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Africa
12 Jun 2015

Extractives industries in Africa: Blessing or Curse?

Oil and gas exploration equipment near Arabuko Sokoke Forest, Kenya. Can there be a balance between extraction and ecosystem needs? (Photo: Nature Kenya)
By Ken Mwathe

As the world’s second largest continent, Africa holds a huge proportion of the world’s natural resources. The African Development Bank estimates that 30% of the world’s mineral reserves are in Africa. The continent has 8% of the world’s natural gas reserves, 12% of its oil reserves, 40% of its gold and between 80and 90% of its chromium and platinum.  Africa’s fish exports are valued at US$3 billion annually, while, cumulatively, forests contribute an average of 6% of Gross Domestic Product (GDP) in Africa. 

In 2013, the direct contribution to Africa’s economy of tourism, including travel and leisure activities, was US$71.6 billion or 3.6% of the continent’s GDP. Mining and oil accounts for 28% of the continent’s GDP. Cumulatively, it is estimated that Africa earns more than US$168 billion annually from minerals and mineral fuels.

In spite of its immense wealth, it is doubtful that Africa’s resources are benefitting African communities. A 2015 report by the African Union High Level Panel on Illicit Financial Flows from Africa¹, reveals that Africa loses over US$50 billion annually through illicit financial flows: that is the amount of money that illegally leaves the continent through tax evasion, profit shifts by corporates, corruption, trade and services mispricing through multinational companies and other criminal activities. The report says, cumulatively, over the last 50 years, Africa has lost amounts estimated to exceed US$1 trillion.  Ironically, this amount is roughly equivalent to all financial aid received by the continent during the same period.

Another source of concern is the impact that the Extractive Industry is having on biodiversity, ecosystems and local communities. Across Africa, case studies abound  in which extraction of minerals, forest products, oil and gas has left devastated landscapes and disillusioned communities. Is there a middle ground? Can extraction of resources positively contribute to national economies while also respecting the needs of ecosystems, biodiversity and people?

BirdLife International, IUCN and WWF came together recently to try to address this very question. Concerned by the scale and rate of expansion of extractive induutry activities in Africa, the coalition brought this issue to the discussion table during the 15th Session of the African Ministerial Conference on the Environment (AMCEN), held between 2 and6 March 2015 in Cairo, Egypt. 

The BirdLife/IUCN/WWF team at AMCEN 15 in Cairo (Photo: Marie Gurney-Parramon)

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In Cairo, BirdLife, IUCN and WWF mounted a side event with the objective of supporting dialogue between governments to share experiences, best practice and guidance on the sustainable development of extractive industries, using examples drawn mainly from the oil and gas subsector. 

Panelists shared experiences of multi-stakeholder efforts to improve strategic and regional planning for extractives in West and Eastern Africa. They demonstrated how challenges posed to biodiversity and ecosystems by oil and gas development can be addressed. Examples of integrated cross sectoral approaches, promoting collaboration between government, NGOs and the private sector in Mauritania and development of a regional framework for collaboration around the Northern Mozambique Channel building on the Nairobi Convention, were presented. The organisers also shared an overview of tools, best practices and guidance appropriate for each stage in the extractive development process, particularly focusing on the importance of the strategic planning phase.

Participants at the Side Event at AMCEN 15 in Cairo, Egypt (Photo: Ken Mwathe)

Simon Gear, the Policy Manager at BirdLife South Africa (BLSA, BirdLife Partner) said: “This is the first step in a long process. It is critically important that this conversation has started at this key environment ministers’ forum. The next step is to agree how this exchange will move forward, including within the AMCEN and United Nations Environment Assembly (UNEA) contexts, bringing on board the private sector. We will also make the tools and guidance available to industry.”          

BirdLife International and its collaborators are committed to providing technical expertise in order to ensure mainstreaming of issues concerning biodiversity and people in the planning and development of extractive industry projects in Africa. 

The wealth from Africa’s natural resources can be turned from a curse to a blessing, after all.

 

Story by Ken Mwathe - Ken.Mwathe@birdlife.org

 

[1] www.uneca.org/publications/illicit-financial-flows