Archives for posts with tag: Oil

While much of this blog so far has been concerned with thinking about all the projects in Africa to build new commercial planned cities that will house the homes and offices of businesses making profits from Africa’s resources and nascent retail-hungry middle class, it’s important not to be overly focused on either these headline grabbing, secure, infrastructurally sound enclaves that attract international businesses, nor too focused on the surrounding slums they juxtapose, but to remember the array of roads, pipes, and wires that the country and partnering corporations depend on to actually run their operations in the country. This infrastructure, found in the form of airports, port, roads, power plants, trains, internet cables and cell towers, has the potential to either breach the gap between the wealthy enclaves and the rest of the country by building up infrastructure throughout a interconnected nation, or to further cut-up and cut-off communities from privileged bunkers like Eko Atlantic. This article in the New York Times about the “illegal” tapping of oil pipelines in Nigeria’s Delta region touches on an example of the latter. I’ve been reading Helon Habila’s novel Oil on Water, which has a moving descriptions of the effects of Shell and BP’s oil extraction on the people who made their homes in the delta region:

There are countless villages going up in smoke daily. Well, this place, Junction, went up in smoke because of an accident associated with this vandalism, as you call it. But I don’t blame them for wanting to get some benefit out of the pipelines that have brought nothing but suffering to their lives, leaking into the rivers and wells, killing the fish and poisoning the farmlands. And all they are told by the oil companies and the government is that the pipelines are there for their own good, that they hold great potential for their country, their future. These people endure the worst conditions of any oil-producing community on earth, the government knows it but doesn’t have the will to stop it, the oil companies know it, but because the government doesn’t care, they also don’t care. And you think the people are corrupt? No. They are just hungry, and tired. (p. 103-104)

That’s a powerful paragraph. Are these pipeline puncturers democratizing oil in Nigeria, or stealing from their country? Not easy to answer and probably not even a productive question in light of Habila’s illumination of the situation, but the whole complexity of the situation speaks to the infrastructural challenges places like Nigeria have beyond the edges of their slowly improving cities…will people continue migrating into the cities until the countryside simply a battlefield between the remaining petro-rebels and corporate backed national armies? Th violence in Southwest Nigeria has calmed down since the 2007 amnesty for rebels, but still that does not seem to be an impossible dystopian vision of the future. Roads and train tracks carved through places like the Serengeti or other communities and neighborhoods while leaving others off the map have similar problematic effects that have to be considered during planning. On a different note, looking at the images from the nytimes article about oil tapping, it’s not difficult to link the images of oil soaked landscapes and overflowing buckets of oil to how a cancer-epidemic is developing in much of Africa (chronicled in Botswana by Julie Livingston who ties it to what she calls “toxic capital”). In other places it’s savvy but hazardous activities like burning old computers without ventilators to collect and sell the medal inside them, and other places it’s simply the lack of car emissions testing, constantly dousing people in toxic fumes. And then there is the lack of medical infrastructure and treatment for this and other epidemics…

Image

Image Source [Akintunde Akinleye/Reuters]

Advertisements

I recently had a chance to read McKinsey’s 2010 report on Africa’s economic outlook and another on what, in their view, makes a “good city.” Here are a few things that stuck out to me:

MGI Report on Africa

-Currently there are 52 African cities with more than 1 million people (as many as Europe)

-By 2030 50% of Africans will live in cities (already more Africans (40%) live in cities than Indians (35%), and the continent is not far behind China’s 45%)

-From 1990-2008 African trade with Europe and N. America declined (51% to 28%, and 16% to 15% respectively) while trade with China grew from 20% of total African trade to 28%

-China’s infrastructure commitments in Africa now surpass the World Bank’s (11.6 billion in financing in 2006 and 2007 versus 4 billion from the WB over that same period)

-The African labor force by 2040 is expected to be 1.1 billion (Larger than China’s or India’s, and every continent’s outside of Asia)

-Effective education is still sorely lacking in Africa (test scores have actually declined or stagnated for much of the continent) while its governments spend nearly 20% of their budget on education versus 11% for OECD nations.

-Africa’s largest oil exporting nations (Nigeria, Angola, Libya, Algeria) have dangerously undiversified economies compared to their international peers (Malaysia, Indonesia)

-23% of Africa’s largest resource deals now have an infrastructure or industrialization component, up from 1% in the 90s. For example, China’s 2008 deal with the DRC for cobalt and copper included 2.9 billion to construct 3200 km of railways, 31 hospitals, 145 health centers, and 2 universities (I’d like to know how much of this has been completed).

-African daily oil exports to China have quickly risen from 1% in 1995 to 13% in 2008 (the US and Europe receive 30% and 37% of Africa’s oil respectively)

-African governments (65%), private sources (25%), and foreign aid (10%) combined are currently investing around $72 billion per year in new infrastructure across the continent. Still the continents infrastructure is only somewhere between one half to a fifth of Russia, Brazil, China, and India’s. The report estimates that the continent needs to invest $118 billion a year to catchup and keep pace with its economic growth ($46 billion more per year than it currently invests). Chinese and private investment could help reach this goal, as both sources are increasingly at double digits rates.

-In 2008 37% of Africans had mobile phones, 39% had access to electricity, and 63% had access to improved water sources, versus 48%, 84%, 89% average for each those categories in Russia, China, Brazil, and India.

A few thoughts on the report:  it’s troubling how critically lacking Africa is in basic education compared to other areas of the world…this lag is what I would predict to continue to create instability in many African countries–under educated citizens are more likely to be easily manipulated by politicians who play up “tribal” or other divisions to instigate violence. This lag can be traced to the state colonialism left Africa at independence when many African countries (like the DRC in particular) had less than a dozen university educated citizens in the whole country. Now many of the few educated Africans leave the continent for better opportunities for them and their families in America and Europe, creating a serious brain-drain—I’m curious if this recent narrative of “Africa Rising” is bringing many of those doctors and business people home like what happened in Rwanda once Kagame stabilized the country and opened it up for businesses. The article also seems to find optimism in Africa’s rapid urbanism primarily because of the consumer focused business opportunities it creates when so many potential customers are bunched closely together in a city. Is this what cities are to businesses? Places to export resources and sell people cheap stuff? Doesn’t that sound like the model of the slave trade in west Africa? Why don’t business perspectives like McKinsey see cities as places where services can be more effectively delivered or hubs for better education that can lead to more stable nations and thus better business locations? Again it’s going to come back to well educated and savvy leaders in Africa who can make business deals that provide substantial infrastructure and education improvements in exchange for resources. Highlights from McKinsey’s city report will be up soon.

Image

Image Source