New approaches to volatility: Dealing with the 'resource curse' in sub-Saharan Africa

International Affairs

Volumn 81, Issue 2, 2005, Pages 311-324

  Shaxson, Nicholas ^a  

^a NONE

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EID: 15844423057     PISSN: 00205850     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1468-2346.2005.00452.x     Document Type: Article

References (51)

1. Federal Republic of Nigeria, Third National Development Plan, 1975-80 (Lagos, 1975). In Keith Panter-Brick, ed., Soldiers and oil: the political transformation of Nigeria (London: Frank Cass, 1978), p. 153.
2. Xavier Sala-i-Martin and Arvind Subramanian, Addressing the natural resource curse: an illustration from Nigeria (Washington DC: IMF, July 2003), p. 4. The figures are in 1995 prices.
3. Sala-i-Martin and Subramanian, Addressing the natural resource curse (Washington DC: IMF, July 2003), p. 4. The figure is 36% in 1970 and 70% in 2002.
4. See Saji Thomas and Sudharsan Canagrarajah, Poverty in a wealthy economy: the cose of Nigeria (Washington DC: IMF, July 2002), p. 21.
5. See e.g. Menachem Katz et al., Lifting the oil curse: improving petroleum revenue management in sub-Saharan Africa (Washington DC: IMF, 2004), p. 3.
6. In IMF Survey, 15 March 2004.
7. The privatization proceeds of $30 million (Economist Intelligence Unit country report on Gabon, second quarter 1999) compare with an estimated $3 billion construction cost.
8. Small-scale production began in October 2004 following new investment by an Indian company.
9. See Sala-i-Martin and Subramanian, Addressing the natural resource curse, p. 14.
10. Gelb et al., 'Political economy of fiscal policy in oil-producing countries', in Fiscal policy formulation and implementation in oil-producing countries, p. 85.
11. See e.g. Thomas Baunsgaard in J. H. Davis et al., eds, Fiscal policy in Nigeria: any role for rules? (Washington DC: IMF, July 2003), p. 7.
12. See Eghosa E. Oghasae, Crippled giant: Nigeria since independence (London: Hurst, 1998), p. 97.
13. In Poverty in a wealthy economy: the case of Nigeria (Washington DC: IMF, July 2002), p. 6.
14. Republic of Congo: selected issues and statistical annex (Washington DC: IMF, July 2004), p. 12a.
15. See e.g. Panter-Brick, Soldiers and oil, p. 159.
16. See Sala-i-Martin and Subramanian, Addressing the natural resource curse, p. 14.
17. From Olivier Vallée, 'Les cycles de la dette', Politique Afrcaine 31, pp. 15-21, Oct. 1988.
18. To CFA 50 billion. From Vallée, 'Les cycles de la dette'.
19. Cameroon's production rose from 13,000 barrels per day in 1978 to 180,000 by 1986.
20. At current prices. See Terry Lynn Karl, The paradox of plenty: oil booms and petro-states (Berkeley, CA: University of California Press, 1997), table A-9.
21. See Oghasae, Crippled giant, pp. 90-100.
22. Republic of Congo: selected issues and statistical annex, July 2004, p. 12a.
23. Achieving and maintaining price stability in Nigeria (Washington DC: IMF, June 2003), p. 5.
24. Dhaneshwar Ghura, Private investment and endogenous growth: evidence from Cameroon (Washington DC: IMF, Dec. 1997), pp. 6ff.
25. From Karl, The paradox of plenty, table A-9.
26. Poverty in a wealthy economy: the case of Nigeria, p. 13.
27. See Douglas A. Yates, The rentier state in Africa: oil rent dependency and neocolonialism in the Republic of Gabon (Trenton, NJ: Africa World Press, 1966), pp. 125ff.
28. From http://earthtrends.wri.org, last accessed 16 Feb. 2005. World Resources Institute, quoting World Bank data.
29. IMF website, Angola section, http://www.imf.org/external/country/AGO/ index.htm, accessed 16 Feb. 2005.
30. IMF, Angola 2003 Staff Report for Article IV consultation, Sept. 2003, p. 6.
31. IMF, Angola 2003 Article IV consultation, Sept. 2003, p. 34.
32. IMF, Angola 2003 Article IV consultation, Sept. 2003, p. 35.
33. This deal has been widely documented in the French media.
34. According to the IMF, 'A policy framework, underpinned by a transparent fiscal rule for the judicious use of oil resources, could have led to a smoother consumption - investment profile and contributed to avoiding the significant output collapse and the conflicts', Republic of Congo: selected issues and statistical appendix (Washington DC: IMF, 2004), p.18.
35. Equatorial Guinea: selected issues and statistical appendix (Washington DC: IMF, Dec. 2003), p. 8.
36. See IMF, Fiscal policy formulation and implementation in oil-producing countries (Washington DC: IMF, 2003), p. 15.
37. Patrick Chabal, 'The quest for good government and development in Africa: Is NEPAD the answer?' International Affairs 78: 3, July 2002, p. 451.
38. See Gelb et al., 'Political economy of fiscal policy in oil-exporting countries', in J. M. Davis et al., Fiscal policy formulation and implementation in oil-producing countries, p. 111.
39. Gonzalo Pastor and Jose Giancarlo Gasha, Angola's fragile stabilisation (Washington DC: IMF, May 2004).
40. 'OGE aprovado por maioria relativa', Jornal de Angola, 15 Dec. 2004.
41. See IMF, Nigeria 2004 Article IV consultation, Aug. 2004, p. 10.
42. See press statement from IMF First Deputy Managing Director Anne Krueger at the conclusion of a visit to Nigeria, 4 Dec. 2004, www.imf.org/external/ country/NGA/index.htm.
43. See e.g. James A. Daniel, 'Hedging government oil price risk', in IMF, Fiscal policy formulation and implementation in oil-producing countries.
44. See e.g. Nancy Birdsall and Arvind Subramanian, 'Saving Iraq from its oil', Foreign Affairs 83: 4, July/August 2004.
45. See Daniel Yergin, The prize: the epic quest for oil, money and power (New York: Simon & Schuster, 1993), p. 592.
46. For a wider discussion of oil contracts, see e.g. the section on Angola's oil revenue in Angola: selected issues and statistical appendix (Washington DC: IMF, 2003) pp. 73ff.
47. Published examples of contract structure are rare, but Angola's Revista Energia published one from Cabinda Block o Joint Venture, where a 50% price rise from $10 to $15/bbl produces an 82% rise in government receipts, while IOC profits rise by 9%. See Jorge Vandeste (then director of negotiations for Sonangol), 'Os Contratos da Associaçao de Cabinda', Revista Energia, Oct. 1999. Shell has published data on its website about its Nigeria memorandum of understanding (also relating to a joint venture) which shows that a 200% rise in oil prices, from $10/bbl to 30/bbl, translates into a 371% rise in Nigerian revenue, but only a 113% rise in the lOC's revenue. It would not be right to single Shell out in this instance: this is a pattern common to many different types of contract, including production-sharing contracts. See http://www.shell.com/home/Framework?siteId=nigeria&FC2=/nigeria/html/iwgen/ leftnavs/zzz_lhn2_2_1.html&FC3=/nigeria/html/iwgen/about_shell/ structure_oil/memo_understand/dir_mou_1203_1010.html.
48. Published examples of contract structure are rare, but Angola's Revista Energia published one from Cabinda Block o Joint Venture, where a 50% price rise from $10 to $15/bbl produces an 82% rise in government receipts, while IOC profits rise by 9%. See Jorge Vandeste (then director of negotiations for Sonangol), 'Os Contratos da Associaçao de Cabinda', Revista Energia, Oct. 1999. Shell has published data on its website about its Nigeria memorandum of understanding (also relating to a joint venture) which shows that a 200% rise in oil prices, from $10/bbl to 30/bbl, translates into a 371% rise in Nigerian revenue, but only a 113% rise in the lOC's revenue. It would not be right to single Shell out in this instance: this is a pattern common to many different types of contract, including production-sharing contracts. See http://www.shell.com/home/Framework?siteId=nigeria&FC2=/nigeria/html/iwgen/ leftnavs/zzz_lhn2_2_1.html&FC3=/nigeria/html/iwgen/about_shell/ structure_oil/memo_understand/dir_mou_1203_1010.html.
49. Published examples of contract structure are rare, but Angola's Revista Energia published one from Cabinda Block o Joint Venture, where a 50% price rise from $10 to $15/bbl produces an 82% rise in government receipts, while IOC profits rise by 9%. See Jorge Vandeste (then director of negotiations for Sonangol), 'Os Contratos da Associaçao de Cabinda', Revista Energia, Oct. 1999. Shell has published data on its website about its Nigeria memorandum of understanding (also relating to a joint venture) which shows that a 200% rise in oil prices, from $10/bbl to 30/bbl, translates into a 371% rise in Nigerian revenue, but only a 113% rise in the lOC's revenue. It would not be right to single Shell out in this instance: this is a pattern common to many different types of contract, including production-sharing contracts. See http://www.shell.com/home/Framework?siteId=nigeria&FC2=/nigeria/html/iwgen/ leftnavs/zzz_lhn2_2_1.html&FC3=/nigeria/html/iwgen/about_shell/ structure_oil/memo_understand/dir_mou_1203_1010.html.
50. See IMF Survey vol. 33, 15 March 2004.
51. For example, revenues are calculated not according to current prices, but according to, say, 60% of this year's oil price, 30% of last year's oil price, and 10% of the oil price the year before. Moving averages would be useful for budget planners, as 40% (in this example) of oil revenues are known in advance; one need forecast only the remaining 60%. This is over-simplified; but this example shows how one can make up rules to smooth revenues without having to use benchmarks or price forecasts, which have been reasons for the collapse of past price stabilization mechanisms.