Moisés Naím, editor-in-chief of Foreign Policy writes in Financial Times:

Oil is a curse. Natural gas, copper and diamonds are also bad for a country’s health. Hence, an insight that is as powerful as it is counterintuitive: poor but resource-rich countries tend to be underdeveloped not despite their hydrocarbon and mineral riches but because of their resource wealth. One way or another, oil – or gold or zinc – makes you poor. This fact is hard to believe, and exceptions such as Norway and the US are often used to argue that oil and prosperity for all can indeed go together.

The rarity of such exceptions, however, not only confirms the rule, but shows what it takes to avoid the misery-inducing consequences of wealth based on natural resources: democracy, transparency and effective public institutions that are responsive to citizens. These are important preconditions for more technical aspects of the recipe, including the need to maintain macroeconomic stability, manage public finances prudently, invest part of the windfall abroad, set up “rainy-day funds”, diversify the economy and ensure the local currency does not reach too high a price.

It all sounds sensible, and with Brazil, Ghana and others soon likely to become big oil players, we can expect to witness some rare test cases of these recommendations.

Continue reading the article….

… and soft power

It is, of course, pointless to talk to al-Qaida. Their leaders cannot be attracted by American values. But the young people that Osama bin Laden wants to recruit for new terrorist attacks can be reached. That is where the soft power comes in.

His interview with Der Spiegel is here.

Now that Nigerian banks are going through theirs, what more to do than to watch a collection of ads through the years:

HT to Andrew Sullivan’s blog

BBC has a report on the West African soldiers who fought with the British forces in Burma during the second world war:

Nigerians made up more than half of the total force of 90,000 West African soldiers deployed to South East Asia after 1943 as part of the British Army’s 81st and 82nd (West Africa) Divisions.

And:

Although they were paid off for their service, some claim they were promised allowances which were never paid, despite their repeated efforts over the years.

And it is not only the money – some veterans are still bitter over what they see as a lack of recognition.

“We were supposed to get Long Service and British Empire Medals” says Dangombe.

“But up until now – nothing.”.

See the whole story here.

Also check out Biyi Bandele’s novel, Burma Boy, a novel about a Nigerian who fought in Burma during the war. Here is a review of the book.

is here.

Governor Lamido Sanusi

Mr. Lamido Sanusi, Nigeria’s not-so-long-ago-appointed Central Bank Governor, a risk-management person, is at it. From Financial Times:

“A few Nigerian banks, mainly due to huge concentrations in their exposure to certain sectors … but [also] due to a general weakness in risk management and corporate governance, have continued to display signs of failure,” Mr Sanusi said.

The banks are:

1. Afribank Plc
2. Intercontinental Bank Plc
3. Union Bank of Nigeria Plc
4. Oceanic International Bank Plc
5. FinBank Plc

The Central Bank sacked the MDs/CEOs of the banks and appointed new ones. They are also going to get some more loan from the government. From NEXT:

Backed by the confirmation of CBN governor, Sanusi Lamido, that N400 billion [$2.6bn, €1.8bn, £1.6bn] is to be injected into the five banks whose chief executives and management were sacked this morning to “enable them continue normal business”, industry insiders have asked shareholders to stop listening to and spreading rumours.

I followed the news as it unfolded on NEXT newssite. See this, this and this. Don’t forget to read the comments too.

From BBC:

Mr Sanusi said the five banks had accounted for almost 90% of exposure to the central bank’s so-called discount window, which allows banks to borrow in the short-term from the central bank to meet their needs.

“The excessively high level of non-performing loans in the five banks … was attributable to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to credit risk management practices,” he said.

Addendum
It is really nice to have a news website that is nimble on its feet. Nigerian newspapers are going to have to learn from NEXT. I think NEXT too has to find a way of dealing with a lot of traffic to their website. It must have been hit by so much request yesterday that at some point it was almost impossible to get it to load.

1. Our good old East German car, Trabant, to get a makeover. Prototype out in September

2. Check out a list of interesting anthropology blogs

3. What is the future of jazz?

4. Africa’s mobile banking revolution

5. Kola Tubosun is currently a Fulbright scholar in the US, and he is writing a travelogue

6. Jet Li sets to build a culture of charity among a population of a billion

7. Almost forgot….. Europe, it seems, is bouncing back.

NEXT has a story that says that state governors may lose control over land in their states. The story is a report of a public hearing of a House of Rep Subcommittee.

Incidentally, my BusinessDay column of this week is on a presidential committee on land reform.

I am sure that very, very soon, sometime in the nearest future, we will understand what these guys are trying to do, who they are trying to parcel land for etc etc. As someone said in a comment at the NEXT website, ‘These people must be seeing more than we can imagine.’

Amadou and Mariam’s Welcome to Mali is number 6. The review by Spin’s Lindsey Thomas:

In 2005, Dimanche a Bamako served as this blind Malian couple’s international breakout, but producer Manu Chao’s contributions — found-sound snippets, liberal use of his own vocals — sometimes overshadowed them. The follow-up (without Chao) is a more straightforward Afro-pop record, with a few exceptions: Damon Albarn mans the controls for “Sabali,” a wonderfully strange bit of electro pop that floats Mariam’s voice high above waves of synth arpeggios; and on “Africa,” Somali rapper K’naan ogles his homeland’s curves over Amadou’s buoyant guitar line.

The full list is here. HT to Sean Jacobs of Africa is a Country.

Abstract

The report provides a comparative study of the impact of Asian companies on the two leading oil producing countries in sub-Saharan Africa, Nigeria and Angola.

The report shows that Asian companies that gained a foothold in the Nigerian oil sector in return for their commitments to invest in downstream and infrastructure projects failed to understand the political context of the time.

The report considers why, in contrast, the Chinese oil strategy has been so successful in Angola to the detriment of other Asian national oil companies and international oil companies; how Angola emerged as the second largest supplier of oil to China in 2008; how Chinese oil companies have negotiated deals; and what the benefits are for Angola.

China’s experience is compared with those of India, South Korea and Japan.

The full paper is here.

I haven’t had time to read the full report yet, but here is FT’s Tom Burgis’s commentary on it – a sort of very brief summary.