By Ibrahima Thiam & Roland Kwain Ngam
Does resource extraction really lead to development? After over half a century of exploiting its mineral resources, is Africa reaping the full benefits of its underground resources? Also, are the short, medium and long-term benefits worth the destruction that we inflict on the environment year after year? These are the questions that Senegal is grappling with right now.
In a country where the per capita income does not exceed 1640 dollars, where the poverty rate, despite all the economic efforts made since independence (1960), cannot adequately meet social demand, where young people, who account for more than 60% of the population, venture into illegal immigration seeking greener pastures by crossing the Mediterranean into Europe and the Atlantic to the Americas; where agriculture, which employs 70% of the population, is unable to guarantee food self-sufficiency; where the unemployment rate has reached 21% ; and where economic policy is subject to the austerity policies imposed by international financial institutions such as the World Bank and the International Monetary Fund (IMF), would calling for a halt to exploiting our resources be tantamount to suicide?
Africa is a resource rich continent. However, there is no country that we can honestly point to and say that they have used their resources to develop in a sustainable and proper manner. Let us be clear, we are not among those who think Africa’s natural resources are a curse. On the contrary, they are a potential that our States can harness to drive economic growth, provided they are well managed.
However, we must ask: would the oldest continent not rather focus on unlocking its renewable energy potential now while preserving its resources until they are ready for proper management? Instead of remaining in the unprocessed export paradigm forever, would it not be more appropriate to increase beneficiation before export or preferably beneficiation for local use? Finally, should Africa not refrain from exploiting its resources until they are ready?
The economic, environmental and socio-political ambiguity of resource exploitation in Africa.
A rich continent whose riches are enjoyed elsewhere.
The African continent has some of the world’s largest deposits of mineral resource (30% of global reserves in oil, gas and transition minerals). Nearly three-quarters of Africa’s oil reserves are in the Gulf of Guinea (Angola, Equatorial Guinea, Nigeria, Congo, Cameroon and Gabon).
This is why that real estate has a high concentration of Western oil companies such as Exxon Mobil, Shell, BP, Elf as well as local ones such as Nigeria’s NNPC. The Continent holds 54% of the world’s platinum reserves, 78% of its diamond reserves, 40% of its chromium reserves and 28% of its manganese reserves.
Countries such as the Democratic Republic of the Congo (DRC), Zambia, Niger and South Africa are teeming with strategic raw materials such as copper, coltan (used in manufacturing mobile phones), uranium, diamond and gold. Africa is also home to some of the world’s largest fresh water deposits (the 6,895 km long Nile, the 230 million hectares-wide Congo Basin) as well as vast stretches of arable land, 90% of which is still undeveloped.
Africa began exploiting hydrocarbons in the 1950s with Algeria, Gabon and Congo, followed by Angola, Nigeria and Libya in the 1960s. The leading oil producer in Africa, Nigeria, generated 1.861 million barrels per day, followed by Gabon, the sub-region’s second largest producer (212,000 barrels per day). Although the exploitation of Africa’s resources had raised many hopes of better living standards for all from the sixties, most countries have never reaped any significant positive developmental rewards.
Instead, exploitation of the natural resources has become synonymous with pollution, lack of transparency, violence, corruption and so on. Apart from Botswana, it will be hard to find countries that have been any exception to this rule. The continent is littered with broken promises and arrested development.
Chinese companies in South Kivu in the Democratic Republic of the Congo prey on the local authorities’ corrupt ways and local militias’ support to access mines. Gold mining is exempt from taxation. Congolese militias use mineral wealth to obtain cash, weapons and food rations.
According to Mr Ibrahima Thiaw, Under-Secretary-General of the United Nations and Executive Secretary of the United Nations Convention to Combat Desertification (UNCCD), this situation is fuellng internal conflicts, the continuation of which benefits both traffickers and miners.
He contends that 90% of the major armed conflicts between 1950 and 2000 occurred in countries with rich biodiversity and mineral deposits. A 2003 World Bank report revealed that over the past 40 years, developing countries with no natural resources had developed two or three times faster than resource-rich countries.
The documentary Arlit further illustrates this messy legacy in another country, Niger, where at the opening of a uranium mine, the President vowed that this precious resource would turn Arlit into a city like Paris.
Today, Arlit has become a hellhole with tall mine dumps killing the local population slowly. The environment and groundwater have been contaminated. Whereas 80% of France’s energy needs depend on uranium, some of which comes from Niger, that country ranks among the five poorest countries in the world.
Nigeria is another case in point. Fifty years of oil production have made the country one of Africa’s giants…on paper. The country is an oligarchy, ruled by a small group of connected politicians and dollar multimillionaires who either made their money through oil or government tenders. The rest of the country lives in abject poverty.
Nigeria’s oil and gas legacy includes the pollution of the Niger Delta, the destruction of fishing and agriculture (between 2011 and 2017, almost 18 million litres of crude oil contaminated the soil and water of Africa’s largest mangrove swamp), insecurity and militarization, corruption and so on.
The country is a hotbed of religious, ethnic and environmental conflicts and crises. A total of 112 million Nigerians live on less than $1.90 a day; 10 million do not attend school, 130 million are without sanitation facilities, and 57 million have no access to drinking water.
Yet, Africa seems to be the new destination for Western leaders looking to expand the frontier of capital accumulation. Natural resources are the primary incentive driving this new interest in Africa. The statistics bear this out.
According to The Economist, 320 foreign embassies opened in Africa between 2010 and 2016. China, for example, increased its investment by 226%, India by 292% and Europe by 41%. In addition to mining contracts, military agreements are also being signed every day. Russia’s Wagner Group is the poster child of this new privatisation of security on the continent. The discovery of gas and oil, especially against the backdrop of the European energy crisis due to the war in Ukraine, has made Senegal a highly sought-after country.
The long-awaited take-off of oil and gas production in Senegal is viewed by most Senegalese as a turning point in a new economic era for the country. Off the coast of Saint-Louis, along the Senegalese-Mauritanian border, BP has built gas extraction facilities with the aim of liquefying the gas in a terminal and selling it as liquefied natural gas (LNG).
Production is due to start in 2023, with an initial capacity of around 2.5 million tonnes per year. This figure is set to rise to 10 million tonnes a year in the long term. Senegal expects revenues from gas extraction to reach CFA F 888 billion (around €1.4 billion) between 2023 and 2025.
Cayar, a fishing village situated more than 65 kilometres from Dakar, is where Senegal’s first offshore oil field, Teranga, is planned to be located within the Cayar Offshore Profond block. It is almost 100 km south of Guembeul-1 in the St Louis Offshore Profond block. The Cayar gas reserves are estimated at 1,400 billion cubic metres.
The Sangomar field, which contains both oil and gas, is 100 km from Dakar. It covers an area of 400 km2, with water depths ranging from 700 to 1400 m, and has a production capacity of 230 million barrels of crude oil.
However, the oilfields are situated opposite the Saloum delta, home to around twenty islands whose main economic activities are fishing, oyster harvesting and processing by women (4,800 women ). The Saloum delta is a UNESCO World Heritage site with marine protected areas, parks, and pristine water sources.
In Saint-Louis, Cayar and the Saloum delta, public discussion is no longer about the effects of climate change destroying their homes and biodiversity but about the consequences of future oil and gas extraction by Senegal.
Undoubtedly, these fishing areas will suffer the effects of exploitation, as they are located in fish-rich areas. The mood in Saint-Louis is not so much one of euphoria as a concern – the worries of a fishing community that has been fishing in the region for a thousand years. For these people, fishing is not just an economic activity but also part of their culture, with its attendant ritual, recreational and social dimensions.
Fishing is closely linked to the prevailing forms of community life. Fishermen share particular types of solidarity – for example, they always provide fish for retired fishermen who can no longer work. A fisherman’s whole life revolves around catching fish. Religious ceremonies, meetings and baptisms all follow the fishing calendar. When an old fisherman dies, it is not uncommon for part of his canoe or fishing boat to be taken out and used to mark his grave.
Over 20,000 canoes fish along Senegal’s 700 kilometres of coastline, where they compete with around 160 industrial fishing boats. It is the same story in other fishing areas. Cayar has a natural trench measuring over 1,235 metres deep and 3,000 metres wide. It is a fish breeding ground that has become a marine protected area stretching over 171 km2.
Senegal’s fisheries sector generates more than 600,000 jobs and is worth around CFAF 200 billion. Despite the challenges posed by the presence of foreign boats and climate change, small-scale fishing accounted for 525,108 tonnes of fish in 2021, equivalent to 15% of the total working population. Can such a sector compete with oil and gas production in Senegal? If the Senegalese government decided to forgo oil and gas production for fishing, it would be for ecological rather than economic reasons.
As was pointed out at the start of our work, could a country like Senegal afford to do this to protect the climate and help save the planet? Such an outcome is highly unlikely given the commitments already undertaken by the State of Senegal in the areas of research, platform installation and exploitation.
“We have an agreement with the G7, through the Just Energy Transition Partnership (JETP), in which Senegal undertakes to increase the share of renewable energy to 40% (of the country’s mix) by 2030 ”
However, because of the energy crisis in Europe, Germany is very interested in Senegalese gas.
Developing infrastructure projects to produce liquefied natural gas (LNG) in Africa is closely intertwined with European countries’ dependence on fossil fuels. Not only does this not help our countries to get out of debt, it also delays their transition to renewable energies. This is not merely a climate issue, but we have to assess the results of more than 60 years of hydrocarbon exploitation to be sure that history is not repeating itself yet again.
As part of its policy to promote renewable energies, the State of Senegal made a commitment alongside Germany. Promises were made to connect 168 MW of solar PV, 51 MW of wind power and 75 MW of hydroelectricity to the grid by the end of 2019, accounting for 22% of the country’s total electricity production.
Senegal’s rural electrification rate is close to 42%.13,000 of the country’s 21,000 villages have not yet been electrified although the coutnry has abundant renewable energy resources, mainly solar and wind power. With technical assistance from Germany, Senegal could now hope to meet 100% of its energy needs from renewable sources. This would pave the way for the rest of Africa to move towards clean energy.
Despite its proven potential, Europe is not showing a strong interest in investing in renewable energies in Africa. Global investment in renewable energy soared by 9% year-on-year to reach an all-time high last year. However, it plummeted by 35% in Africa, which accounts for just 0.6% of the 434 billion dollars invested in renewable energy worldwide.
According to a report issued on Wednesday, 9 November, by the energy consultancy BloombergNEF (BNEF), the level of investment in renewable energy in Africa is “alarmingly low” despite the continent’s immense potential.
This report, published at the UN Climate Change Conference in Sharm El-Sheikh (COP27) and championed as an “African COP” by the Egyptian presidency, states that “only $2.6 billion in capital was committed to wind, solar, geothermal and other renewable energy projects in 2021, the lowest level in eleven years”.
BNEF further pointed out that the continent, which is still heavily reliant on polluting and costly fossil fuels for electricity generation, has fallen behind “despite Africa’s exceptional natural resources, rapidly growing demand for electricity and an improving policy framework”. Although Africa has demonstrable solar energy potential, it accounts for only 1.3% of the world’s installed solar energy capacity.
The report also highlights the significant concentration of investment in just a few countries: South Africa, Egypt, Kenya and Morocco, which have accounted for almost three-quarters of overall investment since 2010.
Michael Bloomberg, UN Special Envoy for Climate Action has lamented that Investment in clean energy in Africa is at an alarmingly low level.
He adds that “changing this will require new levels of collaboration to identify viable clean energy projects and provide them with more private financing and public support in order to turn Africa’s potential as a world leader in clean energy into reality”.
Some experts from the Global North believe that there are a number of barriers restricting the roll-out of renewable energies in Africa, including poor understanding by national investors of the opportunities in the sector and a lack of planning to promote the expansion of electricity grids. They recommend drawing inspiration from countries that have successfully cleared these hurdles, highlighting, for example, success stories of tenders in Brazil and the support provided by Mexico’s national development bank.
The Africa Climate Summit made a lot of advocacy around unlocking carbon markets and green and blue bonds for Africa. Kenya’ President William Ruto implored Western leaders at the event: “we can help others achieve their net zero objectives”.
The world has adopted ambitious cuts to CO2 emissions in order to limit global warming to 1.5 degrees relative to preindustrial levels. That requires bold Nationally Determined Contributions from all countries. It is in this regard that the cry of “keep it in the ground” has grown louder everywhere.
However, a number of things must be said. Firstly, African countries must decarbonise because they believe that it is the right and most efficient thing to do and not because they are being forced to do so.
Decarbonisation in Africa cannot just be because other countries are struggling with their political constituencies and so Africa is needed to step in once again to do the heavy lifting. Doing others a favour does not in any way help the planet to cut down on emissions.
In the same way African leaders ask for accountability from foreign nations, they too much uphold the highest standards of accountability within their own borders. Too often, the right to say no is trampled upon. Most African countries have adopted legislation showing that a country’s underground resources belong to the central government. Some recognise the leasehold owner’s rights over the land. This typically does not translate to a community having the ability to say that natural resources found in their area belongs to them and they will figure out what is good for them before they decide what to do with it, as the Xolobeni example in South Africa shows.
Also, Africa cannot decarbonise without the necessary support from the countries that are responsible for the biggest levels of pollution since the start of the modern economic era. The countries that are guilty of unprecedented levels of pollution, toxic dumps on farmlands and in river sources, CO2 dumps in the atmosphere and the worse kinds of brutality against Global South countries must work harder to help these countries achieve their net zero objectives.
Western countries must quickly open up their countries to provide African towns and villages with the credit that they need to build resilient communities and infrastructure. If this support is not forthcoming, can anyone blame African countries for turning to coal and gas?
Ibrahima Thiam & Roland Kwain Ngam works with Rosa Luxembourg Stiftung in Dakar and Johannesburg, respectively.