Getting electricity to more Africans is a top priority at the US Department of State's Bureau of Energy Resources (ENR), an official told a House Foreign Affairs Committee subcommittee on Nov. 14. But promoting good governance as countries there manage their oil and gas resources also looms large in ENR's African strategy, added Robert F. Ichord, DOS's deputy assistant secretary for energy transformation.
Recent hydrocarbon finds, particularly in East Africa, could help countries make the transition from economies focused on subsistence agriculture and dependent on international aid to economies driven by natural resources, he said in written testimony to the Africa, Global Health, Global Human Rights, and International Organizations Subcommittee.
Ichord said Sub-Saharan Africa's production already totals about 6 million b/d of crude oil and some 60 billion cu m/year of gas. The area has another 20 estimated billion bbl of crude and 30 trillion cu m of gas that are technically recoverable, he said.
"Managed well, a wealth of oil or gas could help fund or be a component of increased [electricity] generation capacity," Ichord said. "Managed poorly, that wealth could stall or even reverse development." Angola and Nigeria, Sub-Saharan Africa's two biggest oil producers, show what can happen when a country manages its petroleum resources badly, he noted.
"Engagement with emerging producers presents an opportunity to establish effective legal and regulatory frameworks, robust financial management systems, and strong environmental and social protections to help these countries transition their economies, expand electricity access, and export their resources without falling victim to the resource curse," Ichord said.
Doing this before resources and revenue start flowing "sets a foundation for a well-governed economy that can avoid the serious mistakes that other producer countries have made," he added.
Working with EITI
Ichord said transparency can help expose whether revenue is benefiting a county's people, or being diverted for personal gain or to entrench the existing elite. ENR works with the Extractive Industries Transparency Initiative (EITI) to support natural resource revenue transparency and management, he testified.
"Currently, 18 countries in Africa are EITI compliant, and 4 are EITI candidates," Ichord said. "Under the auspices of the G7's US-Guinea partnership aimed at strengthening transparency and good governance in Guinea's extractive industries, ENR engagement helped Guinea achieve EITI compliance in July."
More broadly, US President Barack Obama and African leaders at an August summit established a US-Africa Partnership on Illicit Finance to create a high-level working group that will develop an action plan to curb natural resource corruption, he said. "These are only first steps," Ichord said. ENR is working with other African governments to identify ways to improve oil and gas transparency and management, he told the subcommittee.