Emerging oil producing countries cautioned against foreign oil firms
Nigeria’s Minister of Finance, Dr Ngozi Okonjo-Iweala, has asked emerging African oil producing countries such as Ghana to be cautious in entering into contracts with foreign oil firms.
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Dr Okonjo-Iweala, who for four year was the Managing Director of the World Bank Group, said Africans must first invest more in building their technical capacities and improve on their negotiation skills before entering into oil contracts.
She was presenting a paper on; “What Africa Should Do To Claim the 21th Century”, at the J.A. Kufuor Foundation Lecture Series in Accra last Friday.
Dubbed the Global Development Series, the lecture was the second since the establishment of the foundation, which is premised on three foundation pillars, Leadership, Governance and Development.
The vision of the foundation is to serve as a vehicle for the continued development and consolidation of leadership and democratic governance in Africa.
In her lecture, which traced Africa’s gradual economic recovery from the doldrums to its present promising state and the problems that must be addressed to get things right, Dr Okonjo-Iweala, who is also the Co-ordinating Minister of the Economy for Nigeria, came up with the usual Nigerian jokes.
For instance, she said anytime she, as the Finance Minister, presented a bright outlook for the Nigerian economy, the ordinary Nigerian would retort, “Ibi GDP growth we go chop? Nonsense!”
For her, the ordinary Nigerian was right in expressing his or her frustration in such a manner because economic achievements must reflect in the lives of the people.
Present at the lecture were former President J. A. Kufuor and his wife, Mrs Theresa Kufuor; the Minister of Finance, Mr Seth Terkper; the National Security Coordinator, Lt Col Larry Gbevlo Lartey, as well as the leadership of some political parties.
On her advice to oil-producing nations, Dr Okonjo-Iweala, whose country started producing oil in 1958, said the production of oil created “few jobs and also limited economic diversification”, saying that before its first shipment of oil in 1958, 64 per cent of Nigeria’s Gross Domestic Product (GDP) was from agriculture and five per cent from manufacturing.
She said by 2010, agriculture’s contribution to Nigeria’s GDP had shrunk to 40 per cent and that of manufacturing contracted to about four per cent.
She, therefore, urged African countries to emulate the example of Norway, which had a lot of oil but had diversified its economy, resulting in the creation of some of the world’s best manufacturing, shipbuilding and service industries.
Another issue the economic expert spoke about was Africa’s behaviour towards the threatening and devastating phenomenon of climate change.
Quoting from scientific research findings, she explained that the African continent had become warmer by about half a degree in the past century, whereas annual average temperatures were likely to rise between 1.5 and four degrees Celsius in this present century.
Some of the consequences, according to Dr Okonjo-Iweala, were beginning to emerge, noting, for instance, that in 2000, Mozambique lost about $550 million as a result of flooding which reduced the country’s GDP by about 1.5 per cent.
She said Nigeria recently lost $700 million as a result of floods which affected 22 out of the 36 states and displaced about two million people.
In 2011, total grain production in Mauritania, Chad, Niger and The Gambia decreased by over 25 per cent due to low rainfall she noted, adding that some of the predictions were that up to 20 per cent of Africa’s arable land would become less suitable for farming by the end of the century.
Dr Okonjo-Iweala urged African nations to take the problems of climate change seriously because the Africa remained vulnerable to adverse weather shocks which could directly impact food production and prices and plunge many households into poverty.
Story by Donald Ato Dapatem