Energy Crisis
This synopsis briefly explains the challenges faced by African countries with emerging oil and gas industries in bringing widespread economic advancement to their countries. Although, on the surface, the challenges appear straightforward, in essence they often prove to be very taxing and intractable. They are closely interrelated and, regrettably, have lingering consequences, which have come to be known as the 'resource curse'.
At core the task facing these countries is how to ensure that the investment and rewards that ensue from oil and gas exploitation do not turn into this curse, working as a destructive force dividing civil society and government, spawning malpractices and benefiting only a chosen elite.
Managing expectations
When a country discovers oil, the first challenge it faces is the need to manage the expectations of its citizens. Many people in the country will at once form the impression that they will become rich, especially the politicians in the capital and the populations living around the drilling sites. To counter this misapprehension, the government of the day should make sure that all relevant information, such as exploration costs, the volume and quality of the discovered reserves, and the payment agreements, is made public. The government should publish what percentage of the profits from the sale of oil will go into the national budget, what percentage will be set aside for development programmes and what will go into a sovereign wealth fund. Currently much of this information is never made available, resulting in mistrust between civil society and the government.
Moreover, many developing countries fail to tell their citizens that oil revenues are a time-limited phenomenon and the country must take advantage of the years of income from hydrocarbon exploitation to expand its agriculture and industry. It must be made clear that the resource is finite and so are the streams of revenue that result from it. Any long-term added value that
At core the task facing these countries is how to ensure that the investment and rewards that ensue from oil and gas exploitation do not turn into this curse, working as a destructive force dividing civil society and government, spawning malpractices and benefiting only a chosen elite.
Managing expectations
When a country discovers oil, the first challenge it faces is the need to manage the expectations of its citizens. Many people in the country will at once form the impression that they will become rich, especially the politicians in the capital and the populations living around the drilling sites. To counter this misapprehension, the government of the day should make sure that all relevant information, such as exploration costs, the volume and quality of the discovered reserves, and the payment agreements, is made public. The government should publish what percentage of the profits from the sale of oil will go into the national budget, what percentage will be set aside for development programmes and what will go into a sovereign wealth fund. Currently much of this information is never made available, resulting in mistrust between civil society and the government.
Moreover, many developing countries fail to tell their citizens that oil revenues are a time-limited phenomenon and the country must take advantage of the years of income from hydrocarbon exploitation to expand its agriculture and industry. It must be made clear that the resource is finite and so are the streams of revenue that result from it. Any long-term added value that