The prospect of oil under Lake Nyasa (known as
Lake Malawi in Malawi) holds great promise for one of the poorest
countries in the world. With an economy dependent on agriculture and one of the
world’s lowest GDP per capita, oil wealth could revolutionise the
fortunes of Malawi’s economy.
At the same time, however, the experiences of some other oil
rich nations on the continent point to a different possible ending, courtesy of
the so-called ‘resource curse’ whereby instead of contributing to a stronger
economy and prosperous society, the valuable asset facilitates the rise of fat
cat oil barons, institutionalised corruption and environmental catastrophe
while the general populace is left in the same, if not greater, poverty as

The lucky few
Ghana provides one relatively positive example Malawi could follow. In
Ghana, awareness of oil management best practice alongside international
scrutiny of the fledgling industry has afforded civil society a loud voice. A report
released by Ghana Civil Society Platform on Oil and Gas, for example, addressed
holes in Ghanaian oil law and was trumpeted as “a big milestone” for
Ghanaian civil society by Moussa Ba, Oxfam America’s West Africa regional
coordinator for extractive industries.
Unfortunately, however, even tentative success stories like
the Ghanaian case are few and far between. In West Africa, the roads travelled
have been varied, but the ultimate destination for many countries has been the
same: The enrichment of a few at the expense of development for the many.
In Nigeria, exports of around two million barrels per
day has been accompanied by endemic and institutionalised corruption: oil
governs politics, rewarding petroleum “playboys” while the average
Nigerian can expect to earn $2,000 per year before dying at the age
of 52. Not to mention the environmental catastrophe in the Niger Delta.
Just down the coast, the Obiang clan of Equatorial Guinea is
filled with poster boys for mismanagement and impunity. Imposing
journalistic blackout since the mid-2000s, President Teodoro Obiang has
provided international guests with purpose built villas and Cadillacs off the
back of enormous GDP growth whilst simultaneously providing his people with one
of the worst human rights records in the world.
Further down the coast, Angola is an oil
industry darling. Yet the exclave province of Cabinda showcases the worst
of the injustice wrought by the oil industry. On the Malongo compound, oil
workers have their pick of facilities: organic vegetables, tennis on manicured
lawns and, just outside the gate, a plethora of young destitute Angolan women
forced to straddle the fine line between take-away bride and prostitute.But
Africa’s tyrants are not the only ones to blame.
High up in glittering office buildings in Lagos, London and
Houston sit oil executives exploiting legal loopholes and corporate social
responsibility rhetoric to operate in high risk zones without damage to their
reputations, and enormous benefits to their bank balances.

The signs coming from Malawi so far are mixed. According to Ibibia
Worik, an extractives expert at the Commonwealth Secretariat, “A
discovery would transform the Malawian economy from its current struggles into
a multi-billion dollar one in an instant”.
The mechanisms by which such enrichment should, indeed must,
take place are well known: transparency around the allocation of licenses and
revenues; the establishment of an oil revenue management fund; and ongoing
investment in other productive areas of the economy. Such measures would
provide citizens with the means to hold their governments to account over oil
governance, and an assurance of continued stability when wells run dry.
President Joyce Banda showed a deft hand and lack of
patience regarding rumours of corruption around the allocation of an
exploration license. Launching probe in August this year, she told the press,
“We have heard that there were underhand dealings in this contract so we
would like to find out the truth”.
But aside from launching the probe, Banda has given little
signal of how oil will be managed. The lack of discussion around how revenues
will be distributed to ordinary Malawians is unnerving, as is the silence on how
she intends to safeguard fishing communities dependent on the lake from the
inevitable impacts of large-scale oil exploration. Banda will need to show a
firm hand here too if the murky waters surrounding contract allocation are
anything to go by.
If Banda and her cabinet get it right, Malawi could act as a
leading light for those others in the region that are being swept along in the
gold rush. If they get it wrong, the consequences will be dire not just for the
country, but the region as a whole.The oil under Malawian territory does not
belong to politicians, oil executives or militia men, but to the people of
Banda and her government have a duty to ensure ordinary
Malawians see the benefits of this wealth, but the buck does not stop there.
The international community must also shine a spotlight on Malawi, show no
tolerance for opacity around its oil dealings, and support its leaders to allow
oil wealth to be a blessing and not a curse.

Source: The Guardian UK


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