Home » Uncategorized » Petrodollars in East Africa without good governance would be an unfortunate fate.

Petrodollars in East Africa without good governance would be an unfortunate fate.



East African countries have in majority discovered commercially viable oil and gas as governments are looking forward to cash in on the black gold. Citizens in Kenya, Uganda and Tanzania are excited about the prospect of seeing their living standards improve significantly.

Rwanda’s government had since 2010 entered into agreement with Canadian company Vanoil Energy Ltd to prospect oil in Lake Kivu but their partnership was recently terminated without success. As the whole region is excited about this development, I have received this news with a mix of fear and worries.

While oil and gas had contributed to raising the living standards of citizens in various countries in the world, it had not been the case in others especially in Africa and in the Middle East. Nigeria is Africa’s biggest producers of oil but this has done little to improve the plight of millions of Nigerians.

In the Middle East, Iran oil reserve is third largest in the world according to data from its government but this fact hasn’t helped to raise the living standards of ordinary Iranians.

If you happen to have followed the news last week, you might have learned the missing of a Malaysia Airlines flight MH370 that was en route to Beijing from Kuala Lumpur. In that flight there were two young Iranians that were traveling to Europe using stolen passports via Beijing.

I guess the young men were desperate to flee to a country that could offer them freedom to live a better life. Authorities reported that 29-year-old Delavar Seyed Mohammadreza and Pouria Nour Mohammad Mehrdad, who was aged either 18 or 19 were traveling to Germany in search for a better life. How come these young people chose to flee the third largest oil reserve in the world? The answer is found somewhere in how Iran is governed.

Back to Nigeria which is Africa’s second biggest economy where oil wealth has enriched elites but has failed to create enough employment to its citizens. The chocking news of the death of 16 young people in stampedes, when a half million people were invited to apply for fewer than 5000 jobs for Nigerian immigration service’s revealed Nigeria’s unemployment crisis.  

The two scenarios clearly demonstrate that oil in itself will not lift East African citizens out of poverty. Countries such as Nigeria and Iran that had been exporting oil have in most parts been characterized by dictatorial regime that had done little to wisely invest their countries’ oil bonanza.

Nigeria has failed to invest in critical sectors such as agriculture, healthcare, education, manufacturing among others that could create millions of employment to its citizens. Instead of raising the living standards of the majority of the population, oil has only enriched elites while polluting lands that used to belong to farmers.

Multinational oil companies have unfortunately polluted the environment without much annoyance from authorities. Corruption is the order of the day in Africa’s most populous country and it is a dream for an ordinary Nigerian without family connections to enjoy a better life. The end result is that you will find millions of young Nigerians leaving the country for better opportunities in different parts of the world.

The same scenario can easily happen in East Africa which is a new province for multinational oil companies eager to make exorbitant profits for their shareholders. Citizens in these parts of Africa are now excited and can’t wait to see the start of oil production to see their dream of a better life come true.

My biggest fear is that the current excitement might turn out to be a disappointment in the future in case the region doesn’t have strong institutions to deal with multinational oil companies. The latter have acted irresponsibly towards local citizens in Nigeria Delta region where oil spills have polluted the environment and made it impossible for farmers to stay in trade.

We need smart governments in East Africa if we want to see the raising of our living standards as a result of oil production, refining and export. The government of Uganda has recently signed the long-awaited memorandum of understanding with three multinational oil companies mainly Tullow, Total and Cnooc.

It is my hope that Uganda took necessary measures to safeguard the interest of its people and the region in general. If there is a country that our governments can learn from about the management of oil revenues, it is indeed Norway the Scandinavian country. The latter has discovered oil in the North Sea during the late 1960’s.

Exports of oil and gas have ever since become very important elements of the Norwegian economy. The United Nations had been crowning the Scandinavian country as the best country in the world to live in as a result of its government excellent management of its natural resources.  

My wish or let me put this was – My dream is to see East African governments effectively using oil money in a way that will transform the living standards of our people for the better. Time will tell …





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