Africa’s conflicts threaten potential boost coming from gas, oil and minerals findings —report
While the world concerns itself with the Syrian civil war and the dangers it poses for the already disturbed Middle East, little notice is taken of the conflicts affecting Africa – probably the single most complex region of the world and arguably the most troubled, warned the Centre for Research on Globalization (CRG) on Tuesday.
The independent research and media organization based in Montreal, Canada, says that while the continent is home to 15% of the world’s population, it only represents 2.7% of the global GDP. And this is largely concentrated in only five of 49 sub-Saharan countries.
It is estimated that, by 2015, countries in the Gulf of Guinea will provide the US with 25% of its energy needs, and Africa has at least 10% of the known oil reserves worldwide, says CRG's report.
South Africa alone has 40% of the world’s gold supply. The continent contains over one-third of the earth’s cobalt and supplies China — the world’s second largest economy — with 50% of that country’s copper, aluminum and iron ore.
The continent's overall growth was highlighted in October by The World Bank. According to the organization sub-Saharan countries are expected to grow 4.8% this year, broadly unchanged from the 4.9% growth rate registered in 2011 and largely on track.
With minerals beginning to earn hundreds of millions of dollars in windfall revenues for countries across Africa, World Bank Vice-President for Africa, Makhtar Diop, pointed out the opportunity for “strengthening economic transparency and financial controls around the new discoveries.”
He added that to leverage mineral wealth it is necessary to develop policies that increase economic growth, create jobs, reduce poverty, as well as improve health and education.
Researchers at Ernst & Young believe minerals are not the only precious resource that may boost the continent growth. In their report “Natural Gas in Africa: The frontiers of the Golden Age,” the analysts say natural gas development holds tremendous opportunity for Africa.
“[Natural gas] can be a primary driver of economic growth and broader social development, as well as a major spur for local employment growth and infrastructure development,” said Ernst & Young’s Oil & Gas leader for Africa, Elias Pungong.
While the risk rankings overall in Africa are quite high, for many countries the ‘risk trend” is improving, adds Pungong.
The study certainly doesn’t sell the market short as it concludes that “Africa’s gas reserves will be more than just headline opportunities for the national oil companies (NOCs), the deep-pocketed oil and gas majors, their big international exploration and production (E&P) counterparts as well as well-known African oil and gas specialists.”