Forum calls for stronger African natural resources control

As the battle for Africa’s natural resources continues, there is need to ensure that the abundance of wealth is used to transform the economies of countries on the continent.

That was the consensus of the 6th Tana Forum on Peace and Security in Africa held in Bahir Dar in Ethiopia last week.

The focus was on natural resource governance in Africa, where the lack of transparency and accountability has negatively impacted on the lives of people who should benefit from their oil, gas and mineral assets. It also discussed the African natural resources being used for the development of the continent.

The African Union’s Agenda 2063 calls for the continent to maximise the benefits of its natural resources to improve the lives of Africans.

However the Forum noted that with the shift in the global political environment, a new scramble for the continent’s natural resources had evolved and that while investors were bringing investments into Africa, there were obvious cases where the costs associated with the loss of the resources were more than the benefits from the investment.

The Participants pointed out that even where the investors had been involved in Corporate Social Responsibility (CSR), the rate of extraction of the natural resources had not been matched with accrued benefits to the communities.

“Investors leave behind huge environmental challenges which national governments have to address,” the Forum noted.

The “Global Witness” in early April, came out with a report that accused Shell of being part of a “vast bribery scheme that robbed Nigerians of over a billion dollars”.

The claim was based on the internal emails from Shell, which were exposed by the Global Witness, showing how “the world’s fifth biggest company took part in a scheme which deprived Nigeria and its people of $1.1 billion in a murky deal for access to one of Africa’s most valuable oil blocks, known as OPL 245”.

The role of non-governmental organisations (NGOs) in helping to police natural resource extraction in Africa was acknowledged by the Tana Forum, which called on them to “provide the necessary checks and balances…and to ensure the promotion of the rule of law and accountability”.

Global Witness said of the Nigerian bribery case: “For years, Shell has denied it did anything wrong, but today’s emails show they knew the money would be diverted to private hands, and they went ahead with the deal anyway.

“This is devastating for the people of Nigeria.

“Right now five million of them face starvation.

“The money paid for the block equates to one and a half times what the UN says is needed to respond to the current famine crisis.

“But the Nigerian people saw none of the benefits,” Global Witness added.

The emails showed that senior Shell executives “knew the massive payment for the oil block would go to Dan Etete – a convicted money launderer and former Nigerian Oil Minister”.

The NGO, which focuses on exposing the “hidden links between demand for natural resources, corruption, armed conflict and environmental destruction”, said that Mr Etete spent some of the backhander he received from Shell on a private jet, armoured cars, and shotguns.

“The emails also show Shell’s top brass were told that the money was likely to flow to some of the most powerful people in the country, including then President Goodluck Jonathan,” the Global Witness report said.

“Shell portrays itself as an oil company that does good.

“Yet our investigation reveals a story of hypocrisy and deception, and finds the company’s most senior bosses depriving Nigeria of life-saving funds by going ahead with a dodgy deal that they knew was a vast bribery scheme.

“It’s one of the biggest corruption scandals in the history of the oil sector.”

It is in this light that participants at the Tana Forum called for the continent to come up with systems free from rent seeking behaviours for countries to have the full benefit of natural resources, adding that “transparency, and accountability should be institutionalised across all stages of natural resource management and governance”.

The Shell report comes in the midst of President Muhammadu Buhari’s much-vaunted fight against corruption.

In the Shell case in Nigeria, the company was suspected not to have been delivering for its shareholders either, according to the Global Witness report.

This is because when Shell sold its drilling lease in the troubled Niger Delta to Nigerian Benedict Peters and his company Aiteo, the oil giant was lifting 23,000 barrels a day but Aiteo has been able to reach an output of 90,000 barrels a day.

Aiteo’s success is in line with the Nigerian government’s long-held position of encouraging local companies to take charge of oil drilling, although indigenisation of the sector has not been at the stage that the government would like to see it.

However, Mr Peters, who spoke to journalists recently, was quite upbeat about the prospects for his company, which he said would, with new sites, increase production to 150,000 barrels of oil a day and 5.6 million cubic metres of gas daily.

“We have shown by our story that indigenous oil companies are competent,” he said.

This would create “a transformed energy sector that creates wellness and economic prosperity”.

Over the years, various Nigeria governments spent some $10 billion buying back oilfields as the country tried to take control of its natural assets. 

The Tana Forum therefore noted that Africa needed to review its policies, regulations, and systems to ensure a level playing field in the natural resources sector.

Mr Peters, who borrowed from local banks to buy the Niger Delta lease, has been critical of the country’s dependence on oil without the backing of a strong local industry and a support to diversify the economy so that a drop in oil prices does not affect the country’s economy.

“As long as Africa continues to lose its natural resources to global actors, the continent will continue to face discontentment among its citizenry,” the Executive Secretary of the Southern African Development Community (SADC), Dr Stergomena Lawrence Tax, told the Forum.

“This will continue to cause conflicts and threaten peace and stability in Africa.

“Unlike the scramble for Africa of the yester-century, African citizens have become of age in terms of their knowledge of resource governance.

“They demand that African resources should be used for Africa’s development, and that can only happen if there are measures to institute accountable and transparent governance systems,” she added.

 At the root of all this “is how African national governments can develop long-term governance, rule of law, accountability and transparency”.

One participant at the Forum told the GNA that, for a powerful company such as Shell to be exposed by Global Witness was good for the continent.

“As you know, President Buhari is continuing with his war on corruption, and that’s not bad either when you consider that, in the discredited oil sector things are beginning to look up.

“This has been achieved through increased output by local oil companies, which is good for the economy”, according to the participant who declined to be named but expressed concern about the direction in which President Buhari’s anti-corruption campaign was heading.

“It would appear that his administration is targeting perceived political opponents and someone like Benedict Peters who has shown no interest in politics.

“This could inhibit the economic development the Buhari administration is aiming at,” the Tana Forum participant told the GNA.

Source: GNA