Effects of Ineffective Governance of Sub-Saharan Africa’s Extractive and Energy Sectors

Africa is endowed with abundant natural resources. These include an important share of the world’s mineral resources reserves and energy generation potential. For instance, Nigeria and Angola produce several million barrels of oil per day. Twenty-seven African states contain coal-bearing rock, with the lion’s share (96 per cent) of the total recoverable coal deposits in Africa found in South Africa - the sixth-largest coal producer in the world. About 60 per cent of the world’s cobalt is mined in the Democratic Republic of Congo.[1]

Northern Africa is rich in natural oil, currently producing about 30 per cent of the continent’s energy supply.[2] South Africa, with its rich coal reserves, produces about 45 per cent.[3]  The rest of Africa, representing 75 per cent of the continent’s population, produces only 25 per cent of the continent’s energy supply.^[4] 

Despite the economic potential that the availability of these natural resources present for development in Africa and overall improvement of the wellbeing of people on the continent, the current reality is very undesirable. Communities that are supposed to benefit from the abundance of natural resources in Sub-Saharan Africa are side-lined, despite being affected the most by the adverse impacts of the extractive industry, such as environmental pollution.[5] 

Similarly, Sub-Saharan Africa fails to be electricity-efficient, despite Africa’s electricity generation potential. Countries like Cameroon fail to generate enough electricity for its citizens, despite the presence of numerous watercourses that can facilitate hydropower generation. Similarly, Niger produces more than 5 per cent of world’s uranium [https://www.world-nuclear.org/information-library/facts-and-figures/uranium-production-figures.aspx], but access to electricity in the country is only about 35 per cent. Its uranium is exported for electricity generation in countries like France which imports more that 50 per cent of Niger’s uranium [https://tradingeconomics.com/niger/exports]. Africa’s inability to meet its own energy demands^[6] is one of its biggest impediments to social and economic development.^[7] While some African countries export energy to neighbouring and international markets, others lack even the basic infrastructure necessary to fulfil their needs.^[8]

Thus, Sub-Saharan Africa’s energy supply is wholly inadequate to serve the needs of the region.^[9] Most of the region is faced with severe energy deficiencies, especially in rural areas, where access to energy is less than 10 per cent.^[10]  The deficiencies are particularly stark in the context of electricity. Sources vary, indicating a figure of between 25 per cent^[11] and 43 per cent access to electricity on the continent.

Findings in existing literature suggest that ineffective legal frameworks and lack of good governance are some of the main reasons why resource-rich countries in Sub-Sahara Africa (excluding Botswana) are not getting the best out of their countries’ extractive and energy sector.[12] Weak regulation and poor governance structures have led to situations whereby governments and industries practice abuse of power and natural resources are extracted unsustainably and benefit only a few. Such exploitative and invasive practices prejudice the continent. Hence, the management of mineral wealth and energy resources must be guided by strong regulatory systems and good governance, to avoid rendering countries vulnerable to corruption, lawlessness and exploitation by players entrusted with the responsibility to run the extractive and energy sectors.

Laws have the potential to ensure strong regulatory practice and good governance. A reform of legal frameworks and governance structures and implementation thereof are therefore imminent to achieve a better regulation and management of the extractive and energy sectors, particularly where it concerns economic and related social conditions. A good reform in that regard entail having provisions that put countries interest first by eliminating possibilities of governments and industries abuse of power, unsustainable extraction of natural resources and situations where only a few benefit from natural resources and access to electricity.

Written by Bernard Kengni.