Policy Brief - Africa Oil Governance Report 2016


Africa has vast petroleum resources which when utilized efficiently, can accelerate economic growth and development. Translating natural resource wealth into sustainable development depends to a large extent on good governance. Good governance calls for utmost attention in Africa as the region’s oil industry is bedeviled by several governance challenges. According to the African Progress Report 2013, harnessing the natural resource potential of Africa will largely depend on the ability of African Governments to strengthen fiscal policy formulation, equitable public spending in infrastructure and adhering to transparency and accountability in the management of resources. The Africa Oil Governance Report (AOGR), a flagship publication by the Africa Centre for Energy Policy (ACEP), therefore presents the governance efforts of the eighteen member countries of the African Petroleum Producers Association (APPA) in their management of extractive resources. It also identifies the gaps in their governance structures, and how these gaps can be addressed through policy, legal and institutional interventions; therefore serving as a wake-up call to African governments to strengthen their resource governance policies, systems and institutions. In this, it provides stakeholders with relevant governance information on oil producing African countries to influence policy decisions along the oil extraction value chain. 

Governance Indicators

In order to ensure efficient management of natural resources, resource rich countries need to take a wide range of decisions along the natural resource value chain and make effective policy choices to implement these range of decisions. The natural resource value chain consists of processes from discovering the resource and deciding whether or not to extract the resource; securing sufficient government revenue from its extraction; maximizing associated benefits while minimizing cost such as environmental impacts; and managing, allocating and investing the revenues for sustainable development. In view of this, eleven (11) governance indicators under three (3) thematic areas have been selected to ascertain the strength of oil governance in African oil producing countries: Resource Management: Open and Competitive Bidding Process for allocating oil and gas rights; Mandatory Contract Disclosure; Environmental Impact Assessments; and Free Prior and Informed Consent (FPIC). Fiscal Management: Open Budgeting; and Distribution of Resource Revenues to Communities Affected by Extraction. Transparency and Accountability: Adoption of International Governance Initiatives; AntiCorruption Provisions; Mandatory disclosure of Beneficial Ownership Information; Public Accountability Institutions; and Right to Information Legislation.

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