Africa is cursed -- with riches. In an era of rising petroleum prices, African oil is drawing new interest from major companies around the globe, says John Ghazvinian, author of Untapped: The Scramble for Africa's Oil. They see the continent as the most promising place in the world for new production. It doesn't have the huge deposits that the Middle East and Russia do, but what it does have is accessible and largely unexploited. And the oil's high quality makes it relatively inexpensive to refine.
"Since 1990 alone, the petroleum industry has invested more than $20 billion in exploration and production activity in Africa," writes Ghazvinian, a visiting fellow at the University of Pennsylvania, who spoke at a recent event sponsored by the Wharton African Students Association. "A further $50 billion will be spent between now and the end of the decade, the largest investment in the continent's history."
But most Africans are seeing little benefit from this influx of oil drillers and investment. In fact, because of an economic paradox known as the "Resource Curse," they are often hurt by exports of their countries' oil. "Between 1970 and 1993, countries without oil saw their economies grow four times faster than those of countries with oil," Ghazvinian notes, adding that oil exports inflate the value of a country's currency, making its other exports uncompetitive. At the same time, workers flock to booming petroleum businesses, which saps other sectors of the economy.
See full Article.
Posts
