Chronic. Nigeria experienced, in mid-February 2022, a misadventure that we could find comical if it were not distressing. The first producer of black gold in Africa has been facing a week-long shortage of fuel, causing monstrous traffic jams at service stations across the country. At the origin of this malfunction, the accidental importation of a large quantity of adulterated gasoline. Because therein lies the crux of the problem: Nigeria buys most of its fuel abroad, failing to refine itself the hundreds of thousands of barrels extracted every day from its basement.
The incident caused a “unnecessary shock” to the economy, according to the National Bureau of Statistics. In the immediate term, inflation is expected to spike again as nearly one in two Nigerians live on less than $1.90 a day. In the longer term, this incident confirms what we already knew: the incredible oil wealth of the West African giant hardly benefits its population.
In economic jargon, this is called the “natural resource curse”. Or how, too often, the rentier exploitation of raw materials destabilizes economic activity, feeds corruption, slows down industrialization and aggravates poverty. In Nigeria, oil money has been squandered for decades. And the leading African economy in terms of GDP is, in many respects (infant mortality, violence, school dropouts, etc.), a failing state.
However, like Nigeria, many African countries are still overly dependent on their natural resources. For some, it may be tea, cotton or cocoa, but it is more often a question of mining or petroleum products. In Angola, Chad, the Democratic Republic of Congo (DRC), and even South Sudan, exports are made up of more than 90% extractive resources.
Volatile growth
Is this necessarily problematic? The African Economy 2022 (La Découverte, 126 pages, 10 euros), just published by the French Development Agency (AFD), provides us with factual but enlightening elements of assessment on “inertia” of these economies dependent on their basement. We learn that they have recorded lower growth rates since 2015 than more diversified countries. And that they have not managed, on the whole, to return to their level of activity before the coronavirus crisis.
Growth there is volatile, subject to the vagaries of world prices. When prices rise sharply, State coffers fill up, but the influx of capital makes the currency more expensive, which handicaps competitiveness and discourages industrialization. When they collapse, government revenues evaporate and deficits widen.
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