East Africa Oil & Gas: Silver Bullet or Complex Remedy

A Note from the Observatory of Northeastern Africa
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"East Africa Oil and Gas: Silver Bullet or Complex Remedy"

A note by Patricia I. Vasquez, Research Associate, Graduate Institute of International and Development Studies, Geneva

Note no. 8, January 2019, Observatory of Northeastern Africa/Observatoire de l'Afrique de l'Est

Abstract:

East Africa has recently entered the global map of oil and gas exploration and production. Uganda and Kenya are about to become oil producers and Tanzania enlarged its endowment of world-class o shore natural gas reserves in recent years. Key to a successful development of the three countries ́ hydrocarbons industry is completion of the infrastruc- ture projects needed to monetize their reserves: mainly pipelines to carry landlocked oil to the coast for export and liquefaction facilities for transporting natural gas. The size, cost, and complexity of the projects pose great challenges to the development of the oil and gas sector. The quality of the sector governance in each of the three countries is also critical for securing a well-managed hydrocarbons industry, but unfor- tunately, challenges appear in the horizon. Oil decisions in Uganda and Tanzania are in the hands of a handful within the President ́s inner circle with typically little transparency. This makes it di cult to make autho- rities accountable for their actions. In the case of Kenya, management of the oil industry is more decentralized and the oil producing region has an increasing in uence on how the sector is being managed. There, di erences between the two levels of government that go beyond the mere mana- gement of the oil sector, and touch upon ethni- city and economic inequalities pose a challenge to a smooth development of the oil industry. This essay analyzes the domestic and regio- nal prospects and challenges that lie ahead for Kenya, Tanzania, and Uganda as they develop their oil and gas industries.

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