Africa no question is blessed with vast natural resource rich environments. These resources constitute a principal source of public revenue and national wealth. Crude oil and natural gas, in particular, contribute significantly to the economies of resource rich African countries. Under the right management, oil or natural resource boom can be an important catalyst for growth and development for many African countries.
But we also know that Africa has never been considered an easy destination to do business in relation to many of the other continents. When it comes to doing business often Africa is labeled with negative terms like nationalization’, ‘politically risky’, ‘poor infrastructure’, ‘skills scarcity’ and ‘corruption’. Yet Africa is now being a thrust on to the global oil and gas centre stage, and this untapped resource has the potential of transforming Africa if well managed.
Africa growing investment and booms in the areas of oil and gas has also brought in unfounded fears in terms of whether Africa will benefit in the process looking at all the negative factors facing Africa. The obvious question is will the natural resource wealth lead to the expected economic growth and development hoped for?
Yes, the new oil and gas discoveries in Africa have the power to be drivers of development in the continent, if managed effectively. However, many potential obstacles that have plagued resource rich countries before, including weak institutions, inadequate macroeconomic policies, poor governance and lack of profit-sharing mechanisms among the relevant stakeholders could threaten and even derail effective use of these resources to improve the lives of people.
Of course some of these question have been lingering in the minds of Malawians following the announcements on the prospect of oil and gas under Lake Malawi. This prospects of oil and gas holds great hope for Malawi in terms of economic growth and development being one of the poorest countries in the world. Malawi with an economy dependent on agriculture and with lowest GDP per capita, the oil wealth could transform Malawi’s economy.
With this dilemma therefore, it must the responsibility and duty of government complimented by the civil society to bring hope as well as ensuring Malawians see the benefits of this wealth. Malawians must know that the oil venture will create jobs and promote business development. And it is through such participation that we will develop a nation with skills, so that at the end of the day when the oil wealth is gone, we will have an economy with skilled people and skilled business.
It important to take note of government initiative in pushing for transparency and steps taken in signing the Extractive Industry Transparency Initiative (EITI) is very encouraging and commendable. And government assurance to Malawians on safety of Lake Malawi including the World Heritage Site which when granting the licenses was emphasized to the investors is another welcome development. Therefore, government must continue to assure Malawians not to worry in regard to environmental issues in the lake as currently buffer zones have been created surrounding the national Park in the lake.
For sure what Malawians need is this assurance in view of how the country mis-managed in uranium mining in regard to the calls on environmental risks and corporate social responsibility issues which are of the great community concern.
And for us to manage effectively, the International community must continue helping to build the capacity for both government and the civil society around issues of extractive industry. They should refrain from discouraging the nation from venturing into viable projects such as on oil and gas, a project which has the potential to transform our country to prosperity, hence making us completely move away from donor dependence. This is very much possible and with our positive altitude collectively we will.
A country like Norway can help us learn how the oil and gas reserves under the continental shelf are being transformed into financial reserves for the future generation. Norway’s wealthy is no surprise, it is the world fifth largest oil exporter with annual oil revenues of around $40 billion and boasts a vibrant and diversified economy that spreads prosperity widely within the Norwegian society.
This is in contrast with many other oil producing countries where oil generate revenues that make the governing elites fabulously wealthy, while the rest of the citizen depend on their leader’s handouts or upon trickle-down economics for their share.
Therefore, how Norway has invested in its institutional growth, infrastructure, job creation and management of its oil wealthy could offer some valuable lessons to many countries like Malawi. This is the role the international community can play for the better management and benefit of the oil venture Malawi is embarking on, and not scaring us because in any progress they must be a beginning whether risky but we have to start and perfect on as we move forward in our journey to national prosperity.
The local and international NGOs must also help in disseminating the right information based on objective research that will add value to the national developmental programs hence complimenting government efforts in making our country a better place. They must stop creating confusions, unjustifiable fears and uncertainty to Malawians that we cannot manage this oil venture.
Our local NGOs and civil society must refrain from being manipulated by the international NGOs to fulfill hidden agendas of frustrating our national developmental projects with the aim of keeping us in perpetual bondage of poverty. The NGOs and civil societies role must be to advocate and lobby for a conducive environment to enable us manage such ventures effectively for our benefit.
No doubt the oil and gas riches are the next major driver of economic growth and upliftment not only for Malawi but Africa as a whole. We cannot be negative even before the experience. Therefore, the choice is ours and not for the investors or the international community or NGOs, for us to move forward in prosperity otherwise we will continue to live in perpetual poverty as a nation. (
By Undule D.K. Mwakasungula – (Governance, Human Rights & Social Expert)