The outlook of oil under Lake Nyasa in Malawi possesses great wealth and fortune for one of the poorest countries in the world. Malwai’s economy is greatly reliant on on agriculture and one of the world’s lowest GDP per capita, oil wealth could reform the fortunes of Malawi’s economy.
However with this said, the experiences of some added oil rich nations within Africa indicate a different potential ending, courtesy of the so-called ‘resource curse’ whereby rather than contributing to a sturdier economy and thriving society, the valuable asset facilitates the rise of fat cat oil barons, institutionalised corruption and environmental disaster while the general masses are left in the same, if not larger, poverty as before.
Ghana provides one relatively positive example Malawi could follow; awareness of oil management best practiced alongside international scrutiny of the fledgling industry has afforded civil society a loud voice. For example, addressed holes in Ghanaian oil law announced “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 roughly earn $2,000 yearly.
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.
High up in glittering office buildings in Lagos, sit oil executives exploiting legal loopholes and corporate social responsibility rhetoric to operate in high risk zones without damage to their reputations, and the enormous benefits to their bank balances.
Back to Malawi…
The signs coming from Malawi so far are mixed. Oil and Gas discoveries 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.
But aside from launching the probe, Government has provided little signal of how oil will be managed. The lack of discussion around how revenues will be distributed to ordinary Malawians is discomforting, 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. Malawi could act as a leading light for the additional countries 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 Malawi.
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.
