Oil fund for Africa has no money

A proposed oil fund, the Africa Petroleum Fund, established to support non-oil exporting African countries is empty because member states of the African Union (AU) are reluctant to make contributions into the fund. Since its inception in 2010 no country has contributed to the fund.

Member states and oil companies doing business in Africa were required to contribute to the fund.

Speaking in an exclusive interview in Addis Ababa, Ethiopia , Dr. Maxwell Mkwezalamba, the AU Commissioner for Economic Affairs told ghanabusinessnews.com that since the completion and submission of all studies on the fund in 2010 and its adoption, no country has contributed to the fund. He said the countries have not been keen to contribute to the fund.

“The suggestion by the countries to make contributions to the fund voluntary underscored their reluctance,” he said.

Dr. Mkwezalamba said it is the oil exporting countries that are more reluctant to contribute to the fund. There are few oil exporting countries in Africa.

He said African Heads of State agreed to set up the fund at a meeting in Sudan in 2006 in response to rising world market prices of oil. The fund was to cushion oil importing countries from the effect of the rising prices of oil.

The countries also rejected as one of the options, the recommendation to look at taxes exporting countries earn on hydrocarbons as one of the sources of resourcing the fund, he said.

Joint studies were undertaken and successfully completed by the Commission and the African Development Bank, on the impact of the high oil prices on the African economies and the operational modalities for the establishment of the African Petroleum Fund and the Declaration and the Road Map on the operationalization of the Fund were adopted by the Conference of African Ministers responsible for Hydrocarbons on December 11 2009.

By Emmanuel K. Dogbevi, in Addis Ababa, Ethiopia