Africa Over A Barrel

By Abdoulaye Wade
Saturday, October 28, 2006

DAKAR, Senegal -- Although gasoline prices have dropped recently in the United States, many Americans continue to worry about the toll of oil dependence at the gas pump and on the U.S. economy. As an African, I feel their pain -- and then some. While the price of a barrel of crude has recently dipped below $60, oil still costs twice as much as it did three years ago -- and experts fully expect the price to climb higher.

President Bush, a one-time oilman, has warned Americans about the danger of a country's being "addicted to oil." Yet the toll of oil dependence in the United States pales beside the pain that soaring oil prices cause in Africa.

In sub-Saharan Africa, in particular, the oil crisis is not a vexing "cost crunch"; it is an unfolding catastrophe that could set back efforts to reduce poverty and promote economic development for years.

In the United States, working men and women fretted when gas prices topped $3 a gallon this year. Here in the capital of Senegal, gasoline costs $5.62 a gallon. Unlike the United States, we are not a rich nation. Imagine having to pay such an exorbitant price to fill up your tank -- but in a country where per capita income is $849 a year. Senegal's electrical utility has been forced to turn off the lights throughout the nation for long periods every day, a crippling problem that could be eased if energy cost less.

The math is not hard to do. Everywhere in West Africa, governments are being forced to reallocate lifeline budget subsidies to counterbalance unprecedented oil and electricity prices. Senegal's direct oil subsidies to domestic consumers have increased fivefold since 2002. Niger's fuel costs have quadrupled. Even in Africa's oil-producing nations, windfall profits from oil have failed to reduce poverty. Per capita income in Nigeria is still $1,400 a year.

If the price of crude oil reaches $100 a barrel within the next year -- as some analysts predict -- a pan-African disaster will be upon us. Richer, oil-producing countries in Africa risk being inundated with mass migrations of people seeking survival.

By draining government treasuries, the soaring price of oil in West African nations has made it all but impossible to proceed with antipoverty efforts, and it is hindering work to increase access to public health services and to reduce the spread of AIDS. It is true that man does not live by bread alone. But being freed from the daily necessities of survival is a prerequisite to educating the workforce and building an economy.

The oil shock wave is undermining American aims on the continent, too. As oil prices go into orbit, America's efforts to promote liberal democratic economies and combat terrorism in Africa are sabotaged. I write this as the head of state of a tolerant, pro-Western -- and predominantly Muslim -- nation.

What can be done? Part of the solution must come from Africa itself. This past summer in Dakar, I convened the first meeting of energy ministers from 13 nations to form the Pan-African Non-Petroleum Producers Association (PANPP), with the intention that it serve as a green version of OPEC. The members of PANPP aspire to become leaders in the field of biofuels and alternative energy strategies, following in Brazil's footsteps. But the development of a biofuel industry, particularly cellulosic biofuels made from agricultural wastes and prairie grasses (which President Bush touted in his State of the Union address) could take a decade or more to come to fruition. Africa needs help today.

As a stopgap measure, I propose that our organization ask African oil-producing nations, as well as the international community and major oil companies, to chip in from recent windfall profits to reduce the increase in oil prices that has taken place since 2003.

If ever there were a time when major oil companies such as ExxonMobil, Shell, Chevron, Total and BP could contribute to stabilizing West Africa by reducing the oil surcharge, it is today. As a champion of market economies, I can appreciate that companies do not easily part with profits. But the continued cost of the oil crisis in Africa could easily destabilize oil-producing nations and shrivel downstream markets for the oil companies elsewhere in the continent. It's in the interest not only of America but also the petroleum industry not to have an Africa in ruins.

The writer is president of the Republic of Senegal.

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