African Oil Industry Suffers from Piracy; Challenges Ahead for Ghana

August 2012

The rise in piracy off of various coastal regions in Africa has the entire world concerned, and African states are scrambling to address the issue.

The waters off of east Africa are the most infamous, as Somali pirates have gained quite a murderous reputation for marauding in the Indian Ocean. But equally damaging is piracy off the west coast. The Gulf of Guinea, and Nigeria in particular, has seen a recent rise in piracy that is just as troubling as what’s happening in the east. Finally, even the south has seen pirate activity– the Mozambique channel and Cape of Africa have also seen an uptick.

For now, the Somali pirates still lead the world in number of attacks. In 2011, there were 439 acts of piracy in the world, and over half of them occurred off the Horn of Africa. In previous years, the global hotspot for piracy was Southeast Asia– Strait of Malacca and many archipelago nations made it easy for these criminals to thrive.

While pirates in the east make their biggest scores off of holding hostages for enormous ransoms, pirates in the west are oil thieves. Nigeria is the continent’s top oil producer, and much of the offshore drilling activity is plagued by piracy. The International Maritime Organization estimated that countries in the Gulf of Guinea lost over $1 billion USD due to piracy. As oil prices rise, and local nations struggle to thwart attackers, piracy in west Africa couple become a lucrative enterprise.

Fortunately, international navies have addressed the inefficiency of local authorities to stop pirates in the east. Thanks to joint naval task-forces heavily policing waters in the Indian ocean, the number of piracy incidents has seen a steady decline in recent months. Part of the decline is also due to shipping companies wising up– far more hire armed guards and make anti-pirate best-practices part of their everyday routine.

However, when looking at the numbers of the decline, a disturbing trend becomes evident. Because Somali piracy formerly took up such a huge percentage of worldwide incidents, the sharp drop in it gives the impression that the global problem is in decline. The reality is, piracy in the Indian ocean has dropped at a greater rate than that of piracy worldwide, meaning that this drop is off-set by a rise in other regions when the numbers are looked at as a whole.

And of course, the increase in piracy is happening off the west coast of Africa. One country of interest in particular is the nation of Ghana. While Ghana has not recently experienced the piracy epidemic that other nations have, there is a large possibility for this occurring in the near future.

Having just discovered oil and natural gas reserves off their coast, Ghana is in the process of exploration, and hopes to soon become an exporter. As is often the case, Ghana’s industry may evolve faster than its security apparatus to protect it. If that is the case, due to the general instability in the country and hasty desire for economic growth, the burgeoning oil industry could be at risk.

Ghana is fortunately taking steps to educate those in its shipping industries and maritime governmental offices. The country recently held seminars to update interested parties with the most current outlook and challenges the shipping industry faces. For a country that generates almost three-quarters of its revenue from shipping, the coming years will be very vital in shaping the country’s future.