The extraction of oil and gas has been a mixed blessing for states on the African continent. One only needs to look at the unhappy histories of some of Africa’s largest producers – past and present – to realise that there have often been few blessings, if any at all. From Nigeria and Angola to Chad, the Republic of Congo and Gabon, oil and gas extraction has contributed to either corruption, violent conflict or – frequently – both.
A major factor behind this has been a lack of commitment to transparency by the very state institutions meant to oversee the oil industry. In Senegal, however, the new government of President Bassirou Diomaye Faye and Prime Minister Ousmane Sonko is determined to do things differently.
Senegal is a newcomer on the oil and gas scene; huge offshore discoveries are only a few years old. The Grand Tortue Ahmeyim field, jointly managed by Senegal and Mauritania, is said to contain 425-billion cubic metres of gas. The Sangomar oil field, a little south of the capital Dakar, reportedly holds 630-million barrels of oil. Both fields are now in production, with others expected to come online before the end of the decade.
Senegal’s growth rate is forecast to reach a jealousy-inducing 9% this year and close to 7% in the years that follow, according to the London-based Economist Intelligence Unit. More than $1bn is expected to flow into the country annually – a significant amount, considering GDP is projected at $33bn in 2024.
But how do you manage all that wealth? The new authorities believe they have an answer: transparency and openness.
That was the message from one of the key state players in this emerging sector, Khadim Bamba Diagne, permanent secretary to the Strategic Oil and Gas Orientation Commission, or COS Petrogaz. It’s an institution created by presidential decree in 2016 to help the president and government formulate policy for managing the oil and gas sector. Currency sat down with Diagne at the Africa CEO Forum in Abidjan last month.
Doing things differently
“What we have seen on the African continent is that, despite the presence of oil and gas, the countries that hold these resources remain poor,” Diagne told Currency. “So we must ask ourselves: what is the effect of oil and gas on the development of these countries?”
The danger, he said, is that the few enrich themselves at the expense of the broader population. To prevent this, Senegal should heed the mistakes others have made.
“For us, that means total transparency. These resources belong to the people, and everyone should know how we manage them. It’s an obligation.”
Mind you, this change of tack almost didn’t happen. When rumours of oil and gas riches beneath the deep sea first surfaced over a decade ago, a minor oil rush ensued. Alongside start-ups, pioneers and a few major players, there was the almost inevitable rogue operator. Admitted by the government of former president Abdoulaye Wade (2000-2012), he contributed little and was eventually paid off to leave the scene.
During this period, Wade was defeated by one of his political protégés, Macky Sall, who gradually reverted to the rather informal and cavalier style that had characterised Wade’s administration.
Two politicians raised concerns about the opaque manner in which the government was managing the oil and gas sector: Abdoul Mbaye and a rapidly rising star by the name of Ousmane Sonko.
Sonko went on to write an explosive book about the budding oil industry. Titled A Chronicle of Plunder, it exposed alleged government corruption, implicated several ministers and members of the president’s family, and called for legal action against key figures – including the president’s brother. The book was published in France in 2017, banned in Senegal for a time, and ultimately got Sonko fired from his post as a state tax inspector. Naturally, Diagne has read it.
“Sonko gave us a roadmap,” he says. “He knows and understands the problems, and we are trying to rectify the issues he pointed out. We do not want business as usual. We want a break with the past.”
Development over personal enrichment
Diagne is part of a new cohort ushered in by the election victory of Sonko and Faye – another former tax inspector and one of the youngest elected heads of state on the continent. They ran against Sall’s hand-picked successor, Amadou Ba – the very man who had fired Sonko.
Diagne summarises the new administration’s message, which resonated especially with Senegal’s youthful electorate: “We are making it clear that today’s Senegal is no longer yesterday’s Senegal.”
By which he means that contributing to the nation’s development now takes precedence over personal enrichment. And if that reads as criticism of past governments, so be it.
A key plank in the reform agenda is ensuring that companies operating in Senegal – including BP, Kosmos Energy, Woodside Energy and Total – pay their taxes. On that, Diagne is unequivocal: “We are a stable nation. But that stability has a price. We invest large sums in essential services that don’t generate income – like the armed forces, the police and education. To sustain them, we need tax revenues from other sectors.”
The country wants to avoid the situation where the large multinationals operating in the country simply repatriate all their profits. “A company that operates here must pay taxes – just like I do as a Senegalese citizen. Any company that feels wronged can go to court. National and international procedures exist, and we respect them.”
The new government’s ambitions go further. It plans to dramatically increase refining capacity to reduce fuel imports and, crucially, lower electricity costs – a long-standing burden on energy consumers.
Beyond Senegal’s borders, the administration hopes to use its influence to bring other oil and gas producers – like fellow newcomer Côte d’Ivoire – into talks on harmonising regulatory frameworks. The ultimate goal: making the dream of resource-led development a reality.
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