Africa Slumbers As Western Firms Scramble for Its Wealth

As Western - and now Chinese - companies gather around the greatest concentration of Africa's natural resources, countries on the continent are yet to embark on positioning local businesses to share in the windfall, analysts say.

Although many international companies in Africa are of Western origin, China seems to be determined to challenge this hegemony, particularly as far as securing oil concession and other businesses in many African countries are concerned.

Analysts add that in doing this, China is not only driven by its own energy predicament, but also by a realisation that Africa is a place Western capital has not entirely "colonised".

The US' Energy Information Administration estimates that the continent holds 8 per cent of the known global oil resources and 11 per cent of the world's production. This might seem a low percentage, but when it is taken into account that much of Africa's oil is neither discovered nor exploited, one appreciates the fact that it is a substantial resource.

But as global economic growth rises with the US needing an estimated 119.2 million barrels a day and China 14.2 million by 2025, it is believed that Africa's oil resources will increasingly become a strategically important resource. Already, the "scramble" for this resource has begun in such countries as Chad, Guinea, Nigeria, Uganda, Angola and Sudan, while others such as Kenya, which do not have known oil deposits, are being targeted for exploration.

Global capital

The million-dollar question is how different African countries will position their economies to benefit from not just oil royalties and taxes, but also in terms of attracting global capital to invest in industries and ventures that will create significant multiplier effects and lift millions from poverty and depravity.

As Kenya's case shows, Africa has not even started to make this a priority. The Sunday Nation has keenly observed that in areas with the greatest concentration of natural resources in Kenya, the local people and, by extension, the country as a whole, has not even started to appreciate their worth.

Africa is asleep in as far as creating modern business ventures from its resources is concerned. For instance, long before subsidiaries of multinationals came in to bottle and offer "designer" water in the market, springs and streams were regarded as a communal resource to be used by all. And until very recently, locals would merely go to the nearest forest to collect as much fuel wood as their backs could carry.

And although some communities used wildlife for protein while others had long traded in ivory, many in Kenya had not learnt to commercialise its "aesthetic" value. But as Africa sleeps, American, European and Asian companies have based "roaring" businesses on its resources. With a history of innovation, better resource exploitation technology and the ability to strike very lucrative deals with the local elite, such capital is moving fast and furious, and might eventually root out what remains of Africa's social system of yester years.

The new international concerns investing in Africa's oil and other resources are completing a pattern started in the colonial period and which is almost intact in many African countries. For instance, perched in the periphery of Kenya's principal forests or concentrated in the vicinity of principal national parks and pristine springs and streams are remnants of the colonial business order.

But now newer companies have set in - credit to the apparent triumph of globalisation - to give the Kenyan economic landscape a newer, refurbished and increasingly exclusive look. Today, we can talk of Coca-Cola's designer water Dasani, Brooke Bond's Green Label tea, Kakuzi's more efficient kilns, Homegrown's multi-million-dollar horticultural outfits around Naivasha and in Nanyuki or the luxurious spread of African Safari Club's exclusive resorts in Mombasa's North Coast.

This scenario is replicated in many African countries. For example, while on a tour of areas around Lake Malawi last year, I learnt that the locals can no longer access much of the lake as it is almost envelope' by companies that have put up a stream of exclusive tourist lodges and private estates. Malawi newspapers had reported complaints by the traditional chiefs who threatened to mobilise their subjects if the situation was not rectified. The lake is the second largest in Africa after Victoria.

All this has been going on despite a reawakening in many parts of the continent. But interestingly, there is a world of difference between how Western analysts and their counterparts in Africa view this scenario.

Those in the West seem to believe that the continent's resources are up for grabs by international businesses and that the only "outlandish" threat is China which, they say, will be an economic superpower in the near future.

For instance, writes Assis Malaquais, an associate professor of government at St Lawrence University, New York: "China's attempt to quench its own growing energy thirst in Africa will hardly be welcome by the US."

He goes ahead to explore global security scenarios that China's quest for Africa's oil portends and concludes; "the stage is set for a colossal tug-of-war between the United States and China over Africa's oil resources." Reading through his article, one gets the impression that Africa and its people do not feature anywhere in making decisions on who is to benefit from the continent's oil and other natural wealth.

On their part, local analysts, especially the lobby groups, feel that the trend in which Africans' needs and views are disregarded when it comes to strategically positioning their resources portends grave danger for future peace on the continent.

Many cite rising levels of hopelessness, debilitating poverty and stunted economies, thanks to mismanagement, outright looting and increasing global emasculation as the fodder nurturing mass anger and resentment. They cite the case of the oil-rich Niger Delta of Nigeria where there has been a long running and well documented confrontation between the local people and government forces.

African governments should move fast to ensure all the agreements they make with international companies on exploitation of natural resources cater for the local people's interests. Such deals ought to be fashioned in such a way that they will enable the nurturing of local talent and capacity for future takeover.

Protectionism, some analysts believe, may help to secure local interests in the short term, but ultimately what Africa needs is to develop its own ability to be truly competitive. The continent needs also to develop from its own resources.