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You’ve Heard of Herman Cain’s 9-9-9. Here’s Nigeria’s 20-20-20 (And This One Might Fly)

Lately I’ve been thinking Nigeria should be a little bit more like, of all places, Iran. Yes, Iran. And maybe Alaska.  Here’s how.

Africa’s most populous nation has been a massive underperformer since independence. It’s earned hundreds of billions of dollars from petroleum exports, but the average Nigerian has little to show for it. At least three decades were lost; average incomes in the mid-2000s were the same as in the mid-1970s. More recently, the economic data has been brighter. And there is always hope that the country has finally turned a corner.

How to Turn Citizens into Owners of National Wealth

This post, co-authored with Alan Gelb, was originally published in Financial Times: This is Africa

On November 28 Anadarko Petroleum doubled the estimate of its massive Mozambique gas discovery. If this proves correct, Mozambique will become a major gas exporter and can expect a hefty windfall.

Mozambique is not alone. Per square mile, proven sub-soil assets in poor countries — notably in Africa — are only about one quarter of those in better-explored, rich countries. Not surprisingly, high prices and new technologies are driving new oil, gas, and mineral discoveries across the developing world. Billions of dollars will be pumped into countries like Uganda, Liberia, Papua New Guinea, Mongolia and Bolivia. While this should be good news, it also raises concerns.

Nigerians Demand Cheap Gas, But Fuel Subsidies Are NOT Pro-Poor

This is a joint post with Stephanie Majerowicz.

Last Sunday the government of Nigeria scrapped fuel subsidies, leading to an immediate doubling of petrol prices. This set off violent protests across the country, threats of strikes by trade unions, and was even lamented by western pundits as a sign of government indifference to the poor. Economists of course view the move as a valiant step toward fixing a deeply dysfunctional budget system. Fuel subsidies were (directly and indirectly) draining the treasury, at a cost of up to US$8bn per year, equivalent to over 25% of the federal budget.

The rub will be if the government can make the case that there’s a better way to spend its resources than through fuel subsidies. Nigerian protesters could be forgiven for being skeptical. Many see cheap gas as the only tangible benefit from their country’s vast oil wealth.

Could Uganda Be the Next Niger Delta?

That’s the question in Alain Vicky’s piece this morning in Le Monde Diplomatique (gated). Vicky warns that oil discoveries in Uganda’s Bunyoro region threaten to heighten simmering tensions between the local communities whose ground is being drilled and the central government which is pocketing the cash. Unmet expectations and popular frustration with politicians could unleash violence and do raise concerns that Uganda might be heading for a rough patch.