Connect with us

Africa

Oil: A blessing or a curse for Somalia?

Published

on

Somalia recently reached a landmark agreement with Shell and Exxon Mobil to develop the vast petroleum reserves believed to lie off the troubled country’s coast. The deal rekindles a previous joint venture with the two oil giants that was cut short in 1990 when the ousting of Somali dictator Mohamed Siad Barre threw the country into a prolonged period of instability—and rekindles debates over whether oil will present greater opportunities or risks to Mogadishu.

Somalia’s new petroleum law, passed by the federal parliament earlier this year, has paved the way for this renewed exploration of the country’s extensive natural resources—estimated at as much as 100 billion barrels. The government hopes that drawing on these riches will help kickstart economic regeneration as the country’s security situation slowly but steadily improves after decades of conflict, terrorism and piracy.

Talks are now being held to enable the agreed concessions to be converted into revenue sharing agreements (RSAs) that will return 55 percent of offshore oil revenues to Somalia’s central government, with the remainder being channelled to member states. A new licensing round, covering another 15 offshore blocks, has begun, with concessions expected to be awarded early next year.

Rebuilding a damaged economy or fuelling rifts?

Concerns are nevertheless rising that the possible influx of petroleum resources may exacerbate existing rifts between Somali states. The adjacent states of Somaliland and Puntland have disputed the ownership of the oil-rich Sool and Sanaag regions for decades; if an exploration licence were granted to a foreign company, the situation could easily descend into war.

Meanwhile, the prospect of oil revenues has also added fuel to the fire of a long-running maritime border row between Somalia and Kenya. In February this year, Nairobi accused Mogadishu of an ‘illegal land grab’ after Somalia attempted to auction off oil and gas blocks from disputed territory on the border between the two countries – a flashpoint which resulted in the recall of the Kenyan ambassador and the tit-for-tat expulsion of the Somali diplomat in Nairobi. The Somali government responded by withdrawing the disputed blocks from sale, pending a judgement by the ICJ.

Learning from experience: Senegal and Equatorial Guinea

As Somalia wrestles with the question of how to benefit from its oil reserves while eschewing further strife, it has examples – both good and bad – among fellow African nations who’ve uncovered fossil fuel deposits.

Senegal, not historically an oil-producing nation, has been the site of a number of promising discoveries recently. Industry analysts have suggested that the Senegal Basin could be the “next offshore boom”—particularly likely following the announcement earlier this month that new, high-quality gas reserves have been discovered at the Greater Tortue Ahmeyim site straddling the Senegalese-Mauritanian border.

Senegal has already faced some of the troubles which inevitably accompany rich petroleum finds. The African Energy Chamber has suggested that recent allegations that the Senegalese president’s brother improperly benefitted from the awarding of oil and gas contracts in fact stemmed from an attempt to taint the reputation of both President Macky Sall and the Senegalese fossil fuel industry in general.

Senegal’s oil hopes have not been derailed, however, and Dakar is making a concerted effort to reap the maximum benefit from its oil reserves. The country’s new petroleum code, voted into law earlier this year, has brought Senegal’s legal framework for natural resources in line with industry norms, increased transparency and upped the state’s share of oil revenues.

If Dakar is so far managing to avoid the notorious “resource curse”, other African countries flush with oil have not found the fuel to be such a boon. Equatorial Guinea is practically a textbook example of a country squandering its oil reserves without returning tangible benefits to its citizens. In fact, while Equatorial Guinea’s per-capita wealth is the highest of any country in sub-Saharan Africa, government spending in areas like health and education are way below average.

That’s not to say some haven’t benefited from the oil millions: President Obiang—who has ruled the country with an iron fist since he had his uncle shot and killed in 1979— has managed to shore up the family coffers nicely, collecting race cars and mansions in Europe and America. Obiang once questioned “what right does the opposition have to criticize the actions of a government?” and spent his early years overseeing Black Beach, the most notorious prison in Africa.

Since Equatorial Guinea discovered oil, however, the despot has been more or less accepted by the international community. The once-shuttered U.S. Embassy in Malabo was reopened and former Secretary of State Condoleezza Rice referred to Obiang as “an old friend”.

Somalia needs to tread carefully

The cases of Senegal and Equatorial Guinea, among others, offer Somalia guidance as it attempts to use its oil to further its progress towards peace and reconciliation. The involvement of US troops has helped to push back the terrorist group al-Shabab, while the International Monetary Fund (IMF) has indicated that Somalia could qualify for debt relief as early as next spring – which would enable the government to plan public spending programmes and invest in job-creation schemes. However, regulators have cautioned that more needs to be done in the interim to tackle poverty and build a more resilient economy.

Against this backdrop, an oil boom could help Somalia rise to the challenges it faces. But it’s also possible that the influx of wealth could serve to fuel already-serious corruption. In the 2018 Corruption Perceptions Index (CPI), Somalia received the highest score out of all 180 countries ranked, making it the most corrupt in the world. Tapping into oil revenues could help lift Somalis out of endemic poverty—almost three-quarters of its population survive on less than two dollars a day— but the vast cash flow this would release may also cause political corruption to thrive, as Equatorial Guinea has shown. Carefully managing any oil finds, as Senegal is trying to do, will be essential for Somalia to maintain recent progress.

Continue Reading
Comments

Africa

The Transitioning Democracy of Sudan

Published

on

Sudan has been the focus of conflict for much of its six decades as an independent nation. Despite being an anomaly in a region crippled with totalitarian populism and escalating violence, the country hasn’t witnessed much economic or political stability in years. While the civic-military coalition, leading a democratic transition towards elections, has managed to subside the fragments of civil war, growing hostility in the peripheries has begun threatening the modest reforms made in the past two years. The recent coup attempt is a befitting example of the plans that are budding within the echelons of the Sudanese military to drag the country back into the closet. And while the attempt got thwarted, it is not a success to boast. But it is a warning that the transition would not be as smooth a ride as one might have hoped.

The problems today are only a reflection of Sudan’s issues in the past: especially which led to the revolution. The civil unrest began in Sudan back in December 2018. Sudan’s long-serving ruler, Omer al-Bashir, had turned Sudan into an international outcast during his 30-year rule of tyranny and economic isolation. Naturally, Sudan perished as an economic pariah: especially after the independence of South Sudan. With the loss of oil revenues and almost 95% of its exports, Sudan inched on the brink of collapse. In response, Bashir’s regime resorted to impose draconian austerity measures instead of reforming the economy and inviting investment. The cuts in domestic subsidies over fuel and food items led to steep price hikes: eventually sparking protests across the east and spreading like wildfire to the capital, Khartoum.

In April 2019, after months of persistent protests, the army ousted Bashir’s government; established a council of generals, also known as the ‘Transitional Military Council.’ The power-sharing agreement between the civilian and military forces established an interim government for a period of 39 months. Subsequently, the pro-democracy movement nominated Mr. Abdalla Hamdok as the Prime Minister: responsible for orchestrating the general elections at the end of the transitional period. The agreement coalesced the civilian and military powers to expunge rebellious factions from society and establish a stable economy for the successive government. However, the aspirations overlooked ground realities.

Sudan currently stands in the third year of the transitional arrangement that hailed as a victory. However, the regime is now most vulnerable when the defiance is stronger than ever. Despite achieving respite through peace agreements with the rebels in Sudan, the proliferation of arms and artillery never abated. In reality, the armed attacks have spiraled over the past two years after a brief hiatus achieved by the peace accords. The conflict stems from the share of resources between different societal fractions around Darfur, Kordofan, and the Blue Nile. According to UN estimates, the surging violence has displaced more than 410,000 people across Sub-Saharan Africa in 2021. The expulsion is six times the rate of displacement recorded last year. According to the retreating UN peacekeeping mission, the authorities have all but failed to calm the rampant banditry and violence: partially manifested by the coup attempt that managed to breach the government’s order.

The regional instability is only half the story. Since the displacement of Bashir’s regime, Sudan has rarely witnessed stability, let alone surplus dividends to celebrate. Despite thawing relations with Israel and joining the IMF program, Sudan has felt little relief in return. The sharp price hikes and gripping unemployment which triggered the coup back in 2019 never receded: galloped instead. Currently, inflation runs rampant above 400%, while the Sudanese Pound has massively devalued under conditions dictated by the IMF. And despite bagging some success in negotiating International debt relief, the Hamdok regime has struggled to invite foreign investment and create jobs: majorly due to endemic conflicts that still run skin-deep in the fabric of the Sudanese society.

While the coup attempt failed, it is still not a sigh of relief for the fragile government. The deep-rooted analysis of the coup attempt reveals a stark reality: the military factions – at least some – are no longer sated in being equal-footed with a civilian regime. Moreover, the perpetrators tried to leverage the widening disquiet within the country by blocking roads and attempting to sabotage state-run media: hoping to gain public support. The population is indeed frustrated by the economic desperation; the failure of the coup attempt means that people have still not given up hope in a democratic government and a free-and-fair election. Nonetheless, it is not the first tranche of the army to rebel, and it certainly won’t be the last. The only way to salvage democracy is to stabilize Sudan’s economy and resolve inter-communal violence before leading the county towards elections. Otherwise, it is apparent that Bashir’s political apparatus is so deeply entrenched in Sudan’s ruling network that even if the transitional government survives multiple coups, an elected government would ultimately wither.

Continue Reading

Africa

Money seized from Equatorial Guinea VP Goes into Vaccine

Published

on

As a classic precedence, the Justice Department of the United States has decided that $26.6m (£20m) seized from Equatorial Guinea’s Vice-President Teodorin Nguema Obiang Mangue be used on purchasing COVID-19 vaccines and other essential medical programmes in Equitorial Guinea, located on the west coast of central Africa.

“Wherever possible, kleptocrats will not be allowed to retain the benefits of corruption,” an official said in a statement, and reported by British Broadcasting Corporation.

Obiang was forced to sell a mansion in Malibu, California, a Ferrari and various Michael Jackson memorabilia as part of a settlement he reached with the US authorities in 2014 after being accused of corruption and money-laundering. He denied the charges.

The agreement stated that $10.3m of the money from the sale would be forfeited to the US and the rest would be distributed to a charity or other organisation for the benefit of the people of Equatorial Guinea, the Justice Department said.

The UN is to receive $19.25m to purchase and administer COVID-19 vaccines to at least 600,000 people in Equatorial Guinea, while a US-based charity is to get $6.35m for other medical programmes in Equatorial Guinea.

Teodorin Nguema has been working in position as Vice-President since 2012, before that he held numerous government positions, including Minister of Agriculture and Forestry. Known for his unquestionable lavish lifestyle, he has been the subject of a number of international criminal charges and sanctions for alleged embezzlement and corruption. He has a fleet of branded cars and a number of houses, and two houses alone in South Africa,

Teodorin Nguema has often drawn criticisms in the international media for lavish spending, while majority of the estimated 1.5 million population wallows in abject poverty. Subsistence farming predominates, with shabby infrastructure in the country. Equatorial Guinea consists of two parts, an insular and a mainland region. Equatorial Guinea is the third-largest oil producer in sub-Saharan Africa.

Continue Reading

Africa

African Union’s Inaction on Ethiopia Deplorable – Open Letter

Published

on

The crisis in northern Ethiopia has resulted in millions of people in need of emergency assistance and protection. © UNICEF/Christine Nesbitt

A group of African intellectuals says in an open letter that it is appalled and dismayed by the steadily deteriorating situation in Ethiopia. The letter, signed by 58 people, says the African Union’s lack of effective engagement in the crisis is deplorable. The letter calls on regional bloc IGAD and the AU to “proactively take up their mandates with respect to providing mediation for the protagonists to this conflict”.

The letter also asks for “all possible political support” for the AU’s Special Envoy for the Horn of Africa, Olusegun Obasanjo, whose appointment was announced on August 26, 2021. A United Nations Security Council meeting on the same day welcomed the former Nigerian president’s appointment.

Earlier in August 2021, UN  chief Antonio Guterres appealed for a ceasefire, unrestricted aid access and an Ethiopian-led political dialogue. He told the council these steps were essential to preserve Ethiopia’s unity and the stability of the region and to ease the humanitarian crisis. He said that he had been in close contact with Ethiopian Prime Minister Abiy Ahmed and had received a letter from the leader of the Tigray region in response to his appeal. “The UN is ready to work together with the African Union and other key partners to support such a dialogue,” he said.

August 26, 2021 was only the second time during the conflict that the council held a public meeting to discuss the situation. Britain, Estonia, France, Ireland, Norway and the United States requested the session.

Fighting between the national government and the Tigray People’s Liberation Front broke out in November 2020, leaving millions facing emergency or crisis levels of food insecurity, according to the United Nations. Both sides have been accused of atrocities.

Continue Reading

Publications

Latest

Americas3 hours ago

Is the US mainstream media the spying arm of the Biden Administration?

The US mainstream media is biased. We’ve all heard this before. There is a reason why so many have turned...

jakarta indonesia jakarta indonesia
Southeast Asia6 hours ago

Impunity for desertion of the Constitution

A collection of scratches depicting the nuances of “totalitarianism” (repressive actions of state stakeholders tend to be authoritarian) and “radicalism”...

Tech News11 hours ago

Lighthouses boost sustainability with Fourth Industrial Revolution transformation

The World Economic Forum announces today the addition of 21 new sites to its Global Lighthouse Network, a community of...

Joe Biden Joe Biden
Southeast Asia13 hours ago

The Race of Supremacy in the Indo-Pacific Region

Amid the growing US-China rivalry for the supremacy, the geopolitics has been altered to gain favour for oneself and outsmart...

Reports14 hours ago

Study of Diversity Shows Scale of Opportunity in Media and Entertainment Industries

The World Economic Forum’s Power of Media Initiative has compiled a first-of-its-kind compilation of the state of diversity and representation...

South Asia18 hours ago

Afghanistan and the Quest for Democracy Promotion: Symptoms of Post-Cold War Malaise

The U.S. withdrawal from Afghanistan should be the first step in a reduced American overseas force posture. Democracy promotion in...

Middle East20 hours ago

UAE-Israel relations risk being built on questionable assumptions

A year of diplomatic relations between the United Arab Emirates and Israel has proven to be mutually beneficial. The question...

Trending