EYEGAMBIA

EYING GAMBIA, AFRICA & BEYOND.

Decades of Revenue Losses in Africa; Who Saves the Continent?

It is irrefutably true that the world depends on Africa’s resource reserves for almost everything. Unfortunately, this much dependency on the continent does not translate into development or boost Africa’s revenue base. This is partly because we trade our resources at raw value instead of transforming the continent into a hub for refined products to maximize revenue and promote development.

Few people have taken steps to help solve part of the problem. Notable among them is Africa’s richest man Aliko Dangote, President Paul Kagame of Rwanda few others. In order to bridge the oil revenue gap, Dangote decided to build a multi-million oil refinery in Nigeria, which is considered the largest single-trade refinery in the world. The land area to be covered by the structure is 6,180 acres. The entire project is expected to cost $15billion, with $10billion invested in the refinery, $2.5billion in fertilizer factory, and the remaining $2.5billion in pipeline infrastructure for oil transportation. If completed, the 650,000-BPD facility will produce enough refined oil to meet domestic demands and provide a surplus for export. This bold venture by Dangote is long overdue because the continent houses nations that are lead producers in oil across the world but Africa loses a lot of revenue in the oil sector due to the non-existence or inefficiency of locally-owned oil refineries which results in the dependency on mass exportation of crude oil at relatively cheap prices.

We are excited that Dangote Refinery is in Lagos-Sanwo Olu - The NEWS
The crude distillation column being installed at Dangote Refinery, Ibeju Lekki

This simply implies that a larger percentage of the continent’s oil revenue remains with foreign refineries who mostly signs parasitic trade agreements with our ever-desperate leadership. This consistent loss of revenue is not only limited to the oil sector. It spreads across all other resources of the continent, including minerals used in the production of mobile phones, laptops, airplane engines, among many others.

One-person worth mentioning in filling the revenue gap in Africa is Paul Kagame, the President of Rwanda, who masterminds high-impact driven policies and pan African initiatives geared towards the success of the continent. In recent times, Rwanda has been in the news for opening a factory that produces home-made smartphones aside the numerous development initiatives ongoing in the country. In an attempt to make the country a regional technology hub, Kagame, together with his abled national servants, initiated the original manufacturing of these phones in Rwanda. The Phone named MARA uses Google’s Android operating system with the “X” and “Z” models costing 190 and 130 dollars, respectively. This initiative will definitely help us make good use of our Tantalum and all other minerals used to manufacture smartphones instead of exporting them always at cheap prices just to end up paying more to secure mobile phones. In the long run, Rwanda would equally supply such phones across the world to help generate enough revenue. This and many other initiatives must be promoted to help establish a positive relationship between our resources and the general development of the continent.

Unbox the Mara Phone - YouTube
Mara Phone

Jean-Noel Francois, the acting Director, department of trade and industry at the African Union Commission said at the second conference of African ministers responsible for mineral resources and development on December 12th, 2011 in Ethiopia that, even though Africa’s mineral resources are fueling growth and development in many industrialized and emerging economies of the world, Africa still remains poor, under-developed and dependent on donor assistance for national budget support. Statistics equally have it that Africa produces 75% of all the cocoa in the world, but the continent gets only 2% of the hundred billion dollars revenue from the chocolate industry. A report by the African Fine Coffee Association (AFC) gave due recognition to the continent’s production rate. It estimated that coffee production in Africa could double in the next five years, providing the continent a considerable presence at the global market. Still, it is a sheer apathy that Uganda as one of Africa’s biggest exporters of coffee and actually a nation that ranked 8th on the list of global coffee production, has almost nothing to show in terms of development.

How Do We Deal with these Decades of Revenue Losses and Consistent Trade Without Any Real Value to Show?

We need to create a favorable working environment and support our own people like Aliko Dangote, Paul Kagame and other interested sons and daughters of the land to invest in the continent by focusing on areas that will help add value to our raw materials to prevent the mass revenue losses we have suffered for so many years.

Share on facebook
Share on twitter
Share on whatsapp