Political instability threatens success of oil and gas sector

At least 40 out of 54 countries in Africa are currently exploring for oil – a clear indication of how this sector is growing on the continent. But, warn the experts, for Africa to truly benefit from oil and gas it is going to have to take a long look at its politics and make sure it creates a politically stable environment where business can flourish. According to Martyn Davies, CEO Frontier Advisory, politics in Africa is intrinsically connected to economics – and unlike many other countries where there is sometimes a lag, with economics following politics in Africa, it is the opposite. He believes that while oil and gas hold the potential to transform Africa, it remains imperative that political instability and flare-ups are addressed to ensure an environment where businesses can flourish. “Africa remains a highly complex region where one must be wary of making generalised comments, but politics cannot be taken out of the African picture.” He said many African states were grappling with the challenge of how to build sustainable economies with robust economic growth on the back of political instability. “Politics will dictate the ultimate outcome of Africa and there are several areas on which one will have to keep a close eye in 2013,” he said. These include Mali and much of Francophone Africa where several political flareups have been reported. According to Dr David Zounmenou, a senior researcher at the Institute for Security Studies, there has been a marked decrease in conflict in Africa. CAPTION Martyn Davies … ‘Politics will dictate the ultimate outcome of Africa.’