Minerals In Africa: A Curse Or An Excuse For Plunder

A report published in 2012 by the UK Royal Society warned of the strain population explosion is exerting on world resources. Said the president of the society, Sir Paul Nurse, in the report titled People and the Planet’; “Rapid and widespread changes in the world’s human population, coupled with unprecedented levels of consumption present profound challenges to human health and wellbeing, and the natural environment.”

But is the warning coming too late for some African countries that have found themselves falling for the cheap pleasantries that resource-starved economies are dangling in exchange for the continent’s natural resources? From north to south, east to west, foreign multinational and foreign owned corporations have been scrambling for Africa’s resources.

As a result of bad political leadership that is mainly interested in short-term gains, Africa’s resources are being used for individual enrichment and preservation of political elitism. Such greed is having grievous impact on governance, democracy, human rights, peace and stability on the continent.

The linkages between good environmental management, human rights, peace and stability are well documented by various studies. It must hence be of great concern when such vital heritage sites like Lamu (Kenya), Virunga National Park (DRC), the San people’s land (Botswana), and Karoo (South Africa) are being indiscriminately traded-off for the benefit of extractive industry players.    

The UK Royal Society’s report highlighted nine key recommendations - seven of which could be linked directly or indirectly to the scramble for the continent’s natural resources - that have to be addressed if the world as we know it today is to survive:

  • The international community must bring the 1.3 billion people living on less than $1.25 per day out of absolute poverty, and reduce the inequality that persists in the world today.
  • The most developed and the emerging economies must stabilise and then reduce material consumption levels through: dramatic improvements in resource use efficiency, including reducing waste; investment in sustainable resources, technologies and infrastructures; and systematically decoupling economic activity from environmental impact.
  • Population and the environment should not be considered as two separate issues.
  • Governments should realise the potential of urbanisation to reduce material consumption and environmental impact through efficiency measures.
  • Natural and social scientists need to increase their research efforts on the interactions between consumption, demographic change and environmental impact.
  • National governments should accelerate the development of comprehensive wealth measures.
  • Collaboration between national governments is needed to develop socio-economic systems and institutions that are not dependent on continued material consumption growth.

The demand and competition for lucrative contracts by investors often lead to bribery and grand corruption, which enrich political leaders and make them think they are indispensable – that they can survive without accountability. Consequently, it becomes imperative for corrupt regimes and corporations to safeguard their interests. If not addressed with utmost urgency cases of politicians clinging to power at all costs, and with the help of the foreign companies and governments, shall be the norm.

The fight for power has been evident in Zambia and Zimbabwe in recent past. In the run up to 2011’s general elections in Zambia, investors (including the Chinese government) in the copper belt got jittery that a new administration would revoke controversially signed copper mining concessions.

Various organisations including the World Bank and the British Department for International Development had faulted some of the contracts that former president Rupiah Banda’s administration had signed with mining companies. The investors’ jitters were vindicated in June 2012 when the late president Michael Sata announced his intention to review contracts. Addressing the business community during the Commonwealth Economic Conference in London, president Sata was quoted saying: “We are not getting enough from our mineral resources,” in reference to the country’s copper, whose deposits had placed the southern African country among the top copper producers in the world.

The discovery of alluvial diamonds in Zimbabwe’s Chiadzwa fields is yet to benefit citizens. During his tenure as the Finance minister, Tendai Biti, spoke out about rampant looting in the mining sector, saying the missing revenues would help greatly to restore his country’s ailing economy. EITI audits could not yield much positive change considering the heavy weight investors operating in the sector. For instance, the London listed Old Mutual Plc provided an investment vehicle to anonymous investors in Zimbabwe’s mining industry.

Addressing a funds’ managers conference in Cape Town in 2011, Zimbabwean exiled politician, Roy Bennett castigated the involvement of Old Mutual in the controversial mines, while describing it as “unacceptable example of corporate greed and wilful negligence.”

Botswana and Angola, despite the numerous challenges, were clear examples of ‘the good’ that can be noted of the industry. After rising from the ashes of a devastating civil war, Angola made revenue collected from its oil and diamonds count, though just briefly before surrendering concessions to Chinese state entities.

Angola’s government demanded that potential investors in extractive industries provide 100% funding for any venture for a mere 40% stake in the operation. In Botswana, the government owns 50% of diamond mining giant, Debswana Diamond Mining Company Limited, and has ensured that citizens benefit. These success stories would be naught without political good will. Leadership that acknowledges that it’s merely a custodian of the nation’s assets is what is required to strengthen such efforts as the EITI’s.

But as the world citizens were celebrating the gains of Gaborone, greed seems to be catching up. In 2014, the government finally succeeded in relocating the San people from their ancestral homeland in favour of a British registered Gem Diamonds Ltd, a company founded by Clifford Elphick who enjoys luxurious living in the millionaires ridges of Plettenberg Bay of the Southern Cape.

The belief that political leadership can survive without citizens’ taxes or financial support from donors, is fast eroding the democratic needs in Africa:

CHAD is a visible example of such disregard to citizens and demands for good governance. With huge financial gains being offered by multinationals like ExxonMobil and the China National Petroleum Corporation in exchange for petroleum, General Idriss Déby Itno’s administration presently enjoys a superficial facelift as well as solid protection at the UN Security Council (thanks to China’s seat at the Council). With funds and high-level protection, the general can afford to buy arms to squash dissidents.

Democratic Republic of Congo: The confirmation of oil prospects in Virunga National Park has placed this UNESCO listed World Heritage site under strain of environmental degradation. The immediate gains from exploration seem to supersede resultant damages. To share the spoils, French oil giant, Total, acquired 66.66% of South Africa’s Sacoil’s interests in DRC. Before the acquisition, Sacoil Holdings held an exploration permit. Also involved in the exploration at the National Park, is Britain’s Soco International.

The situation was worsened when a few politicians such as Modeste Lukwebo of Alliance des forces démocratiques du Congo (AFDC) who had been vocal in demanding accountability in the extractive industries, were mysteriously voted out of parliament in past general elections. As a result, discrepancies that EITI’s audit for the year 2008/9 unearthed remained shelved.

Kenya/South Sudan: The discovery of oil deposits in north-western Kenya opened discourse on the path the country would follow, considering the ‘resources curse’ phenomenon in many oil-rich nations. Was it a coincidence that the announcement of the discovery came barely three weeks after the then leaders; Mwai Kibaki (Kenya), Salva Kiir (South Sudan) and Meles Zenawi (Ethiopia), signed a multi-billion dollar contract for the Lamu Port Sudan Ethiopia Transport Corridor (Lapsset) that included an oil refinery in Lamu, oil pipeline, railway and motorway linking the proposed port with the other two countries?

When closely examined, suspicions arise that the political leadership all along knew about the prospects and discovery of oil in Turkana, located near the border with South Sudan and Ethiopia, but held off the announcement until the contract for Lapsset was signed. The confirmation that certain politically well-placed individuals had acquired interests in certain blocks on the Turkana exploration fields also added fuel to the suspicions.

When negotiating contracts involving extractive industries, everyone wants a share. This was further evident in the Lapsset deal when Japanese Toyota Tsusho Corporation landed a contract for the construction of the oil pipeline. Toyota Tsusho Corporation is a trading member of the Toyota Group, whose only link to the petroleum industry is that of a consumer. So how did a company with no expertise in building oil pipelines win such a contract? What are they getting in return? If Kenya was a compliant member of EITI, these questions would have been expected from the auditors, but as things stand, political leadership simply decided for the citizens what they thought was best.

South Africa: Three oil companies, Royal Dutch Shell, Falcon Oil & Gas, and Bundu Oil & Gas have been eyeing the exploration of natural gas trapped in the underground shale formations in the Karoo in a contentious process called Hydraulic Fracking. This happened despite the environmental, health and scientific concerns being raised by environmentalists and citizens. The awarded share to host part of the giant Square Kilometre Array (SKA) radio telescope in the area hasn’t derailed the quest. In fact the prospect of the natural gas appears to have just been slowed down by the current drop in oil price.