How Africa's natural resources can drive industrial revolution

An article co-authored by Tony Elumelu and Carlos Lopes, the Executive Secretary of the United Nations Economic Commission for Africa (UNECA)

Five years after the global financial system came perilously close to collapse, the global economic outlook is still uncertain. In Europe, GDP is still below pre-crisis levels and unemployment is at a record high. Recovery in the United States, although stronger, remains weak by historic standards, and even China, which has done so much to drive global growth, is slowing down.

Yet, in what some might call an unexpected twist, average growth in Africa over the last decade has been more than 5%. Of the 10 fastest-growing global economies, seven are in sub-Saharan Africa. But how will this economic spike be sustained? How do we ensure we continue along this trajectory?

It is the world's appetite for Africa's rich natural resources which, up to now, has been the major driver of this stellar record. And it is this same appetite that will provide both the opportunity and the solution for Africa to sustain these economic achievements.

While not all African countries are commodity rich, the continent has 12% of the world's oil reserves, 40% of its gold, and 80% to 90% of its chromium and platinum. Africa is also home to 60% of the world's underutilized arable land and has vast timber resources.

The idea that these abundant natural resources can be the driver for an industrial revolution across the continent is growing. The latest edition of the Economic Report on Africa (ERA 2013) sets out how the continent's future will be determined by how policies that promote commodity-based industrialization are designed and implemented.

We believe that such a transformation is both imperative and possible. But it requires courage, vision and a new mindset from the continent's business and political leaders to overcome the challenges which continue to hold back the building of a successful and dynamic industrial base in Africa.

There is no one-size-fits-all solution to accelerating resource-based industrialization. But important lessons can be learnt from the success of countries such as Malaysia, Indonesia, Thailand and Venezuela in promoting value addition, new services, and technological capabilities.

Malaysia, in particular, is a perfect example of how a commodity-based economy was transformed, through focused state interventions and an allocation of resources towards the industrial sector, to a high-income and diverse manufacturer in only a few decades. Through a series of five-year development plans, centered on a vision to transform the structure of the economy and raise incomes in the medium- and long-term, investment was oriented towards industry. Today, Malaysia is a key manufacturer and exporter of a wide range of goods and services.

It is clear that governments, both individually and collectively, have an important role. A supportive policy and investment framework is essential to attract long-term investors. Policies to build local capacity and address inequality are essential. Moreover, developing skills through training and incentives will ensure that local economies are able to grow and diversify.

However, a barrier to Africa's industrialization that is not often talked about is the mindset of private sector leaders -- both in and outside Africa. Many are still indulging in the same historical rent-seeking attitudes that have resulted in the short-terms gains of crude, cocoa and gold sales. More business leaders need to change their thinking and understand that short-term revenue gains -- as opposed to long-term value addition -- offer little or no contribution to sustainable economic growth.

We are now seeing a new style of African business leader emerging -- leaders who are building, investing, growing for Africa's future. It is their efforts which will provide the jobs and income which will have the biggest impact on tackling poverty and driving wider social progress. 

Africa's private sector must take the lead in improving coordination between farmers, growers, processors, and exporters; in increasing competitiveness in the value chain, and ensuring the price, quality, and standards that market demands are met.

We need to see national and regional champions created and supported, and help foster effective collaboration between public and private sector and the development world. This is the essence of the emerging economic philosophy called Africapitalism, a private sector led partnership mode focused on Africa's development.

We have already seen real progress on the continent. Ethiopia's leather industry is not only developing fast but is also increasing high-value-added activities. South Africa and Egypt are making similar strides. In Ghana and Zambia, the cocoa and mining sectors have long contributed to wider socioeconomic growth. In East Africa, the success of Kenya's fresh vegetable producers in adding value to their exports has been remarkable.

But when Africa only sees some 10% of the income from its own coffee crop, we can see that much work still needs to be done.

Africa now has the chance, as never before, to shape its own economic future through industrialization. This will help to spread prosperity throughout the continent. An industrialized Africa will also provide a much-needed new driver of global growth. It is in everyone's interest that Africa succeeds.

Source: CNN - http://edition.cnn.com/2013/11/20/opinion/africas-natural-resources-industrial-revolution/ 

Carlos Lopes is Executive Secretary of United Nations Economic Commission for Africa. 

Tony O. Elumelu is an entrepreneur, a philanthropist, and the chairman of Heirs Holdings Limited, a pan-African investment company committed to driving economic prosperity and social wealth in Africa.

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Whale Deaths and Oil Exploration in Ghana

The surge in the death of marine mammals, particularly whales, should serve as a wake-up call because it signals the gradual breakdown of sustainability of the marine ecosystem and if not unraveled would result in a negative outcome for biodiversity, livelihoods and food security.

The situation at hand far exceeds the predictions of the environmental impact assessment of the Jubilee field. The impact assessment predicted minor residual impacts on marine mammals and proposed some measures to counter the effect. According to residence whale deaths were averagely encountered once in every five years but with the advent of oil exploration eleven (11) whales were reported within three years (2007-2010) to have died and washed ashore in the Western Region alone and recently four more have been discovered ashore within a week.

Around the world, energy companies are exploring for oil and gas using seismic airguns in sensitive, wildlife filled waters. The issue about seismic air guns in oil exploration is that the sound waves which extend for hundreds of miles bounce off the ocean floor indicate likely areas for oil. It is the most severe acoustic insult to the marine environment short of naval warfare. This sonic barrage can interfere with a whale’s ability to feed, breed, navigate, communicate and avoid predators — in short, to survive. If a whale goes deaf, it can’t survive. And repeated blasts (100,000 times stronger than a jet engine) can impair hearing easily. The blasts can drive whales to abandon their habitats, go silent and cease foraging over vast areas. It can cause permanent hearing loss, injury and death for whales.

The death of these marine mammals coincides with the commencement of oil extraction and has followed trends with oil exploration around the world. Like their counterparts in many countries that have experienced this negative phenomenon the government agencies responsible for curtailing this ongoing disaster has claimed there are no empirical basis to establish a link between the death of the whales and oil production.

According to Natural Resources Defense Council (NRDC) there is no question that sonar injures and kills whales. Evidence of the danger caused by these systems surfaced dramatically in 2000, when whales of four different species stranded themselves on beaches in the Bahamas. Although the Navy initially denied responsibility, the US government's investigation established that mid-frequency sonar caused the stranding. After the incident, the area's population of whales nearly disappeared, leading researchers to conclude that they either abandoned their habitat or died at sea. Similar cases have occurred in the Canary Islands, Greece, Madeira, the U.S. Virgin Islands, Hawaii and other sites around the globe.

If my argument makes sense, then we have clearly made our choice. We cannot hide behind the curtain of ignorance and claim we know not the cause of the impending extinction of this vital species in our ecosystem. 

Written by:
Enoch Ofosu
Water Resources Specialist
blessedenoch@yahoo.co.uk

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Fracking - opportunity or challenge?

On 14 August 2013, I woke to a news item on BBC about The Church of England has telling its parishers that fracking causes environmental problems and risks lasting harm to God's glorious creation. As an environmentalist and a Christian, I was very interested in the Article and decided to find it to read. This lead me to the website of the Diocese of Blackborn (http://www.blackburn.anglican.org/more_info.asp?current_id=469) where I found the full article. I wish to share it with my readers so I have reproduced the article below.

Fracking - opportunity or challenge?

 

Hydraulic fracturing, also known as fracking, is a process for extracting natural gas from shale deep under the water table. It allows energy companies to reach natural gas that was previously inaccessible by breaking up the rocks in which the deposits form. While natural gas is domestically produced and considered to be a cleaner energy source, there are also environmental and human health risks associated with the extraction process

The Diocese of Blackburn has also produced a helpful leaflet on the subject.

 

Fracking - also called hydro-fracking or, officially, horizontal drilling coupled with multi-stage hydraulic fracturing - is a relatively new process of natural gas extraction. Here's a step-by-step guide to the process:

 A well is drilled vertically to the desired depth, then turns ninety degrees and continues horizontally for several thousand feet into the shale believed to contain the trapped natural gas

1. A mix of water, sand, and various chemicals is pumped into the well at high pressure in order to create fissures in the shale through which the gas can escape
2. Natural gas escapes through the fissures and is drawn back up the well to the surface, where it is processed, refined, and shipped to market
3. Wastewater (also called "flowback water" or "produced water") returns to the surface after the fracking process is completed, and it is then contained in steel tanks until it can be stored long-term by deep injection in oil and gas waste wells, or other geological reservoirs

Fracking is fundamentally different than traditional gas extraction methods

• Fracking wells go thousands of feet deeper than traditional natural gas wells
• Fracking utilizes "fracking fluid," a mix of water, sand, and a cocktail of toxic chemicals. While companies performing fracking have resisted disclosure of the exact contents of the fracking fluid by claiming that this information is proprietary, studies of fracking waste indicate that the fluid contains: formaldehyde, acetic acids, citric acids, and boric acids, among hundreds of other chemical contaminants
• Fracking removes millions of gallons of precious freshwater from the water cycle. Fracking requires between two and five million gallons of local freshwater per well - up to 100 times more than traditional extraction methods
• About half of this water returns to the surface, but no one is entirely sure what happens to the other half of the water used in the process. Our best guess is that the water remains underground, though there are indications that at least some of this toxic cocktail makes its way back into the water supply

Fracking causes a range of environmental problems

• In the USA, where fracking is an already established process, there have been reported surface, ground, and drinking water contamination due to fracking
• Pollution from lorry traffic, chemical contamination around storage tanks, and habitat fragmentation and damage from drilling to environmentally sensitive areas have are all related to fracking

Fracking God’s creation: Where should faith communities stand in the arguments between economists and environmentalists over fracking?

Natural gas extraction is increasingly presenting people with a choice between economic gain and a healthy environment. A relatively new technique to extract natural gas from previously unreachable depths is prompting a rush to drill, despite virtually no history as to its environmental impact.

West Lancashire is very much at the centre of the debate about fracking with a pilot well in Elswick having been in operation since 1993, and more recently a systematic series of geological surveys have revealed there is potentially a significant amount of natural gas that could be extracted from beneath the region by using the fracking process, originally developed by the giant American Oil and Gas extraction corporation Halliburton, and now being adopted in Lancashire by a company called Cuadrilla.

People in favour of fracking claim it is a means of addressing economic necessity that can fill the shortfall in energy supplies that have hitherto been extracted from the North Sea oil and gas reserves. On a more localized basis, gas companies claim that drilling brings economic benefits, including increased employment. This premise is alluring to many landowners, including local farmers who may be struggling to make their land profitable. It has lured landowners to sign or contemplate signing leases to drill on their land. This is one way they can retain their land and make money, and money in today’s world seems to count for more than environmental stability

Those opposed to fracking are concerned nonetheless with health and the environment. They question the safety of the process, where will gas companies get the millions of gallons of water needed, where will it be stored once it’s brought back to the surface mixed with fluids from deep underground and those toxic chemicals. A point of contention is that gas companies are not required to disclose the chemicals employed in fracking, no doubt as a way to keep their fluid recipes secret from competitors.

Fracking produces gas that, when burnt, is as, if not more, toxic than coal, and for it to be considered as an environmentallly-friendly source of energy, can only be burnt in power stations that have installed expensive and effective carbon capture and storage (CCS) processes. This CCS technology is currently far from well-developed on an industrial and commercially viable scale.

 Those with reservations about fracking also want to know how it will affect the soil and, above all, sources of drinking water, including ground water. Human and environmental health are greater priorities for opponents than potential economic gain. An increasing body of reported evidence from the United States of America raises concerns about the structural stability of wells, explosions, combustible water, illness among humans, farm animals and plant life, and the necessity to purchase water for drinking, bathing and other common uses. Fracking opponents point out that we can live without gas, but not without water.

 

The rush to benefit from the gas-drilling bonanza is an obvious temptation for many and this, of course, raises the question of how consideration for God the Creator enters into the decision-making process. Is there a way for Christians to be guided by the scriptures in applying biblical and theological considerations to gas drilling?

Our solutions must be rooted in scripture, employ our ability to reason, stem from listening to people who have experienced fracking positively and negatively, and to discern under God’s guidance what is good and right. As local church members become more aware of the issues surrounding fracking, they need to engage in biblical and theological discussion about their responsibility as stewards of the earth.

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