Will Development in East Africa be Fossil-Fuelled?

02-07-2014

East Africa is at a critical turning point in its development trajectory. The discovery of substantial reserves of crude oil (in Kenya and Uganda) and natural gas (in Mozambique and Tanzania) may bring billions of dollars in new revenues to the region. East African countries are currently drafting and implementing legislation, policies and infrastructure in this sector and should begin reaping the benefits of commercial production in the next four to ten years. Yet the experience of other resource-rich countries demonstrates that, without the appropriate safeguards, East Africa may miss the opportunity to use these revenues to promote inclusive growth. Countries in the region risk exacerbating inequality while encouraging corruption and other social and environmental problems. This question has importance well beyond the region's borders. The global energy landscape is rapidly changing, and East Africa's reserves will spur international companies to compete for their share of the profits. As a major trade partner and donor, the European Union should use its position to ensure that extractive industries' activities are transparent and that countries strengthen their institutions and adopt pro-poor economic measures. Although the EU's role in the region is being eroded by emerging actors, the Union still enjoys important leverage, which could be used to help East Africa's transform its abundant natural resources into equitable growth and sustainable development.

East Africa is at a critical turning point in its development trajectory. The discovery of substantial reserves of crude oil (in Kenya and Uganda) and natural gas (in Mozambique and Tanzania) may bring billions of dollars in new revenues to the region. East African countries are currently drafting and implementing legislation, policies and infrastructure in this sector and should begin reaping the benefits of commercial production in the next four to ten years. Yet the experience of other resource-rich countries demonstrates that, without the appropriate safeguards, East Africa may miss the opportunity to use these revenues to promote inclusive growth. Countries in the region risk exacerbating inequality while encouraging corruption and other social and environmental problems. This question has importance well beyond the region's borders. The global energy landscape is rapidly changing, and East Africa's reserves will spur international companies to compete for their share of the profits. As a major trade partner and donor, the European Union should use its position to ensure that extractive industries' activities are transparent and that countries strengthen their institutions and adopt pro-poor economic measures. Although the EU's role in the region is being eroded by emerging actors, the Union still enjoys important leverage, which could be used to help East Africa's transform its abundant natural resources into equitable growth and sustainable development.