All interviewees' views are their own and do not represent any policy or endorsement by the EI Source Book or its editors.

Interview with Sheila Khama (March 2012)

Sheila Khama is the Director, Extractive Resources Services, at the African Center for Economic Transformation (ACET) is an economic policy institution, dedicated to promoting the long-term growth and Transformation of African economies. ACET is an EI Source Book partner; read their 1st March report on their work with the EI Source Book and CEPMLP, the lead partner.

"The inclusion of  ACET in the EI Source Book partnership is especially welcome and valuable due to both what it demonstrates about our commitment to Africa and how it will allow us to build stronger and deeper foundations for our collective work there.  We recognise the geographical diversity that exists across Africa and our partnership with ACET brings us far closer to the extractive industries in each of those many countries where ACET transformational work is already helping to better leverage far more effective, sustainable and transparent exploitation along the value chain of national resource endowments", Prof Peter Cameron, EI Source Book and CEPMLP Director.

Interview with Dr Duncan Clarke (February 2012)

About the author: Chairman & CEO, Global Pacific & Partners, (London, The Hague, & Johannesburg), Independent Management Advisors in global oil and gas-LNG, now for over 25 years worldwide.  He is a leading authority on Africa, building on 40 years’ experience in economics, Africa advisory practice, and visits to 46 African countries.  He is President of the African Institute of Petroleum, and Recipient of the South African National Energy Association Award 2011.

Recent publications include:

Question 1)  How deleterious an effect do you think Western “vacuous moralising and cant” has on the prospects for Africa in achieving better outcomes from its oil and gas industries?

Response: "The African oil and gas industry is driven by competitive investment opportunities and economics of ventures. Many NGOs and other parties inclined to “advise and fix” Africa do so for their own political or vested interests, much of which has little bearing on the realities on the ground or the best strategies for economic growth in Africa. The main problems within the oil/gas game arise in the spheres of Africa’s politics, and amidst its politicians, not from some vague idea about an “oil curse” – this often used as a pseudo-intellectual substitute for knowledge on actual conditions and clear thinking."

Question 2) Are efforts to try and “fix Africa”, led from outside of that continent, wholly counter-productive or can they achieve some real benefits regardless of their external motivation?

Response: "Many claims made to “fix” Africa and reshape its oil game go unheralded. Most have been aligned to political strategies designed to raise barriers to new ventures and investment, with tougher regulation and higher taxes resulting , and so they typically invoke “models” applied elsewhere, often irrespective of local conditions and realities."

Question 3) To what degree are “pre-capitalist economic modes” still inhibiting African ambitions for its oil and gas industries?

Response: "Africa has a unique mix of medieval and modern economic modes, the oil industry part of the latter that is interfaced with the former both at ground level inside and around communities and at the state level where Governments often act as a mix of both. Often it is the “modern” state in Africa that has been its own worst enemy in applying restrictive policies that limit potential investment."

Question 4) What game-changers can you identify for Africa to help it shift gears from mere economic subsistence behaviour to a mindset of stable economic development and shared wealth creation?

Response: "The overwhelming requirement for Africa’s future is to maximise long term growth in GDP and per capita over time, preferably consistently over the decades, and to do this high rates of savings and investment are essential, including open regimes to attract FDI and a wide mix of corporate players, including domestic firms."

Question 5) Which are the star performing African countries in terms of oil and gas exploitation?  What do they have in common that allows them to be so successful?

Response: "Currently, Mocambique stands out given the recent history of large gas discoveries offshore and a track record in attracting corporate players, small and large. The keys to success here have been the adoption of independent licensing, lack of resource nationalism (to date), a state company that is commercialised, and a relatively acceptable fiscal regime (aligned to prospectively) with regular and well managed bid rounds. Mocambique would be advised not to fall for the seductive charms of resource nationalism or policies proffered that would create disincentives to new investment."

Question 6) Now that oil is the number one export of Africa, is there scope for African nations to take a more aggressive approach to local procurement requirements of international oil companies and hence redirect more supply chain spending to local, rather than foreign, companies?

Response: "Several countries have attempted to instil local content requirements and mandate indigenisation policies, both of which are self-defeating in that they tend to make for more regulations, higher costs to operations, impose barriers to entry, and can be inflationary. Encouragement of the natural growth of the industry is the best strategy to go forward, and in time the economics of operations will be the best driver for local facilities investment. Forced or mandated localisation policies have several negative consequences including impacts on efficiency and the extent and speed achieved in unlocking of the natural resource capital base."

Question 7) The recent cutting of retail petrol subsidies in countries like Nigeria has provoked very angry responses from citizens who consider that their sole benefit derived from their nations’ oil wealth are such subsidies.  Is it wise for such subsidies to be cut?

Response: "Yes. It is a matter of reshaping the economy, placing product prices on levels to reflect costs, and rid the system of distortions, in this case smuggling and the constraints and unintended consequences that follow, and undermine domestic refinery investments."

Question 8) In your writing, you make much of contextual factors in explaining your arguments. Is there a reason, personal or intellectual, why you give so much weight to context and history in examining African oil and minerals?

Response: "Historiography in Africa is very important – for understanding and situating the Continent in its evolutionary epochs. Without context there can be no real understanding. In the resource world of oil and minerals, it is critical to appreciate that the unlocking of these non-monetised assets and the proper reinvestment of the residual revenue, lie at the heart of the prospects for maximal future growth in Africa’s GDP, and the reduction of poverty and backwardness as still found in many economies."