - would survive into the 1990s. The historic election of Nelson Mandela as President of South Africain 1994 marked not only African victory in a long and terror-filled struggle against apartheid, but also the conclusion of the struggle against white rule which dominated African history through the second half of the twentieth century.
The authors conclude the brief historical survey by noting that decolonisation and independence have not brought the prosperity to the African nations initially forecast. As a continent, Africa remains home to 31 of the least developed countries in the world. It is also, by far, the largest recipient of donor aid – net ODA to Africa amounted to USD 38.7 billion in 2007, 37% of the global total (African Economic Outlook, 2009). Additionally high average energy and food prices in 2008 contributed to food shortages and rising poverty rates in Africa, especially in the Horn of Africa, West Africa and in conflict countries in general (UNECA, 2009).
These disturbing facts demonstrate that, undoubtedly, there is still considerable external domination on Africa’s economies and resources exerted by Western governments and financial institutions.
Chapter 2: The New Scramble for Africa
The authors highlight the fact that Africa appears to be experiencing a “New Scramble” thanks primarily to its oil and gas wealth, with the People’s Republic of China and the US as the main players, while South Korea, Malaysia, Brazil and India are also actively competing for access to Africa’s resources. The authors examine this phenomenon and conclude that as well as having purely economic motives, the two main players also have a strategic interest in expanding their presence in Africa.
The People's Republic of China (PRC) is pursuing a long-term strategy of staking out natural resources, business opportunities, diplomatic initiatives, and strategic partnerships across Africa – a point driven home by President Hu Jintao's twelve-day, eight-nation tour of Africa in February, 2006. In fact China's African Policy was clearly and comprehensively articulated by the PRC’s Ministry of Foreign in January 2006, a month before President Hu Jintao’s African tour.
China recorded $107 billion in trade with Africa in 2008, more than a ten-fold increase since 2001. In the process, it surpassed the United Kingdom to become the continent’s third leading commercial partner, after the United States and France. Chinese can be seen almost everywhere in Africa. With about 100,000 nationals living and working in the continent, the newcomers have become more numerous than Britons in places such as Nigeria, long London’s most prized West African possession. In 2006, China has committed $8.1 billion in lending to Nigeria, Angola, and Mozambique alone. By comparison, the World Bank has committed $2.3 billion to all of sub-Saharan African in the same period. By one estimate, China currently has over 1000 investment projects on the continent. These range from the highly controversial, such as China’s 40% controlling participation in the Sudanese oil company, Greater Nile Petroleum, to mining projects in Zimbabwe, the construction of a new national rail network in Angola and the revamping of the copper industry in the Democratic Republic of Congo.
In 2009, the US recorded $87 billion in trade with Africa, while US investments in Africa, although they have not risen at the same exponential rates as China over the past decade, are still enormous. According to the US Department of Commerce, US direct investment in Africa in 2008 amounted to almost US $37 billion, with resource rich countries such as Egypt, Nigeria, South Africa, Algeria, Angola, Mauritius and Libya, the top recipients.
At the same time, US oil imports (crude and non-crude) continued to dominate imports from Sub-Saharan Africa, with US $71.2 billion in oil imports in 2008, accounting for 82.8 percent of all U.S. purchases.African oil imports to the United States have been steadily rising and already account for some 20 percent of total US imports; indeed, the United States already imports more oil from Africa than from the whole Persian Gulf. According to a recent report by the Council on Foreign Relations, the region’s importance to the United States is not only because of the scale of US investment, its share of US imports, and the US citizens who help explore and produce those volumes, but also because the Gulf of Guinea countries produce high-quality low-sulphur oil that is highly valued by the US market.
Malaysia, South Korea, Brazil, and India have also displayed serious interest in Africa. For example in March 2006, the president of South Korea, Roh Moo-hyun, visited three resource-rich African countries, which according to a South Korean minister had a clear rationale: “Closer cooperation with Africa’s oil producers will help South Korea diversify its petroleum import sources”. Brazil’s president Lula da Silva has made a number of trips to Africa which are thought to help in selling Brazilian goods and services to oil-rich African countries and boosting Brazilian access to African oil. The prospect for oil in São Tomé e Príncipe saw the Brazilian authorities opening their first embassy on the island in 2003. In addition, Brazil has opened an oil-backed loan credit line with Angola for US $580 million for three years, to be repaid with 20,000 barrels of oil a day. The value of total trade between Brazil and Africa increased by 30% from 2007 to 2008, with a value of US $26 billion. Malaysia and India are also making significant investments in African oil-producing countries. In 2005, India offered lines of credit worth up to US$1 billion for infrastructure projects to West African petro-states in exchange of oil exploration rights, while in 2010 Sudan approved a US $350 million investment in a hotel/commercial complex by Malaysian interests.
Chapter 3: African Hydrocarbon Resources
The authors present a general introduction to Africa’s hydrocarbon resources in terms of geology and its major basins. A series of maps showing the major oil and gas fields and geologic provinces of Africa are provided.
The importance of Africa as a provider of world hydrocarbon resources is then discussed by the authors. As an example, the authors point out that of 2400 hydrocarbon discoveries in Africa, only 700 were producing at the beginning of the 21st century, while new discoveries are being made on an ongoing basis. Africa’s hydrocarbon assets provide an initial recoverable reserve of 160 billion barrels oil and 500 trillion cubic feet gas of which 100 billion barrels oil and 450 trillion cubic feet remain to be produced. Almost all of this resource is located in the North Africa and West Africa basins, well placed geographically for world markets. Given that the main source rocks in both these areas are oil prone and they are known to have been buried deeply enough to have passed into and sometimes through the gas window, and given that the volumes of 160 billion barrels oil and 500 trillion cubic feet hold a significant imbalance, the authors predict that significant volumes of gas wait to be discovered. It is likely that these significant volumes of gas are associated with the many unappraised discoveries that reside in the remaining 1700 discoveries that were not on stream at the beginning of the millennium.
The authors then discuss Africa’s hydrocarbon resources in a global context, in terms of quantity, quality and strategic importance. They point out that by the 2010 Africa is likely to become more important as a source of U.S. energy imports as the Middle East. In 2009 African proven oil reserves stood at 125.6 billion barrels, of which West Africa had some 60 billion barrels. West African oil is the low sulfur, sweet crude prized by the U.S. economy, and U.S. agencies and think tanks project that one in every five new barrels of oil entering the global economy in the latter half of this decade will come from the Gulf of Guinea, raising its share of U.S. oil imports from 15 to over 20 percent by 2010, and 25 percent by 2015. Nigeria already supplies the United States with 10 percent of its imported oil. Angola provides 4 percent of U.S. oil imports, which could double by 2010. The discovery of new reserves and the expansion of oil production are turning other states in the region into major oil exporters, including Equatorial Guinea, São Tomé and Principe, Gabon, Cameroon, and Chad. Mauritania is scheduled to emerge as an oil exporter by 2007. Sudan, bordering the Red Sea in the east and Chad to the west, is also an important oil producer.
It is pointed out that these strategic considerations, and also the need to counter the expansionist Chinese policy in Africa discussed in Chapter Two, have lead directly to the creation of the United States Africa Command (USAFRICOM or AFRICOM), a new Unified Combatant Commandof the United States Department of Defense, to be responsible for U.S. military operations in and military relations with 53 African nations - an area of responsibility covering all of Africaexcept Egypt.
In the final part of this chapter, the authors describe in detail the hydrocarbon industries in the main African producing nations – Algeria, Angola, Chad, Democratic Republic of Congo, Egypt, Equatorial Guinea, Gabon, Libya, Nigeria, Sudan and Tunisia.
Finally a series of tables is presented, breaking down African hydrocarbon resources (oil, gas and coal) by main producing countries, proved reserves, historical production from 1965-2009, and current production.
Chapter 4 : African Minning and Mineral Resources
The authors point out that some of the largest, and richest, mineral deposits in the world have been found in Africa. For much of the last half of the 20th century little mineral exploration and development work was done in Africa, except for southern Africa, even though there is significant potential for the discovery of new deposits. However, by the mid 1990's, modern exploration started to spread across much of Africa and many new deposits have been discovered and developed, with some of the old major deposits being reworked.
The potential of Africa for the discovery and development of mineral resources is immense. Mineral occurrences are present throughout the continent in all countries, although most of these occurrences will never be anything but isolated areas that contain small amounts of a mineral resource and will never be developed as a modern mine. The reason for that is because most of these occurrences do not contain enough volume of the mineral to make mining economic. However, the use of modern exploration methods in the region where these occurrences are known could result in the discovery of new, and previously unknown, deposits which could be of sufficient quantity and quality to allow for economic mining.
Currently Africa produces more than 60 metal and mineral products and is a major producer of several of the world’s most important minerals and metals including Gold, Platinum Group Elements (PGE’s - platinum, palladium, rhodium, ruthenium, osmium and iridium), Diamonds, Uranium, Manganese, Chromium, Nickel, Bauxite and Cobalt. The authors note that Africa's contribution to the world's major metals (copper, lead and zinc) is less than 7%. As a result silver production is low (less than 3% of the world's production) due to the fact that most silver is produced as a by product of lead - zinc and copper mining. Although underexplored, Africa holds about 30% of the planet's mineral reserves, including 40% of gold, 60% cobalt and 90% of the world's PGE reserves - making it a truly strategic producer of these precious metals.
The increase in exploration and mine development in Africa has been primarily focussed on gold and diamond exploration. Undoubtedly, there is still great scope for these commodities, but riding on the back of improving base metal prices, this sector could see an increase in activities. Mozambique, Nigeria and Madagascar are but a few countries that have tremendous potential for base metal and industrial mineral deposits.
South Africa, Ghana, Zimbabwe, Tanzania, Zambia and the DRC dominate the African Mining industry, whilst countries such as Angola, Sierra Leone, Namibia, Zambia and Botswana rely heavily on the mining industry as a major foreign currency earner. Unfortunately, several African civil wars are funded by (and often caused by) some of these commodities, in particular diamonds.
Major new mines opening in Africa or under development are distributed between South Africa, Namibia, Botswana, Tanzania, and Gabon producing gold, diamonds, niobium products, PGE’s, chrome and base metals. Major discoveries over the last year include the discovery of several potentially diamondiferous kimberlites in Mauritania, and still in the diamond scene, the potential marine deposits in offshore southern Namibia.
To conclude this chapter the authors present a series of tables and charts providing a country-by-country breakdown of major mineral reserves and current production.
Chapter 5 : Unlocking Africa’s Tourism Potential
Tourism in Africa, the cradle of civilisation, offers some of the most diverse and enchanting experiences in the world. Exotic combinations of landscapes, people, flora, fauna, history and culture provide the traveller with a unique and inspiring experience. Africa can offer a heady mix of third and first world cultures, along with some of the best and least crowded beaches in the world. Yet the authors believe that Africa, for a variety of reasons, has failed to reach its true tourist potential.
In order to understand to general picture of tourist arrivals in African countries and trends in tourist arrivals and receipts from tourism, the authors provide a series of tables derived from the World Tourism Organization (WTO) Yearbook of Tourism Statistics, 2008 Edition. These tables are then analysed and the authors discuss Africa in the context of world tourism, its overall performance and the main factors influencing African tourism in 2007-2008. They then undertake a quantitative analysis of the performance of the tourist sector in Africa by examining statistical trends in tourist arrivals in African regions, broken into North Africa, West Africa, East Africa, Central Africa and Southern Africa regions, and then individual countries within these regions.
The authors believe that traditionally, African tourism has been limited to conventional activities such as game reserves, beach resorts, major cities, museums and monuments, and the involvement of the community has been generally limited to public sector authorities and selected bodies in the private sector. As a consequence, the tourist industry in Africa has fallen far short of its real potential as a significant contributor to the local economy, either as a generator of revenue or a source of employment. With contribution to the GDP in individual African countries amounting to less than 4%, contributions from tourism compare very unfavourably with tourist destinations in other countries. Statistics generated elsewhere in the world indicate that tourism has the potential to contribute to at least 10% of GDP, which would make it one of the top five economic sectors in many African countries.
As well as making valuable contributions to GDP, international programmes and national policies around the world have now identified tourism as an appropriate mechanism for sustainable development, poverty alleviation and biodiversity conservation.
In order to ascertain methods to develop the tourism sector as a national priority in a sustainable and acceptable manner, the authors then undertake three case studies. The first is an examination of the impacts of private sector and parastatal enterprises in and around Kruger National Park, South Africa; the second is the tourist potential of Libya in a post sanctions scenario; the third is Ecotourism Kenya, a private organization to promote ecotourism and sustainable tourism practices in Kenya.
From these studies the authors draw valuable lessons which can be used to structure future tourist initiatives in Africa. These can assist to develop the tourism sector in each African country as a national priority and in a sustainable and acceptable manner. In this way tourism will contribute significantly to the improvement of the quality of life of every African.
Chapter 6 : Agriculture and Forestry Resources
In terms of overall agricultural production, the authors maintain that whilst Asia's green revolution has been well documented, Africa has struggled to keep up in agricultural development, and one in three Africans remain undernourished. Growth of agricultural production has been, for the most part, minimal, and because of the inequalities of international marketing structures, any value gained from cash crops is secured in importing countries in Europe and the US and not in the African country of origin. Yet agriculture remains the backbone of the African economy with improved productivity seen to be an important driver for growth and development. If Africa is to meet the UN Millennium Development Goals (MDGs) of 2015, significant changes are required to transform agriculture in Africa.
The authors believe that global economic history has shown that investment in agriculture lays the foundation for economic growth, industrialization and improved health and nutrition. Yet during the last 40 years, sub-Saharan Africa’s agricultural development contrasts markedly with that of Asia and Latin America. Sub-Saharan Africa stands out as the only region in the world where almost no progress has been made in raising average per capita food consumption or in reducing the incidence of undernourishment. One primary reason is that the natural resource base on which agriculture depends is so depleted that genetic improvement efforts have been able to bear only limited fruit.
However it is possible that by working together farmers, researchers and development workers can tackle these complex issues and bring about substantial progress. Farmers operating under quite varied conditions in Ethiopia, Kenya, Madagascar, Zimbabwe, Mali, Nigeria and elsewhere on the continent are adopting improved fallows, terraces, tied ridges or other improvements that increase yields, conserve scarce soil and water, replenish soil fertility. But the scale of these successes remains on the order of thousands of farm families. The real challenge is expand these promising practices and improved processes of technology adaptation to millions of farmers in order to eliminate hunger and malnutrition from the African continent.
The authors then present individual African country profiles with key agricultural data based on the latest FAO Statistical Yearbook (2006) which include:
Agriculture in the Economy, Agricultural Resources
A "spider-web" chart compares polygons formed by six analytic ratios on agriculture, for each country and the world as a whole. Major similarities and differences between a country's agricultural sector and that for the world are readily apparent in this form. In general, the polygon shrinks as a country develops. This section also reports physical quantities of agricultural real assets (land, livestock, structures, and machinery) and key material inputs (fertilizer and water from rain).
Resources Distribution
Four pie charts highlight major facets of resources used by agriculture. The first shows the portion of land devoted to agriculture, and the significant differences in national distribution of that land among arable land (including permanent crops), pastures, and other (including forests). The second shows the importance, usually predominance, of agriculture in national water use. Since irrigation is usually such an important use of water, the third pie chart shows how much of arable land (including permanent crops) is irrigated. The last pie chart summarizes estimates of the monetary value of real assets used by agriculture, comprising land, livestock, and produced assets (mainly machinery but also including structures).
Production
This section goes beyond topical tables in detailing production in agriculture, forestry and fisheries. The chart summarizes the trend in per capita agricultural production over the past quarter century, weighted by a set of constant prices.
Trade
International trade is obviously important for countries with limited agricultural resources but has become vital even to those that are well endowed because it encourages specialization -not only within agriculture but also between agriculture and other economic activities. This section provides indicators on the degree of specialization and the patterns of trade among individual nations that have emerged.
Prices
As agriculture accounts for a shrinking share of global economic activity, decisions of sectoral producers depend increasingly on relative prices that are usually evident from differences between the overall consumer price index and the food sub index but are also influenced by how international trade equilibrates price differences among countries. Trends in these measures of prices are shown in the chart, with export and import prices expressed in Dollars. Local producer prices for selected agricultural products are also given, converted to dollars first at prevailing exchange rates and then with a “green” purchasing power parity (PPP). This PPP is calculated by using a basket of agricultural products and the related producer prices.
Consumption
Agriculture is important primarily because its food products nourish people and inadequate nutrition remains a major factor in understanding low levels of human development and life expectancy in much of Africa. This section charts the major elements of national nutrition: calories, protein, and fats; the importance of selected food items in the calorie supply is also listed. The spider-web chart compares the composition or sources of national dietary energy consumption with the developed countries average. Finally, a summarized version of food balances is given for some major food categories, to show the process leading from domestic production and international trade to consumption, with allowance for agriculture's own use of its products (notably seed and feed), and inventories.
Turning to forestry, the authors state that forests and woodlands in Africa are currently estimated to occupy about 650 million ha, or 21.8 percent of the total land area, and form an integral part of the African landscape, although they are undergoing continual depletion due largely to anthropogenic factors. Africa in turn accounts for 16.8 percent of global forest cover and the Congo basin is home to the second largest contiguous block of tropical rain forest in the world.
However, forests in Africa have been rapidly disappearing, and recent assessments suggest that progress towards sustainable forest management has been disappointing. Current trends in African forestry are symptomatic of the larger social and economic situation and interventions in the sector may not be able to address many of the underlying problems in the sector. The impact of key driving forces on future developments suggests that continued forest loss is probably inevitable for at least the next one to two decades. Slow progress towards sustainable forest management is also likely to persist, due to a multitude of constraints. These trends and driving forces present a major dilemma for the forestry sector in Africa, which is that whatever is done to improve forest management may have only a marginal impact. Therefore, it will be essential to assess what is feasible given current levels of social and economic development.
In this section the authors then present a series of charts, tables and maps which illustrate existing forest coverage on an African regional basis (North Africa, East Africa, West Africa, Central Africa and Southern Africa), change in forest coverage since 1990, and a comprehensive map of current proportion of forest cover in individual African countries.
The authors then conclude the chapter with a discussion of present forest management systems in use in Africa, and highlight the commercial potential for reforestation and afforestation in order to reverse the longterm trend in man-made deforestation in Africa.
Chapter 7 : Africa’s Rivers, Groundwater :Grossly Undervalued Resources
The authors state that, in general terms, access to safe water represents one of the greatest challenges facing humanity in the 21st century. In an African context, according to the OECD Development Centre’s “African Economic Outlook”, the abundance of water on the continent remains unexploited due to a deplorable lack of infrastructure, e.g. dams. If present trends were to continue, by 2015, 370 million people in sub-Saharan Africa would lack access to safe drinking water. Even if sub-Saharan Africa were to meet the Millenium Development Goals in this area, which seems unlikely, by 2015 some 240 million people would still lack access to safe drinking water. Northern Africa is very different. The level of access to drinking water is, with Latin America, the highest in the developing world (91 per cent of the population).
The authors believe, however, that limited access to water in Africa is not mainly a resource issue. Though a third of African countries experience some pressure on their internal water resources, they are overall considered abundant in water supply. The problem is one of poor management, pollution and wastage, as well as lack of facilities – except in Northern and South Africa. In most African cities over 50 per cent of the water supply is wasted or unaccounted for.
In order to fully grasp water resources of Africa, it is important to understand basic African physical geography, as described in Chapter One, and the various African climates, where hyper-arid and arid zones, including desert areas, cover almost one third of the continent’s surface, with the climate of the remaining two-thirds ranging from semi-arid to Equatorial rainforest. To understand these the authors discuss and define basic items relevant to climate such as precipitation, evaporation and evapotranspiration.
The authors then explain that normally, the availability of water resources in a given area is expressed by the annual share in cubic metres per capita or in litres per day per capita. As such, in order to compare African water resources over time and by locality, a knowledge of the number of inhabitants or water consumers in that locality and changes over time are unavoidable to assess this share properly.
The authors then provide an estimate of the water balance of each of the main hydrologic sub-systems of the continent, and then discuss the hydrology of large river basins in East and West Africa, and Central and Southern Africa respectively, while certain aspects of hydrological interest concerning intermediate and small river basins, including ephemeral streams (wadis), are outlined and discussed.
They explain that due to the geographic location of Africa and its climate, the flow of many an African river is highly seasonal. To satisfy the human and agricultural demand for water, the natural supply of several rivers is regulated through storage reservoirs created by the dams built across these rivers. The authors provide a description of some of the large African dams, their dimensions, functions and the relevant particulars underlying the design of their respective reservoir storage capacities.
The authors then discuss and describe groundwater reservoirs some of which have huge dimensions and storage volumes. Classification of these reservoirs according to their geology, and estimates of the hydrogeological parameters of the water-bearing formations and their productive aquifers are then provided, and in particular the Libyan Great Man Made River Project is described in engineering and social terms. Of particular interest are the types of aquifers encountered, rates and means by which aquifers are being recharged. The comparison between the rates of recharge to and extraction from an aquifer serves as a criterion for distinguishing between rejuvenated and non-rejuvenated or fossil water. The quality of groundwater and its suitability for drinking and domestic purposes are reviewed.
The authors then survey and analyse in detail the surface water resources (rivers and lakes) of a number of areas of Africa and certain groups of offshore islands. The authors discuss the development of Africa from the point of view of water resources. The present state of Africa, the water resources development and major water management projects already implemented and possible future development and management of water resources are presented.
Finally the authors highlight that water sharing within one country, or between a number of countries in a certain region, is a vital issue which must be increasingly addressed in future. The question of what constitutes a fair and equitable share of the water resource is often viewed as the most difficult one where participating states are most likely to disagree. The authors emphasise that for future generations, and effective irrigation and drought control, riparian countries sharing a river basin must cooperate between themselves. The countries comprising the Chad, Nile, Niger and Okavango river basins are cases in point, and demonstrate that when the European countries which colonised Africa and defined the boundaries of those nations which later became independent, water resources and access to water for the populations were concepts which had little relevance compared to political and military objectives.
Chapter 8 : Offshore Fisheries and Aquaculture Resources
Fisheries represent a vital sector for many countries in Africa, both for domestic food supply, employment opportunities and foreign exchange earnings. Despite the low level of African fish production and export in comparison with the other continents, fish represent the major protein source in many countries (e.g. 36-58% of animal proteins in Cote d'Ivoire, Congo, Senegal, and Angola) and fishing is a vital activity for Senegal, Mauritania, Morocco, Ghana, Tunisia and many other African countries.
Yet the exploitation of much of Africa’s massive and extremely valuable offshore fishing resources, which are are either leased to foreign companies or poached through illegal, unreported and unregulated fishing (IUU), means that African fisheries are now over-exploited and most, if not all, offshore African fishing waters are approaching the limit of exploitation.
In Europe the failure of the Common Fisheries Policy to regulate fishinghas led to a situation where funds are used by the European Commission to buy access to the rich waters of West Africa. Through a series of external agreements, the Commission has negotiated access rights for vessels from Europe. For example, in a deal worth €516m to the Mauritanian government over six years, the European Commission says the “great part” of the cash will be devoted to supporting “responsible and sustainable fisheries” off Africa. However, this is taking place in an environment where increasing local fishingeffort is being deployed, and where there is little effort made to integrate a realistic and conservative assessment of the state of the fishingstocksinto the fishingagreements.
In terms of Africa’s onshore and offhore fishery and aquaculture resources, the authors then present a complete dataset on a country by country basis of Africa’s current fishing resources. This includes the continental shelf area, length of coastline (where applicable),fishing and fish processing as a percentage of GDP, annual production, imports and exports of live fish in tonnes, per capita supply, estimated employment broken into marine primary and secondary sectors as well as inland fisheries and aquaculture, and gross value of fisheries output.
They then provide on a country basis, an overview of thestructure and characteristics of the national industry. Under “Marine Fisheries”comprehensive data relating to demersal, pelagic,purse-seine,shrimp and crustacean, line, tuna and artisinal fisheries vessels is provided, while under “Inland Fisheries” river, lake and aquacultures tatistics are presented. Finally domestic demand for fish, the economic role of the fishing industry in the national economy, and fishing industry development prospects and fisheries research are examined and analysed.
Finally, the authors analyse the overall performance of the production (capture and aquaculture) of the fishing industry of the African continent in a global context from 1990-2007. From this the present status of Africa’s fishing and aquaculture resources can be compared and understood in a global context. Possible scenarios for improving African production are examined, such as using more advanced fishing technology and vessels, new aquaculture species and techniques, and sustainable management programmes for fish stock.
Chapter 9 : Africa’s Regional Economic Communities (RECS)
The authors believe that the role of the World Trade Organisation (WTO) and International Finance Institutions (IFIs) in developing African resources has not been as beneficial as originally believed. This is because, particularly in Sub-Saharan Africa (SSA), the detrimental factors of globalisation and trade reforms, and the SSA’s unchanged situation of commodity dependence and lack of industrial base, which are crucial obstacles to its long-term growth, have not been addressed in depth either by IFI lending conditionalities or the WTO rules.
This is shown by the fact that SSA’a share of world trade continues to decline Its exports have grown more slowly than world exports. From the mid-1950s to 1990, SSA’s share of global exports fell from 3.1 to under 1.2%. According to UNCTAD, the share of SSA exports in world exports was 3.8% in 1980, 2.0% in 1990, 1.5% in 2000, with a slight improvement in 2004 (1.6%). The share of SSA imports in world imports was 3.2% in 1980, 1.6% in 1990, 1.2% in 2000, with a slight improvement in 2004 (1.4%). Although from a different database, that of the WTO, merchandise exports from Africa had increased from 2.4% of the world total in 2003, to 3.5% in 2008, this was not only true of Africa but was a feature of many resource-rich regions in the world.
This increase was largely due to strong advances in commodity prices particularly because of demand from China, and could be a temporary change rather than a long term trend. This is because China is mainly driven by a quest for natural resources and the securing of the energy vital to its growth: this is unlikely to change and may perhaps even encourage the specialisation of SSA in commodity production and exports.
The relatively poor performance of Africa’s share in world trade over the previous decades has not happened by chance. By means of a combination of multilateral and bilateral agreements, the IFIs and the WTO, during the past 20 years, have succeeded in forcing open the domestic markets of most countries in Africa. The normal mechanism is that of advancing generous loans and other forms of aid at high rates of interest and tied to conditionalities which in turn provide the route for the entry of short-term speculative capital and dumped manufactured goods. The effect of this deliberate policy is de-industrialisation, i.e. the destruction of infant industries many African countries. Through the lowering of import tariffs and the privatisation of state-owned and parastatal enterprises, among other mechanisms, the sovereignty of the national state is circumscribed and, in effect, the national government becomes sucked into globalisation and transnational business.
The authors contend that the WTO has not addressed in depth the specific problems created by commodity dependence in SSA countries, including the Doha Round, and state that SSA countries face many difficulties in making their interests recognised. The weak negotiating position of SSA countries within the WTO has indeed been often highlighted, which is associated with their limited participation in the system. This because of the way in which the WTO operates. While in principle each WTO member has equal voting rights, in practice voting rarely takes place because consensus is regarded as the only method for reaching decisions in the WTO. Since the inception of the WTO in 1994, US-EU agreement, joined typically by their partners in the Quad group, Canada and Japan, is necessary before any negotiated WTO agreement can be achieved. Thus if a particular economic outcome is not perceived to be beneficial to the economic giants within the WTO, it will not be approved. To the extent that power-based bargaining determines the process of forming a consensus in the WTO, the system has been described as “organized hypocrisy”.
The authors then examine the overdependence on commodity prices which characterise many African economies. The shrinking global economy as a result of the economic crisis post 2008 has lead to lower demand and lower prices for commodities from Africa as a whole.
Such dependence on commodities for exports is considered as negative for Africa because it generates uncertainty. This uncertainty in particular threaten SSA oil - producing countries - Angola, Cameroon, Chad, Republic of Congo, Côte d'Ivoire, Equatorial Guinea, Gabon, and Nigeria. This is because oil booms and busts are very difficult to manage in terms of fiscal deficits: financing fiscal deficits is fraught with uncertainty because there are many variables that are outside a government's control, e.g. oil reserves and oil prices.
In the context of counteracting the pervasive influence of the WTO and the IFIs, the authors then examine the present and future role of Africa’s Regional Economic Communities (RECs). These were inspired by the Lagos Plan of Action and the Final Act of Lagos, adopted almost three decades ago with the vision of an integrated Africa by the beginning of the new millennium. They envisaged that, via regional economic communities, the challenges of Africa’s poverty and underdevelopment would be overcome. The authors examine the aims and composition of the major RECs, many of which have overlapping membership, in particular the Community of Sahel-Saharan States(CEN-SAD), Common Market for Eastern and Southern Africa(COMESA) East African Community(EAC) Economic Community of Central African States(ECCAS/CEEAC) Economic Community of West African States(ECOWAS) Intergovernmental Authority on Development(IGAD) Southern African Development Community(SADC) and the Arab Maghreb Union(AMU/UMA).
The authors then examine the historical evolution of the OAU (Organisation for African Unity) into the AU (African Union), and its efforts to address important issues concerning Africa’s role in a globalising world, such as achieving better terms of trade, economic growth, resource development, and the redistribution of wealth both between Africa and the world, and within Africa itself.
Finally the authors analyse the current proliferation of Economic Partnership Agreements (EPAs) and Preferential Trading Agreements (PTAs) between the developed countries/ trading blocs such as the EU, and African countries. They question whether such agreements can enable African countries to extricate themselves from the negative features of the WTO and lead to genuine resource development, or are they simply another type of neo-colonialism? The question of whether these external trade arrangements will tend to undermine African regional integration, as pursued by Africa’s RECs and the AU, is also examined.
Chapter 10 : Sustainable African Resource Development
The authors state that, as Africa enters the 21st century, it faces mounting challenges but also significant new opportunities. Unlike the 1980s and the 1990s, the conditions for sustained resource development are much more favourable today than ever before. A significant number of African economies appear to have broken out of the old mould of economic stagnation, and are firmly on the path of faster and steadier economic growth. Obvious examples of this trend in SSA are Mauritius, South Africa, Namibia and Botswana. This is happening for a variety of interconnected reasons.
First, the implementation of harsh economic reform measures in many African nations both in the North and SSA, means that many African countries have engineered macroeconomic, structural and social policies which have contributed to improved GDP growth rates and definite progress towards meeting the Millennium Development Goals. Overall, average growth in the Sub-Saharan economies was 5.4 percent in 2005 and 2006, and the World Bank projection is 5.3 percent for 2007 and 5.4 percent for 2008. However, the global financial crisis has had a marked, negative impact on economic performance in Sub-Saharan Africa, affecting trade, foreign direct investment, tourism, remittances, and official assistance, with GDP estimated to have grown only 1.1 percent for the region as a whole in 2009 (World Bank, 2010).
Second, there is greater consensus among Africans themselves on what needs to be done to accelerate growth, eliminate poverty and promote sustainable development in Africa. As discussed in Chapter Nine, RECs, the African Union (AU) and NEPAD are driving African countries to improve governance, accept accountability for their development, increase trade both within Africa and globally, and enhance crucial resource development infrastructure such as transboundary transportation, telecommunications and electricity grids.
The third reason is that significant changes in global trading patterns and wealth distribution mean that Africa is currently benefiting from a China-driven commodity boom, accompanied by increased investment in infrastructure and the extractive mineral and hydrocarbon industry sectors, accompanied by investment by India and other East Asian economic powers as detailed in Chapter Two. Exports are booming and consumer imports more affordable. Net exports of crude oil, gas, timber, and strategic minerals have all benefited from strong Asian demand. FDI is also increasing, with China again emerging as a major provider of loans for investment in infrastructure such as roads, pipelines and railways.
This changing structure of world trade, and a loosening of the stranglehold of the West on Africa, marked by the rise of the Asian giants, which appears to be long term, offers major new opportunities for African resource development. It also means that African countries must devise innovative responses to the major challenges and opportunities that it represents. At the same time, this new phenomenon also raises several unanswered questions. How effectively can the rise of the Asian giants be utilised for longterm benefits to Africa? Will the Asians dispense with Africa when the resources, which are finite, such as hydrocarbons, timber and minerals, are finished? In other words, will the economic diversification and transformation to Africa’s resource base be sustainable?
The authors address these questions since sustainable African resource development is no longer an option but a fundamental necessity to guarantee the supply of basic human requirements for water, food, energy and shelter for future generations of Africans. However, Africa’s continued focus on resource-exploitation undoubtedly results in a worsening degradation of the physical environment, placing ever-greater stress on ecosystems and local environments. Disappearing forests, mining pollution, groundwater contamination as byproducts of hydrocarbon exploration and production, increased usage of pesticide and fertilisers for increased agricultural production, are all the tangible results of Africa’s resource development. These significantly increase the everyday risks to human health and progress such as non-potable water, soil degradation, inadequate sewage treatment, and solid waste removal, the downsides of development which must be seriously addressed by Africa’s policymakers.
To address these issues of resource exploitation, the authors maintain that to strengthen the foundations for continued growth and prosperity a new blueprint for economic transformation is urgently needed. This is because, despite decades of effort, loans and plans by governments, agencies and development partners, African economies have undergone comparatively minor structural change. In general, they still rely heavily on low-productivity agriculture for the bulk of rural employment, and, as was noted in Chapter Six, there has been no Green Revolution in African agriculture comparable to India or other Asian countries such as the Philippines. African countries have still to develop strong manufacturing bases and add value to commodities through processing and manufacturing, and put into place the complete value chain from raw minerals and commodities to finished products which are acceptable both to their own populations and foreign importers. By and large, African countries still export a narrow range of agricultural commodities and natural resources.
The authors contend that in these circumstances African economies will continue to be vulnerable to agricultural and commodity price fluctuations and other external economic shocks, as the 2008-2009 economic meltdown clearly demonstrated If Africa were to continue in this pattern of gradual poverty reduction strategies, backed by more foreign aid and funding, the existing economic structures will be endlessly duplicated. This is why, as described in Chapter Six, the recovery and sustainable growth of agriculture is one major factor fundamental for economic renewal and social transformation.
It is for the above reasons that an ambitious and comprehensive blueprint is needed to tackle the interlocking problems currently impeding Africa’s growth and sustainable resource development. This must encompass diversification of products and markets, enhancing skills and human resources, delivering technological change and constructing infrastructure, and re-engineering business processes. It must also create legal and financial incentives for small and medium-sized enterprises, the current drivers of economic change in many developed economies, to establish themselves, grow, and eventually export their products, providing jobs, foreign exchange and economic diversification. Laws and regulations governing the attraction of FDI must be re-examined and rewritten, to enhance the investment climate, with individual African governments providing investment security. This means strong government support for the legal and financial institutional framework of the economy, with a legal system in place not only to uphold order, but act as a check on government and protect basic human, property, and commercial rights.
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