Africa strikes oil, but economies strike out

Biggest fuel finds do little to create prosperity at home

- PAUL BURKHARDT AND KATARINA HOIJE

Domestic markets across Africa are no match for the lucrative ones beyond the continent. Foreign companies balk at developments that don't target export markets, leaving local economies with limited access to their own gas that can be used to generate electricity for homes and industry.

The last thing Senegal needed in its long-drawn-out effort to capitalize on large oil and gas finds off its coast was political turmoil.

Africa's newest natural gas superstar had bubbled with optimism when BP, Woodside Energy Group and Kosmos Energy agreed to develop the fields off the shores of the West African country a few years ago. The finds were touted as a game changer in a country where villages are still not connected to the power grid and more than a third of the inhabitants live in poverty.

"General electrification for the entire population will become a reality," Sokhna Ba, the youngest member of Senegal's parliament, said in an interview in the capital Dakar late last year. "The revenue could also be used to improve the living conditions of the population."

But a string of delays in BP's $4.8billion (all figures U.S.) Grand Tortue Ahmeyim, or GTA, gas project, with the latest coming just last month, has meant it won't happen soon, prompting the country to say it may miss the International Monetary Fund's economic growth forecast in 2024. Now, matters have been made worse by a bid to delay elections that extends President Macky Sall's term by almost a year, throwing the country that is among the most stable democracies in West Africa into crisis and raising the cost of funds needed for its energy aspirations.