Africa’s Rich Oil: The New Political Scramble

…and Core Causes for Conflict Around The Continent [Part ll]

By: Josephus Moses Gray

The African continent which is sanctified with riches is drawing new interests from powerful and influential countries and companies around the globe owing to its riches especially the high quality of oil and wealth. These countries and major actors nowadays see the continent as the most promising place in the world for new production since it doesn’t have the huge deposits that the Middle East and Russia do, but what it does have is accessible and largely unexploited rich oil and wealth. The continent oil’s high quality makes it relatively inexpensive to refine.

But most Africans are seeing little benefit from this influx of oil drillers and investment; in fact they are often hurt by exports of their countries’ oil and other riches. For instance, between 1970 and 1990, countries without oil saw their economies grow five times faster than those of countries with high quality of oil. A classic example is Equatorial Guinea and Gabon, these two neighboring countries with abundant of oil and riches are rated among the poorly nations. This is directly due to abuse of riches by the corrupt elites, politicians and foreign capitalists.

However, part two of this article aims to scrutinize the claim that Africa is facing a New Scramble squally due to its high eminence of oil; analyzing the nature of the economic and political changes at work, the importance of Africa’s riches, and the political and economic forces behind the new oil rush. It also presents  an in-depth, incisive analysis of critical issues in Africa and beyond such as the new scramble for the continent’s richer resources, and the core causes for poverty, corruption, bad governance and sparse distribution of oil wealth, thus using various moral lessons drawn concerning the present-day realities of the struggle for wealth.

Part one which was published few months ago started with an overview of the phenomenon labeled by some as the ‘New Scramble’. The main body of the article evaluates the existence of a new scramble for the continent oil. Finally, by analyzing the likely impact on the economies of oil-producing states, it considers whether we should dismay or rejoice over the ‘new scramble for Africa’ oil. It further wrap up that the on-going existence of a oil scramble or a US–Chinese pursuit for Africa should be treated with some caution, while the economic impact of oil investments is likely to be bleak. So far, most of the attention has been focused on the struggles by external forces for Africa’s riches with the continent oil’s high quality at the center of the new scramble. Yet, it is important to critically examine the struggle for the control of oil in Africa, and the ways in which these connect with the broader global structures, actors and processes. This struggle has several dimensions, but it is often represented as pitching centralized control of oil revenues such as by a centralized state or dominant elite or group to the exclusion of marginalized groups or regions. The foregoing underscores the close intimacy between state and oil oriented power or agency, and the nature of the fractional squabbles over oil revenues on a national scale, which imposes centralist logic on the control and distribution of oil rents. The result of a centralist imposition of control from past experience is both the intense horizontal struggles for access to, and control of a larger share of oil rents, but more fundamentally, vertical struggles between the marginalized and oppressed groups and the corrupt foreign capitalists, egocentric politicians or oil elite privileged individuals. These struggles also underpin the privileged class formation process mostly through strategic locationing in the distributive circuits of the politics of the oil-state often carried out through primitive accumulation activities. As such the premium on controlling political power is very high, leaving virtually no incentive or space for the democratization of state-society relations. Such features can be gleaned from politics in Nigeria, Angola, Algeria, Southern Sudan, Sudan, Chad, Gabon and Equatorial Guinea, just among few countries.

Photo: Investmenteurope.net

Another dimension of the struggles over oil is the relationship between foreign oil companies and national capital in African oil blessed-states, there are also competitors in those African countries where a petro-bourgeoisie is emerging, and seeking incorporation into a transnational capitalist class. This is most visible from the policies of most African governments. This effort at building indigenous oil-elite can be gleaned from several policies intended to benefit few instead of the largest society on the continent. There is no doubt that the leverage given to most of these companies run by corrupt foreign capitalists, gluttonous politicians and advantaged elite class has partly fed into a new kind of economic nationalism, driven by the quest for more profit and the political patronage. Theses botched policies are wholly attributing to poverty and suffering on the continent, where 60% of the population lived beyond poverty lines. A recent UN report shows that 85% of Africans have no access to standard pipe born water, good health care, electricity, social security benefits, sanitation facilities and good meals a day. The report further indicates that 25.8 million people of the two-thirds of the total world population suffering from HIV/AIDS live in Africa. And that Africa remains abundant in human and natural resources, but these riches especially millions generated from the sale of oil managed to enrich only a handful of African leaders and the family members, corrupt bureaucrats and their relatives and close friends, privileged individuals and foreign capitalists.

The continent riches blessed with natural resources is facing faces devastating crippling rates of poverty, hunger, and disease due to a ‘new scramble due primarily to its riches especially oil, with world’s two largest economy powers, US and China competing over access to African resources and markets in Africa. The U.S. long-standing dominance in its diplomatic ties several African countries and influence has been challenged in recent time by emerging China. Most studies explain that this is due to the changing distribution of power at several levels on the continent, while the French, British and Russia on other fronts have enforced their influences through a diplomatic tie on the continent. Most studies show that the new diplomatic maneuverings and stratagem is one of several factors responsible for the continents chronic political, economic and security problems and also the infusion of violence in several African states.

Several political pundits believe that China ties with some regimes in Africa and Chinese government aid to many African states with no strings attached policy undermine democracy, apparently can be blamed for bad governances, praetorian rule by ruling elites and vulnerability of the largest populations. But there are millions of others who hailed Sino-African partnership and believed that it results to a win-win situation, arguing that African countries stand to benefit immensely in the context of infrastructural development. However, the actual cause of the argument stands from different interpretations and perceptions, most importantly how accurate is the information they obtain or hand over to them. Nevertheless, be mindful against making a decision on the debates, I decided to refrain from discussing a particular case or situation in relationship to a specific African country or any of the big power since my doctorate dissertation which contains over 450 pages discusses the subject on hand in details, with illustration, cases and references.

What flows from the following is the complex architecture of the scramble for oil and its enmeshment with trans-global processes and actors. Given its place in the class struggles around in a rapidly globalizing world, oil is destined to be choice for power, influence and wealth. Whether the struggle with between foreign capitalists and the ruling elite or State/ Indigenous private oil capital, the contestations are framed within highly inequitable relations of production and distribution, which deepen existing social contradictions within Africa, and further complicate any prospects of social transformation, or the democratization of state-society relations. Beijing‘s recent engagement in Africa has attracted a lot of attention and become a major economic force in Africa with a big amount of trade, investment and aid. Some critics especially from the West often use a double-standard to measure the Chinese engagement in Africa compared with the Western one. But also many people from different standpoints believe Chinese action to be beneficial to African development and help to empower the huge population on the continent. But from a critical point of views, China serves as both an opportunity and a challenge. The opposite side claims Chinese-African relations were established long before China‘s need for raw materials on the basis of mutual sympathy and common development instead of colonization.Africa is frequently viewed as a loser in the process of economic globalization. Writers have emphasized that Africa is of little relevance ‘because no important economic interests are greatly affected’.

Photo: Inchinclose.com

But Africa’s oil and gas is one of the few outstanding exceptions to the perceived insignificance of Africa. Some capitalists predict that the United States will soon depend on Africa for a quarter of its total crude oil imports, and Africa already accounts for more than a quarter of China’s oil imports nowadays. Oil experts have revealed that unless geologists succeed in finding new and so far unidentified provinces, as consumers we will all be dependent on supplies from just three areas — West Africa, Russia and, most important of all, the five states around the Mideast. Part three of this article which appears very soon will discuss in-depth the strategic interests of several powerful countries in Africa’s oil rich nations. Let us not forget that the new scramble by Washington and Beijing is also drawing a new challenge from other actors from other countries including emerging economies such as Malaysia, South Korea, Brazil, and India. In March 2006, the ex-president of South Korea, Roh Moo-hyun, visited three resource-rich African countries, which according to a South Korean minister had a clear rationale: ‘Closer cooperation with Africa’s oil producers will help South Korea diversify its petroleum import sources, while Brazilian’s former president Lula da Silva has made a number of trips to Africa during his turners which are thought to help in selling Brazilian goods and services to oil rich African countries and boosting Brazilian access to African oil. The prospect for oil in São Tomé Príncipe has seen the Brazilian authorities opening their first embassy on the island in 2003, in addition, Brazil has opened an oil-backed loan credit line with Angola for US$580 million for the next several years paid with huge barrels of oil a day. Malaysia and India are also making significant investments in African oil-producing countries. For instance, in 2005, India offered lines of credit worth up to US$1 billion for infrastructure projects to West African petro-states ‘in exchange of oil exploration rights’. Pounding the views that all of that newfound interest in Africa amount to a New Scramble. Also Beijing has constructed the new headquarters for the African Union, while US has allocated billion dollars as a direct aid to Africa.

More fundamentally, as a student of international relations and politics, I am of the opinion that the use of the term ‘new scramble to reference to global interest in African oil, appeared to be wrongly used since in that the original term ‘Scramble for Africa’ in the 1880s and 1890s signified a very different

process. This period witnessed European nations including Britain, France, Germany, and Belgium turn Africa into colonies following a formal partition of Africa at the Berlin conference between 1884 and 1885. The Berlin conference provided those European nations with the legitimacy to govern Africa politically, militarily, and economically according to their spheres of control (Nohra 2008). It is my understanding that access to natural resources such as oil in the colonies was dictated by the colonial power that provided the human expertise, capital, and technology to ignite the oil boom that followed.

But in his thesis, Jedrzej George argues that it has been suggested that Africa is experiencing a ‘new scramble’ thanks primarily to its oil and gas wealth, with the United States and the People’s Republic of China actively competing for access to Africa’s resources. Crude oil is one of the world’s most important strategic resources, and Africa has attracted a lot of attention among corporate and political decision-makers because of growing global oil demand. He propounded further that indeed, it has been suggested that Africa is experiencing a ‘new scramble’ primarily to its oil and gas wealth. Some capitalists and ruling elites have continue to loosely use the term scramble. in a different place, the term ‘new scramble’ had been used to refer to the expanding interests of the United States in Africa. A preoccupation with China and the United States reflects discussions in the corridors of power across the globe about a new Sino–American rivalry in Africa, coming only less than a decade after talk of a developing US– French rivalry in Africa. There is evidence of greater involvement of the United States

and China in Africa, in terms of both commercial interests and political engagement on higher diplomatic levels. According to Jedrzej George, China is currently Africa’s third most important trading partner, ahead of the United Kingdom and behind the United States and France, with foreign direct investment (FDI) to Africa from China reached Billions while Chinese crude oil imports already derived from African oil-producing countries. More than 900 Chinese companies according to studies are reportedly operating in several African countries, and Chinese trade with Africa was said to surpass US$50 billion in 2006. He also said American investments in Africa have not risen at the same exponential rates over the past decade, but they are still enormous, stressing that Washington still commends greater admiration in Africa due primarily to its diplomatic influence and authority on a world stage, with no country received great respect as US.  At the same time, oil imports such as crude and non-crude continued to dominate imports from Sub-Saharan Africa with US$40.1 billion in oil imports in 2005, accounting for 79.8 percent of all US purchases in the continent. African oil imports to the United States have been steadily rising and already account for some 20 percent of total US imports(  Huddgary 2007), saying that the United States already imports more oil from Africa than from the whole Persian Gulf. In his thesis(Gray, Josephus, 2012) pinpointed that there is some skepticism, that the present resource-rich African states and political elite may not be able to use the increased revenues to transform their economies or societies, and would more likely enrich themselves and their patrimonial networks, and seek to entrench themselves in power through forceful means. Gray’s finding which is supported by several other students of International Relations and Politics, also pictures that emerges is that while China appears to have got its act together, Africa is still searching, with the West busy sizing up the Chinese influence on the continent and exploring the options for taking advantage of it. In the final analysis, there can be no easy answers outside of a critical reading of the processes of transnational capitalist accumulation, in which oil plays a central role. The prospects of oil-rich African states emerging from the present struggle for the continent’s resources will ultimately depend of the ability of these states to transform themselves through a developmental ethos to acts as catalysts both for social and economic transformation, but perhaps more fundamentally, for the re-organization of production in the oil rich African states in ways that lift it out of its marginal position in the globalised division of labor. According to studies, most Africans are seeing little benefit from this influx of oil drillers and investment; in fact they are often hurt by exports of their countries’ oil. And Between 1970 and 1990, countries without oil saw their economies grow five times faster than those of countries with oil, Liberia is a classical example.

This much is clear from the well-known Niger Delta crisis where the struggle by the ethnic minorities for autonomy and resource control has assumed insurgent proportions with frequent attacks on

oil and government interests by well-armed militias. Apart from the militias, transnational networks trading in illegal bunkering and small arms are also involved in the struggles for oil in the Niger Delta. By blending into the state-oil company-oil community nodes of power, authority and conflict, these networks are responsible for the loss of huge percent of oil production annually. Consider Gabon, which produces over 300,000 barrels of oil a day. “It’s covered with tropical rainforest, but it’s hard to find bananas that are grown there. They are mostly imported from Cameroon. At one point, Gabon was the world’s largest per-capita importer of champagne.” The oil — and the champagne — will eventually run dry. Gabon, with relatively small reserves, is already coming to terms with that possibility. By then, much of the rest of the country’s economy may have atrophied, studies have indicated.

Photo: un.org

In conclusion, oil money tends to corrupt politicians and bureaucrats whose end up vying to pocket a share of the finite oil riches, rather than looking for ways to invest in their country’s long-term prosperity. Studies show that most oil rich’s governments aren’t dependent on income taxes and therefore don’t have to do what the citizens want, as such the state isn’t an engineer of economic growth, but a gravy train. In this case, only a limited amount of money gets down to the people.” The preceding clearly shows that although the scramble for Africa formally ended at the doorsteps of colonial rule, and independence, its spirit continues to haunt the continent as the world most powerful states, foreign capitalists, corrupt bureaucrats and egotistic actors continue to seek its resources for power, influence and domination on a global scale.

Although the Western development workers and Africa have been questing the way of development of Africa for a long time and have been seeking for a change, the reality is still disillusioning. The structural adjustment initiated by western government and adopted by African government seems to be a failure. The idea of turning to China as an alternative for prosperity has captured the imagination of many ordinary Africans, although others fear the threat of competition from the Chinese industrial juggernaut, and the rise of Chinese traders competing in local African markets. In this part two of this article, I have presented a conceptual and contextual framework, because I think it is necessary to outline some background information before discussing the issue. In part three of this article which will be released in two weeks time, I will try to explain some concepts and provide the Beijing and Washington policies towards Africa and what Africa hope to benefit from this new level of ties. Let us not forget that at the beginning of the 1960s it was fashionable then to look upon the Congo tragedy as the unique example of Belgian colonial ineptitude. Now with years of bitter experience behind us, we can say that the Congo situation pointed to all the issues which would afflict Africa from the 60 to 2000s if the issues of greed for political power and the emerging struggles for oil wealth are not carefully hand and address. Presently, about 80 percent of the crises across the continent are direct result of the struggles for oil wealth or protect against exclusion from oil resources.

The Congo gave us also the first real taste of the cold war involvement in Africa. As the Congo became a battle sound of international strife, it was unfortunately the African who bore the brunt. It was once again the Congo which gave Black Africa the first indication of the importance of diplomacy in African politics. Since the Congo-Brazzaville war in the 1960s, the continent experienced dozen of brutal wars in several countries including the Nigeria’s Biafra war, the rebels’ war in the Democratic Republic of Congo (formally Zaire), Angola, Uganda, Somalia, Ethiopian-Eritrea war, Rwanda war between the Hutu and the Tutsi, Senegal-Casamance Region, Liberia, Sierra Leone, Ivory Coast, Northern and Southern Sudan’swar, Kenya post election violence, Libyan, and now Mali, just to name few. All these wars were direct of abused of state resources and national wealth, bad governance, corruption, class system and abused of state power and authority by handful of African leaders and foreign capitalists.

ABOUT THE AUTHOR: Josephus Moses Gray holds BA and MA Degrees in Communications and International Relations. He formerly worked at the Ministry of Foreign Affairs as Assistant Minister for Public Affairs. He is a Ph.D fellow with concentration in International Relations. He is a graduate of the ICFA Global Journalism Program, Washington D.C., USA. He holds dozens of certificates and post-graduate diplomas in Journalism, international affairs, political, Development economics, peace studies and diplomacy from abroad including the Chinese Foreign Affairs University in Beijing, Cape Town, South Africa and Atlanta, Georgia, USA. He has authored two books and has written extensively and published 33 articles on contemporary issues. He can be contacted at Email: jmoses1970@yahoo.com or 00231776824437(Liberia) and 0033661191739(France)

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