In this post, we will be looking at Natural resources in Africa, Oil and gas, minerals and other natural resources. Also the challeneges facing African nations with their rich resources and things Governments need to get right.
INTRODUCTION
Africa has significant natural resource wealth. The continent holds more than half of the world’s rare minerals and is rich in both renewable and non-renewable natural resources. Natural resources are materials from the Earth that are used to support life and meet people’s needs. Any natural substance that humans use can be considered a natural resource. Oil, coal, natural gas, metals, stone and sand are natural resources. Other natural resources are air, sunlight, soil and water. Animals, birds, fish and plants are natural resources as well.
Africa is home to approximately 30% of the world’s entire mineral reserves. While some countries rely on oil, some are rich in diamonds, and others in gold, copper, cobalt, coal, iron ore, uranium, and others. South Africa, Nigeria, Algeria, Angola, and Libya produce more than two-thirds of Africa’s mineral wealth, owing to their large oil reserves, with the exception of South Africa, which has an abundance of gold and other precious materials.
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Report also indicates that high prices for copper, oil, iron ore, aluminum, and gas will encourage investment and all are contributing to reducing external imbalances, stabilizing currencies, and boosting economic development. Commodity prices are driving an export boom across the continent.
In addition, about 30 per cent of all global mineral reserves are found in Africa. The continent’s proven oil reserves constitute 8 per cent of the world’s stock, while those of natural gas amount to 7 per cent. Minerals account for an average of 70 per cent of total African exports and about 28 per cent of the gross domestic product.
Natural resources of Africa
Africa are home to nearly all valuable minerals that are essential to generating wealth, producing commodities, and advancing technology. Several African nations have prospered because of their mineral resources, some more so than others. Africa has a large quantity of natural resources, including diamonds, sugar, salt, gold, iron, cobalt, uranium, copper, bauxite, silver, petroleum, and cocoa beans, but also tropical timber and tropical fruit.
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Africa Natural Resources is also an agent for Petroleum product trading of Crude oil, Petrol, diesel, kerosene, and/or any petroleum products under a company approved by the Nigerian National Petroleum (NNPC) Oil Refinery.
Africa is a major producer of important metals and minerals. Metals exported by African countries include uranium, used to produce nuclear energy; platinum, used in jewelry and industrial applications; nickel, used in stainless steel, magnets, coins, and rechargeable batteries; bauxite, a main aluminum ore; and cobalt, used in color pigments. Africa’s two most profitable mineral resources are gold and diamonds. In 2008, Africa produced about 483 tons of gold, or 22 percent of the world’s total production.
Oil and minerals in Africa
Africa is home to select deposits of oil and natural gas, which are drilled for energy and fuel. In 2007, the continent produced 12.5 percent of the world’s total oil production and 6.45 percent of the world’s total natural gas production. Nigeria, Libya, Algeria, Egypt, and Angola dominate Africa’s oil industry. Oil exploration has significantly increased on the continent, and many countries are looking to become first-time producers.
Africa has 30% of the remaining mineral resources in the world. 57% of Africa’s export earnings comes from hydrocarbons. From 1980 to 2012, proven oil reserves in Africa grew by 150%. Earnings from recent oil, gas and mineral discoveries could lead to an increase in government revenues of between 9 per cent and 31 per cent in the first 10 years of production in countries like Mozambique, Tanzania and Uganda.
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Natural resource and poor governance
Africa’s natural resources provide a unique opportunity to foster human and economic development. However, Africa suffers from the paradox of plenty, meaning that abundant endowments of natural resources do not lead to equivalent levels of prosperity, broad-based development and resource-based industrialization. One key obstacle preventing African countries from realizing this potential is poor governance. Poor governance refers to the lack of strong institutions and weak policies, aimed at short-term gains rather than at long-term development objectives.
The level of poverty in most resource-rich countries in Africa has not been reduced, as predictions based on their economic growth performance would suggest. As a case in point, most resource-rich African countries have some of the largest gaps between income and human development as reported in the Human Development Index (UNDP 2016). Overall, the wealth of natural resources has not yielded positive benefits in terms of inclusion and poverty reduction in Africa.
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Things Governments Need to Get Right.
The three key priorities Governments Needs to Get Right includes:
- Protect the rights of communities and citizens: When drilling or mining starts, communities often face negative economic, social and environmental impacts. In many cases, the failure to respect and protect communities’ rights is a major cause of conflict. but ensuring the right of free, prior and informed consent is essential to prevent negative consequences, conflicts and disruptions.
- Give communities their fair share: Most African countries are not getting a fair share of the value of their mineral and hydrocarbon resources, and this is exacerbated by histories of poor governance and corruption. A few people continue to capture the profits from resources that should serve the majority of citizens’ needs. We’re focusing on transparency—shining a light on contracts, revenues and payments companies make to governments—and tracking how this money is spent as a means to improve accountability.
- Address the negative impacts on communities and the most vulnerable: Natural resource development can have negative social, environmental, and economic consequences that can devastate communities, especially the most vulnerable. Environmental and social impacts of extraction can have long legacies—with some environmental health impacts, if ignored, being experienced two or more generations into the future. Government should focus on reducing these impacts through improved, independent, Environmental and Social Impact Assessments before operations begin. This will encourage companies to clearly identify their likely effects on the most vulnerable and take measures to minimize them.
CONCLUTION
Despite the fact that Africa is expected to be faced with increased risks brought on by rapid increases in commodity prices and inflationary pressures. Regardless, the continent will continue to be a key exporter of a number of commodities.