Chapter 11: General Conclusion
The exploration and development of oil and gas resources in West Africa requires strong public governance, namely that of the State acting as authority and owner of the resources, as well as sound governance of both public and private companies acting as operational contractors.
This governance framework encompasses all measures, rules, decision-making bodies, information systems, implementation mechanisms, and evaluation processes that ensure effective functioning and proper oversight of hydrocarbon sector activities by all stakeholders. In other words, it ensures robust risk management across the sector.
Beyond good governance, which implies the establishment of appropriate legal and institutional frameworks as well as transparency in the management of petroleum resources and revenues, it is now crucial for West African States to address the challenges of skills development and regional cooperation in industrialisation. This is necessary to progressively take control of resource management through the development of the entire hydrocarbons value chain, with the objective of meeting local, sub-regional, and continental energy needs within the framework of the African Continental Free Trade Area (AfCFTA), an ambitious historic project for African integration.
Thus, political stability, governance quality, and corruption levels are decisive factors in the success of the petroleum sector. Their influence extends across the entire value chain, shaping investment decisions, operational performance, and economic outcomes.
Countries capable of establishing a stable political environment, implementing robust governance frameworks, and effectively combating corruption are better positioned to fully benefit from their petroleum resources. Conversely, failure to address these challenges leads to lost opportunities, reduced investment, and socio-economic instability.
For policymakers, the priority must be to strengthen institutions, enhance transparency, and ensure accountability. For operators and investors, robust risk management and compliance strategies are essential. As the global energy landscape evolves, the importance of these factors will only increase.
Negotiation of petroleum contracts, monitoring, control, and inspection of petroleum operations (key elements of contract governance requiring strong technical capacity), as well as increased State participation in petroleum contracts in West African countries with proven resource potential, will help limit or even eliminate resource predation by International Petroleum Companies (IPCs).
The export of unprocessed hydrocarbons from West African or African subsurface resources represents a significant loss for Sub-Saharan African States in terms of industrial development, technological advancement, employment, and skills formation.
In summary, after more than half a century of petroleum resource exploitation, West African States are still far from fully mastering the petroleum industry. A substantial portion of revenues generated through poorly managed and inadequately monitored contracts does not benefit the population but instead contributes to social tensions in marginalised communities, many of which still lack access to basic services such as healthcare, education, energy, and housing.
Certain provisions in contracts signed for resource exploitation effectively place African petroleum resources under the control of international oil companies acting on behalf of foreign powers. As the saying goes: “Africa remains a fish thirsty in its own ocean.”
In light of the above, five fundamental and essential levers must be addressed by West African States, and African States more broadly, to develop a petroleum industry that benefits their populations:
- Integrated regional development policy
Adopt and operationalise a regional, integrated strategy for developing the entire petroleum value chain, from upstream to downstream. This policy should include short- and medium-term measures regarding crude oil exports, over which States have no control of price formation, and should prioritise the export of refined products or higher-value derivatives through full value-chain development.
- Technology appropriation and human capital development
Develop national expertise through training of qualified personnel across the entire oil and gas value chain, enabling States to take full control of upstream and downstream operations.
- Creation of an African Extractive Industries Development Bank
Establish a financial institution dedicated to funding national and regional hydrocarbon projects across Africa.
- Creation of a regional petroleum market
Establish a regional petroleum market supported by adequate infrastructure for refining, storage, and transport of hydrocarbons, enabling intra-African trade in petroleum products. This requires the development of industrial hubs and specialised regional enterprises across Africa to process crude oil into higher-value products for regional and international markets.
- Strengthening governance and reducing corruption
Improve governance systems to significantly reduce corruption and rent capture by small elite groups. States must establish clear institutional frameworks with well-defined and separated responsibilities to ensure transparency and effective management of resources across the entire value chain.
Final note
The long-term development of the petroleum sector in West Africa depends not only on resource endowment but fundamentally on governance quality, institutional capacity, and the ability of States to transform resource wealth into sustainable socio-economic development.