RECENTLY Nigeria was nearly brought to its knees by a crippling fuel shortage following a long-running quarrel over contested subsidy payments.
The West African country is Africa’s biggest oil producer, but imports all its processed fuel because it does not have domestic refineries.
The subsidies are just about the only benefit Nigerians say they get from their oil, and official fiddling with them for purposes of balancing the books has tended to have major political ramifications.
But (1) Nigeria is not the only African country that produces a lot of a resource internally, only to struggles to meet domestic market needs:
2: South Africa: Electricity
South Africa’s power utility Eskom produces about 95% of the country’s electricity, and nearly half (45%) of Africa’s capacity, but locals have had to contend with rolling blackouts, with the load shedding programme to stay for the next few years, officials say.
Eskom is hobbled by years of underinvestment and ageing infrastructure, and as a result the immediate economic outlook for the continent’s most advanced economy looks grimmer by the quarter.
3: Kenya: Tourism
Tourism accounts for 11% of Kenya’s Gross Domestic Product (GDP), but is facing unprecedented falls in arrivals following a spate of terror attacks that have spawned travel advisories from most of its key source markets.
The most high profile have been the Westgate attack in September 2013 and the Garissa college attack earlier this year, all claimed by Somali militant group Al-Shabaab, but they have been only some of the sustained hits since Kenya crossed into Somalia in 2011.
Arrivals fell 11% last year, the third annual fall in a row. The result has been tens of thousands of job cuts and damage to all sectors linked to the crucial industry.
4: DRC: Copper
One of copper’s biggest uses is in power generation and transmission, but for the Democratic Republic of Congo (DRC), electricity shortages are a norm.
Less than 10% of the population are connected to the national grid, with the little that is connected ironically going largely to multinational miners. Two dams on the Inga Falls produce about 1,500MW.
This is in a country that is Africa’s biggest export of copper. But with work expected to later this year begin on the third phase on the Inga dam, this could help keep copper in the vast country.
5: Botswana: Diamonds
Before the global crisis hit home in 2008, Botswana accounted for three of the 13 billion carats of rough diamonds that were on the world market.
But when it comes to the finished polished product, one of the world’s largest producers of the gems accounts for less than 5% of the globe’s estimated $20 billion worth of product. The country earns more from the regional customs union, than from diamonds.
This is because most of the cutting and polishing is done outside Botswana. And even of those located domestically, just one company has local shareholding, the rest being dominated by outsiders. The country has also been recently losing thousands of cutting jobs.
It has tried to redress this—in 2012 the world’s leading producer De Beers started some sorting operations in the country. It is a move that could see up to $6 billion of diamond trades done through the country, boosting the $4 billion in exports recorded in 2012.
6: Ivory Coast: Cocoa
The world’s largest producer of cocoa only inaugurated its first chocolate factory two weeks ago (never mind that its French-owned).
Cocoa, the “brown gold” for Ivory Coast, accounts for 22% of the country’s gross domestic product (GDP), more than half of its exports and two-thirds of people’s jobs and incomes, according to the World Bank.
While cocoa earned the country $2.1 billion last year, earnings from chocolate in the global market were nearly 60 times more. But the new factory will set the country on the path to being a world leader in cocoa bean processing, and earn it a much bigger slice of the final pie.
It would also have Ivorians munching on chocolates—the tradition has been almost non-existent in the country.
In a striking CNN programme in 2014, its journalist Richard Quest travelled to Ivory Coast and encountered cocoa farmers who had neither tasted, let alone seen, chocolate. It is not uncommon though, as in some African countries rural communities that grow coffee have never seen or tasted it in refined form, either.
7: Mozambique: Gas
The largest global gas finds of the last two decades have been made in Mozambique, but the country continues to grapple with significant electricity shortages.
Just 18% of the population have online access to the national grid, with the infrastructure a major problem—power from the CahoraBossa plant in the north to the capital Maputo first has to pass through South Africa.
The country also imports the majority of its cooking gas needs, and has thus been hit by market practices such as speculation. But this could all change.
Deals in the pipeline are expected to make the country the biggest LNG supplier after Qatar and Australia in the next decade, but gas-fired power-plants remain years away from being a reality, meaning the electricity deficits will only deepen as domestic demand rises.
The irony is that such a plant would make Mozambique a net export of power—with countries like South Africa next door potential beneficiaries.
8: Burkina Faso: Gold
The fourth largest producer of gold on the continent after the likes of South Africa and Mali, but with one of the highest poverty rates in the region, the ensuing gold rush has pulled children out of school—for a commodity they may not expect to buy locally at current income rates.
Three of every four Burkinabes are unemployed, and the country consistently ranks among the bottom 10 in the annual Human Development Index.
The western African country therefore exports nearly all of it, with proceeds usually dominated by the multinationals playing in the field, helping nurture social grouses in what became Africa’s first—and only so far—‘Black Spring’ setting.
9: Lesotho: Water
The economic benefits of the Lesotho Highlands Water Project to the tiny kingdom are immense, earning it at least $45 million annually for hundreds of milions of litres.
South Africa is the major beneficiary, with the exports seen as an example of economic integration. Many argue it is an arrangement that benefits only one country, and the elites in the other.
But Lesotho, despite being mountainous, struggles with drought and unreliable rainfall, while thousands of its people go without reliable access to water.
10: Egypt: Wheat
Egypt has consistently topped the wheat production tables in Africa—it is projected to grow 8.5 million tonnes this year, at least two million above the nearest challenger, Morocco, according to the FAO.
But even this is not enough—it will import nearly four million tonnes more than Algeria going into 2016, and a third more than it grows, with not even a bushel as surplus, and shortages are not unheard of.
Wheat subsidies are a matter of life and death in the country, and often mesh inextricably with politics.