If you were presented with a picture of the rather unassuming building of Somaliland’s Parliament for the very first time, you’d be forgiven for thinking that the place was in fact the site of Prakash Patel’s Tandoori Curry Bazaar in downtown Limbe.
Yes, looks are not everything, but the building is reminiscent of a glorified third-rate Bengali restaurant in a dusty part of town than the bonafide parliament building that it actually is. It looks more like one of those places where families go to after a sweaty day in Church, for Sunday dinner – complete with Biryanis, Chicken Kormas and Lamb Vindaloos.
So, what on earth is Malawi looking for in Somaliland?
Shouldn’t we instead be cosying up to the Singapores and South Koreas of this world? The glitzy success stories whose ‘breadcrumbs’ can catapult our tiny economy into the 21st century….no?
I mean, if we are serious about implementing a tried and tested formula of economic development which other countries have been using to develop their economies for decades then surely an official trip to New Delhi or Jakarta sounds more like it?
There’s been quite a bit of speculation as to the real reasons why Malawi is interested in Somaliland, and I won’t tire you by rehearsing those reasons here.
The adminstration of Somaliland has put out what to me sounds like regurgitated diplomat-speak. A cut-and-paste statement that is too generic to be meaningful or taken seriously. The government of Malawi too hasn’t provided a convincing reason for its interest in Somaliland. In any case if the issue was truly about Somaliland seeking support from Malawi for it’s national recognition on the world stage, then surely it should have been officials from Somaliland visiting Malawi, and not the other way round. As the Chichewa proverb goes, phiri siliyendera nyani koma nyani ndi amene amayendera phiri (A mountain doesn’t follow the monkey, it’s the monkey that follows the mountain)
What’s surprised me from the commentary about the visit in Malawian publications is to see almost no one pick out the most probable reason why Eisenhower Mkaka (Malawi’s Foreign Minister) visited Hargeisa – the capital city of Somaliland, which I’m quite sure most Malawians hadn’t previously heard of before Mkaka’s visit.
I think the real reason Lazarus Chakwera’s government is looking to befriend Somaliland is to do with Oil. Yes, it’s all about Petroleum. Why this is the most likely reason is because in recent years, there’s been quite a lot of talk about investment into Somaliland. Only last year, the London headquartered Genel Energy announced it had increased his stake in the SL10B13 block in Somaliland to 100% , after acquiring a 25% state that had been previously held by East African Resources Group. That block alone is said to comprise several interests each containing at least 200 million barrels of crude oil, with some analysts estimating that there’s at least 1 Billion barrels of oil underneath that one block. That means Somaliland as a whole could have significant petroleum reserves, possibly of the size comparable to those found in several of the neighbouring countries.
Further, when friends are hard to come by as has been the experience of Somaliland (which is still regarded as an autonomous region within Somalia, and hasn’t been officially recognised by any country) any sort of trade can make a significant difference. As other marginalized states (including sanction-laden states such as Venezuela & Iran) will tell you, any takers of your output including oil in circumstances where other countries are afraid of the consequences of trading with you can be a lifesaver.
In addition, Somaliland in 2016 signed a 30 year contract with the United Arab Emirates’s DP World, the third largest port operator in the world, to manage and expand its Berbera Port. Last year, a US$400 million road project connecting Ethiopias border town of Togochale to Berbera was launched, a route which some analysts say will be an alternative transit point for imports and exports out of Ethiopia. There’s been several other significant and notable investments…
But if the oil quantities are as significant as some think, its only a matter of time before a refinery is constructed. Already in the south Ethiopia is looking at building it’s first oil refinery. This follows the shelving of a Blackstone Group LP-backed fuel pipeline project 2 years ago. Thus, given the frosty nature of diplomatic relations between Somalia and Ethiopia, it’s not inconceivable for Petroleum from Somaliland being refined in Ethiopia in the near future, before being sent back to be shipped from Berbera to destinations across the world.
Malawi needs oil at as cheap a price as can be found. Thus if you can sign contracts with ‘friends’ who are relatively new to the oil game to sell you oil at ‘friendly prices’ (as opposed to Market rates) in exchange for support regarding the friend’s sovereignty, then theoretically everyone stands to benefit. Malawi gets its relatively cheap oil at prices it can afford without having to deal with the baggage of the likes of Nigeria, Somaliland gets some Forex, and a measure of the international recognition it very much craves, there’s a boost to intra-African trade. Everyone’s a winner!
While on the face of it this move makes sense, I hope there is a balance to ensure that the scheme is not abused – leading to the loss of essential revenue, which Uganda needs.
In Malawi we had the Kayelekera Uranium mine, which was given many incentives (including a lax agreement that was too generous), but which resulted in the loss of revenue by the government. African countries cannot afford to be conducting their affairs like this, because they are the ones who are most in need of resources – to help with economic development, poverty eradication and public investment(healthcare, education and national security). Further as I often say, when was the last time an African company was given a 70% stake in a mining interest in Europe or America?
It would be better and wiser, in my view, for the Ugandan government to get into the business of oil exploration. They would be able to keep more of the money derived from the natural resource – which they would then use in developing Uganda. In any case Uganda is a small landlocked country, and when you have few resources, you must utilise them wisely.
With the oil shortages Malawi has experienced in the past( and here it must be said that the shortage was caused by donors withdrawal of budget support), if the price of crude falls below $40 a barrel, it would be prudent if the authorities in Malawi took advantage of this rare state of events to prevent future oil shortages.
Ideally a bigger more modern refinery as is being built in Zambia would measurably help the economy. But failing that, an increase in fuel reserves would do just fine.
While I’m not too sure of the legality of large millions-of-gallons sized oil reserves, I’d imagine creation of additional diesel and petrol reserves could go a long way into assisting motorists and industry with an insurance policy should we experience another donor-created fuel shortage in Malawi in the future.
For argument’s sake, let’s say additional storage reserves for the equivalent of around 9 months of fuel in each major city was created….I’m struggling to find a reason why that would be a bad thing, except that if the price fell lower, we’d have paid more for our oil.
While said reserves would be taking account of the present fuel usage only(discounting future increased fuel usage – which is not easy to predict ), even if prices fell lower than the current $60 a barrel, it would probably help Malawi in preventing an acute and sudden fuel shortage by creating a buffer in which, faced with a similar crisis as that which Malawi faced in 2012, the government would have a short breathing space to find a solution to the shortage.
Anglo American Corporation was founded in Johannesburg in 1917 with £1 million (what today would have been £75 million, adjusting for inflation according to one inflation calculator).
It has since grown into a publicly traded behemoth with a market capitalisation of £31.2 billion and revenues of £29.3 billion(2013). It’s headquarters is now in London and the company is now known as Anglo American Plc, the fourth largest mining company in the world.
Although a net ‘loss’ of $961 million was declared in 2013, Anglo American is undoubtedly one of the big boys in the industry. To give you a scale of just how big they are, Anglo American Plc owns 85% of Luxembourg registered De Beers Investments, the holding company of De Beers, another prominent mining giant which is well-known in Southern Africa. But if that’s not convincing enough then how about this: Anglo American recently walked away from a gold interest worth $300 billion, after investing over $541 million it it. Apparently, the withdrawal is related to environmental risks, in particular the threat the Pebble Mine would pose to Alaskan Salmon (there’s even a campaign), although Anglo’s chief executive claimed the withdrawal was in fact a way of prioritizing “.. capital to projects with the highest value and lowest risks.”
Both Anglo American and De Beers have been criticised over their practices in Africa, including price-fixing, low wages (for Anglo American recently in Chile here) and lack of transparency. In particular, according to a Wikipedia entry:
In 1977, the company [Anglo American] demanded that the paper it owned, Rand Daily Mail, tone down its equal-rights support after exposing the murder of South African activist Steve Biko amid the subsequent government backlash. [words in parenthesis for clarity]
Further, a British charity, War on Want, published a report in August 2007 that accused Anglo American of profiting from the abuse of people in the developing countries in which the mining giant operates. According to War on Want:
“in the Philippines and South Africa, local communities threatened with Anglo American mines have faced severe repression in their fight to stay on their land, while in Ghana and Mali, local communities see little of the huge profits being made by AngloGold Ashanti but suffer from fear and intimidation and from the damaging impact of its mines on their environment, health and livelihoods”
In response, the company subsequently published a report defending itself and disclosing its finances.
Malawi’s first president Dr Hastings Kamuzu Banda could have begun a state owned mining company in Malawi in the late 1960’s. He could have hired specialists from abroad, bought equipment from Britain or the US, begun prospecting for minerals, and by 1970 laid a foundation for a functional mining industry. The technology was available, and when Malawians had been travelling to South Africa in their thousands to work in the mines, labour would not have been a problem.
Banda didn’t begin a mining company. Instead he focussed on agriculture, which traditionally does not reap large profits as the sort which mining companies the likes of De Beers and Anglo American have been known to reap.
That decision could be a contributory factor further explaining Malawi’s economic woes today. While others were investing in assets and initiatives having huge long-term yields, Malawians were dabbling with agriculture and tobacco.
But to give him credit, while Dr Banda could have thought mining was not a priority to the newly independent country, he must have known that Malawi didn’t have enough capital resources to waste on ambitious projects whose very returns were unknown if not a gamble?
Further, having just broken away from the Federation of Rhodesia and Nyasaland, it’s understandable that while Britain could have been willing to extend Malawi a line of credit, as single-minded as Banda was known to have been, it’s inconceivable to think that he would have wanted to be constrained by such kind of favours from the very same people he so vehemently denounced. As he once declared: “We have no minerals. The soil is our gold mine”. In any case, what did a medical doctor who barely 10 years previously had been running a clinic in London know about the mining industry of the 1950’s and 60’s.
Having said this, would Dr Banda have started a state-owned mining company if he knew what treasures lay beneath the surface of Malawi’s geology? If he knew the value of such treasures on the international market?
Especially since there was information available as early as 1966 as to the Mineral deposits and mining potential of Malawi, according to a research paper titled MINERAL RESOURCES OF MALAWI AND MINING POTENTIAL by Rodney Mshali (The Society of Malawi Journal Vol. 62, No. 2 (2009), pp. 27-35 published by: Society of Malawi – Historical and Scientific ). Banda could have decided to take the risk if he wanted to.
Whichever way, it’s not my place to make a determination on Dr Banda’s judgement at this time.
But what does all this have to do with the current mining landscape in Malawi?
Well, as can be seen in the following links in Zambia, Chile, South Africa and Ethiopia , some mining companies have been known to be a menace to the countries they operate in. Issues of ownership, corruption, tax evasion in the form of profit shifting, low pay and poor working conditions, and of environmental degradation are often always lingering. In Malawi, recently, it has emerged that Paladin was considering to discharge ‘contaminated’ sludge kept in a dam near its Kayelekera mine into Malawi’s rivers systems for fear that if they did not do so, the rain season would cause their dam to overflow.
Thus, when news broke just under two weeks ago that the government of Malawi had suspended all oil and gas exploration licenses on Lake Malawi, so as to allow government to scrutinise and review each Licence that was issued or signed, I didn’t really know what to make of it. After all, Malawi has had its fair share of sorry episodes of bad contracts married with irresponsible management, with the Paladin saga at Kayelekera. Although appearing diligent, uncovering any such lax agreements will just remind us all how deep in muck the country really is. It will not be a cause for celebration.
So then, what will the government do?
If they plan to review the oil exploration licenses in all good faith, and if necessary use legal mechanisms to resolve any indications of foul play -including unfair or prejudicial contract terms that do not benefit Malawians; if they plan to bring the miscreants to justice, then the suspension is a noble move.
In addition, the government of Malawi could work with charities [such as SHERPA (France), the Center for Trade Policy and Development (Zambia), the Berne Declaration (Switzerland), l’Entraide Missionnaire (Canada) and Mining Watch (Canada) ] which in 2011 filed complaints against mining companies Glencore International AG and First Quantum Minerals Ltd, to the Swiss and Canadian National Contact Points (NCP) for violating the OECD guidelines for multinational enterprises including for Tax avoidance in Zambia.
However, if the suspension of oil and gas exploration in Malawi is a veiled attempt at ‘rent-seeking’, as is rumoured to have taken place not only during Bingu Wa Mutharika’s regime, but also during the People’s Party administration, then it would be unfortunate because the government would have lost an opportunity to harness the resources that Malawi has. DPP would have lost a chance to show transparency.
One more thing; how can Peter Mutharika be sure that the value of assets or mineral resources declared by Oil companies interested in prospecting, or already prospecting is accurate, and not under-declared/under-valued ? For example, if the actual value (or near estimate) of viable crude oil deposits under the basin of Lake Malawi was US$400 billion, what is to stop the Oil companies holding the exploration licenses from misinforming the government that they had found only US$100 billion worth of confirmed deposits under the lake? Especially when the government was unable to verify those figures?
Wouldn’t an independent state-owned Mining company, that had its own equipment, and that owned a stake in each exploration site, and that was jointly involved in the exploration, so as to be able to verify the findings by its own independently undertaken mapping and surveying reduce such a risk?
Finally, it goes without saying that for them to be successful, any state-owned organisation (including parastatals) should be run and managed by people who by merit are fit to do so, and not by public appointees with little or no experience in the relevant technical field or area.
If you thought my article the other day about why I oppose drilling for oil on lake Malawi was unbalanced or not well thought through, this article titled The IMF and the WORLD BANK: Puppets of the Neoliberal Onslaught published around September /October 2000 will qualify my point and probably set you right. I’ve had it bookmarked for a while, but forgot about it until a discussion with a friend recently reminded me of it. The discussion centered upon the news a few days ago that Christine Lagarde was questioned by a court in France, answering questions over her role in a €400million payout to an ex football boss.
Whatever you choose to believe, here is one hypothesis you must seriously consider; That a nation that does not own its natural resources is not independent at all. That instead, what exists are different levels of servants (anchito) working for a foreign master (bwana) under a semi-sovereignity.
After all the unnecessary toiling, studying, chasing one research project after another that has preoccupied my time the last two years, I have come to the sobering,inevitable and unsurprising conclusion that there is a worrying number of people who think you or someone like me doesn’t deserve much good out of this life.
A worrying number.
Some of these people think that if you are black and were born in Africa, in a country that is considered poor, in a family that does not have strong and powerful political allies, with little or no personal ‘fortune’ of your own, that your place on the socio-economic ladder is right there where fate (or an accident of evolution) created for you, exactly in the societal ‘bracket’ in which you were born. Where social / financial progression is an unattainable pie in the sky. In this place, a dead-end job is the best you can expect, and hand-me-downs or clothes sold in ASDA (or Walmart) with brands such as ‘George‘ and ‘White Stag‘ are worn. It’s a place devoid of vacations, where Sirloin steak is an unjustifiable luxury, and where a McDonald’s burger counts as a treat; where trips to the movies and broadway featured shows are unheard of, and golf – the preserve of the extremely wealthy. Lets just say it’s a place where a gym membership is not even a consideration when one’s salary can barely cover everyday expenses. In this place £7.50 spent on 400g cherries would be an obscene expense; it’s a place where a typical evening consist of dinner that costs less than $10 for a family of 5, (and does not include wine), and typical everyday entertainment is either Eastenders or some crap show on the radio, while drinking a bottle of Carlsberg.
These same people would have you believe that such a life is ‘normal’ or at least relatively normal. They bet on showing you a worse existential state to justify that while they exploit your resources (and make lucrative deals with your country’s selfish and spineless politicians), they are doing you a favour, you are in fact getting a better deal than that guy over there, in whose country a war has been raging for years, where women are unsafe and rape is commonplace, that guy’s country has virtually no education system in place, and look, armed guerilla fighters! In a country with no local currency, courts presided by warlords and a society infested with corruption….
Such scare stories are meant to somehow pacify your human (umunthu) and natural rage against what is clearly injustice against your brothers and sisters. Injustice which in other forms sees you called black monkey’s in your own country. They are the kinds of people who in Victorian times would have suggested (or mixed with people who were likely to suggest), without qualms, that a woman’s place is in the home; that women should not be allowed to work or vote. These are the kinds of people who would have owned the cotton mills (or mixed with people who owned the cotton mills) of Manchester and South Carolina, including being at the forefront of recruiting cheap child labour – for maximum profit. They are the kinds of people who would have been involved in the mistreatment of Jews throughout a large part of European history. These kinds of people would have suggested to Pontius Pilate that because Jesus was a friend of the poor and ‘rejects’ of society, that he indeed deserved the most severe punishment for calling himself the son of God.
Yet aren’t these precisely the kind of attitudes which precipitate global unrest? Is this not what deprives humanity of peaceful coexistence and harmony? I say this because beneath the conflicts in Iraq, Afghanistan, Syria, Libya, Egypt, Ukraine, or even the economic troubles facing Zimbabwe, there is a simple altercation: that of land and resource control.
In the case of Zimbabwe, please reason with me for a moment. Why on earth should a country be punished with sanctions for wanting to take back land that was forcefully and deceptively taken away from it in the first place??? Don’t get me wrong, I’m not in support of violence, but what is it that lies at the heart of the matter?
Another facet to their characteristics is that of standing. Here, a common trait of the architect is opposition to any deal in which they aren’t getting a cut. In other words, when others do something bad, and these architects are not getting any money or resources from that bad something, then the action is wrong/unforgivable/ atrocious etc. But when the architects do that very same bad thing, they can can sugar coat it and self-righteously justify it…with phrases such as ‘Oil for food‘ and ‘Regeneration’, helpfully assisted by their Bretton Woods colleagues, with selective use of the biased chastisement whip commonly known as ‘International law’.
But how does all this relate to Malawi and the oil drilling on lake Malawi I hear you ask? Well, because at the heart of Malawi’s problems is land and resource control, and the puppet masters pulling the strings are exactly the same kinds of people brewing trouble elsewhere.
So, assuming you’ve heard of the Scotland independence debate, then even though I identify with old fashioned views that divorce must be avoided wherever possible and people must discuss to resolve differences, one part of me says that maybe Scotland should become independent from the UK. Because maybe then will they be able to use their resources for their own country’s benefit. Maybe if independence occurs, some of these architects will begin to realise just how their selfish and greedy actions have been hurting other people across the world?
In Europe maybe if Crimea joins the Russian Federation it will not be exploited by the pro-western kingpins of resource control – some of whom have probably been responsible for financial trickery or misconduct elsewhere?
Similarly, let the people of Malawi resist (at all costs and in whatever manner) drilling of oil on their beautiful lake because in the end, it’s not the local people who stand to benefit from the profits of the oil drilling. As the Paladin episode at Kayelekera has shown (and as other examples on the continent continue to demonstrate), it’s only a few corrupt government officials with off-shore bank accounts in tax havens in Switzerland or the British Virgin Islands who benefit. It’s large Investment Banks that provide the capital to the architects who will get the lions share, it’s a handful of millionaire tycoons with surnames like Borshoff and Ichikowitz, who live in mansions thousands of miles away and whose surnames the locals can’t even spell or pronounce properly, they are the ones who stand to profit. It is the Greedy architects of death (whose actions spur domino type effects, causing wars, and thereby suffering and hardship to millions across the world) who stand to benefit.
It sounds like a tedious link to make, but what has been the number one cause of unrest across the world if not battles for resource control?
That is my reason for opposing drilling on lake Malawi. Because while there is a high risk of environmental degradation which could affect the lives of fishermen who depend on the lake for their livelihoods (it happened in the gulf of Mexico, and happens in the Niger Delta all the times [see another link here via Amnesty International] – how can anybody sane think it will not happen on lake Malawi?), and which could negatively affect tourism and life ecosystems in and around the lake, in the end, there will be tears and loss as very few Malawians will benefit proportionally from the oil resource. In the end it could create strife….
But I’m not saying that the transactions a poor country such as Malawi signs with foreign ‘speculators’ are all bad or useless, and do not bring some material benefit to the country or its inhabitants. No, that’s not what I’m saying. What I’m saying is that comparatively, the benefit to Malawians is too small, too insignificant, chicken feed – unsustainable. In my view, it’s no more than a trojan horse that later comes back to bite and haunt the country. Instead, the net benefit of most of these deals is significantly in favour of these architects, who come into an area, pour in their capital, make billions of dollars in profits, then move out richer than they came in – leaving behind more than just a mess. Leaving behind broken lives,in which the local man remains economically where he was prior to the ‘invasion’, or even poorer, resigned to licking his wounds, as one aggressor after another wrestle for his country’s resources.
And that is hugely problematic because no matter who Malawians elect in May 2014 elections, if the status quo of dealing with investors is maintained, where African leader treat the national purse (and national assets) as private belongings, where investors are allowed to illicitly wire billions of untaxed funds out of the continent, if economic disparities across the country are not decisively addressed (in this I mean by creating companies in which trained locals are majority shareholders and investors are minority shareholders), if the leaders of western countries continue to be hypocritical over the well-documented conduct of business leaders from their countries, poverty levels will continue to linger in Malawi and across Africa for a very long time. And come next election very little would have changed, people will be scratching their heads, and you can come back and read this article again.
My next guest is a good friend who I have known for just over 13 years now. He’s a Malawian businessman who currently is the manager of Phalombe Hardware in Limbe. Mr Ibrahim Nathanie, thank you very much for taking the time to do the 100 Voices interview.
As a Malawian, how important is Malawi’s Socio-Economic stability to you and your family?
As a Malawian, Malawi’s socio economic stability is very important. I am a fourth generation Malawian and all my immediate family has been born and bred in Malawi. We have businesses running in Malawi that have recently struggled when dollars were scarce, fuel queues were rife and inflation was high. Things have now stabilised and as a result business is slowly improving. When things are not stable it directly affects how I can provide for my family.
2. After nearly 50 years since independence, what visible progress do you think Malawi has made since independence, and in your view, what pressing challenges remain? In view of those challenges, what do you think is the role of government and the people in tackling those challenges?
Since independence there has been progress in a few areas. For example we have now more graduates in various fields than we had then, more hospitals, more hotels. However, a lot of the progress mentioned has been donor funded.
Our pressing challenge is to try to reduce our dependence on being donor funded. One way this can be made possible is to take advantage of the natural beauty and fertile land we have in Malawi. Government has to improve infrastructure and provide incentives to the tourism industry. Improve airports, improve electricity generation.
3. As someone who lived(or has lived) outside Malawi for some time, and has been exposed to modern and progressive ideas, what symbols of development in the foreign country in which you lived have had the greatest impact on you, and why?
I studied in London, and a major symbol of development that had an impact on me was the transport facilities. As a student I could catch a bus or train and travel throughout London and not be dependent on anyone.
Another thing I thought was quite impressive was theNHS (Although I know the British people don’t think it is). Although, I have never had to use the service while I was studying; coming from Malawi I found it very impressive that anyone living in the UK has access to free hospital care.
4. What lessons do you think Malawians and the Malawian leadership can learn from those ideas?
Malawi and its leaders really need to look at ways to improve our transport sector. We need to improve our rail link and our airports. We need to break the monopoly South African Airways has on the Malawian market. For example if I wanted to fly Johannesburg from Blantyre it would cost me 450,000 MWK (~£859). If I wanted to fly from Johannesburg to London it would cost me the same. Surely government should realise that they need to open up the skies so that there is competition in aviation field and that potential tourists are not priced out of coming to Malawi.
5. When you last returned to Malawi, what struck you the most as the greatest sign of improvement or development since the last time you left?
When I returned to Malawi in 2006 , the greatest sign of improvement was the opening up of banks and businesses in rural trading areas such as Mangochi, Balaka, Dedza, Ntcheu, Mulanje, etc.
“For example how can employees at the National Food Reserve Agency fail to realise that a silo had a leak. If this happened in the UK the guy who was responsible would have resigned. “
6. What struck you the most as the biggest sign of stagnation or regression?
The fact that I had to use a paper driving licence for a year as Road Traffic had run of cards to print them on. The fact that nobody in the government is being held accountable for wrongs being done. For example how can employees at the National Food Reserve Agency fail to realise that a silo had a leak. If this happened in the UK the guy who was responsible would have resigned.
7. Malawians will be going to the polls in 2014, to elect a new president. In your view what kind of leader does Malawi NEED, considering the country’s current challenges? And specifically, how should that leader approach the top job in terms of creating sustainable development and foreignreducing aid dependency?
I find the work that Joyce Banda has done in the short time she has been president is commendable. There is now forex in Malawi, no shortage of goods and no fuel queues. My only criticism of her presidency is that she has not taken any active steps to reduce our dependency on foreign aid.
I would vote for Joyce Banda but would advise her to introduce incentives for investors to come and invest in Malawi. Provide incentives for our farmers to add value to their crop before exporting their crop. For example instead of Malawi importing cigarettes we should encourage cigarette companies to come and open manufacturing plants in Malawi.
8. As you know, Tobacco is Malawi’s biggest source of export revenue. Looking at the problems that have plagued the tobacco industry in recent times, what alternatives do you think Malawi has besides Tobacco, and why are they viable alternatives?
Tourism sector really needs to be exploited, you only have to look at how Zambia and Kenya are benefitting from exposing themselves to the rest of the world. We are blessed with beauty that is unmatched in the world; we however are not blessed with people in power who can see this.
They need to build international airports at the lake, and domestic airports dotted along the lake shore. We need to attract tourists who actually spend money in Malawi not just back packers who are looking to get stoned on Malawi Gold (On a side note we could actually legalize the export of marijuana and rake in substantial forex). We need to reduce the cost of coming to Malawi. I gave an example earlier of how expensive it is for us to fly to Johannesburg.
9. Considering our troubled history with donors and funders such as the IMF and World Bank, most recently when Bingu Wa Mutharika was president, how do you see Malawi progressing from this relationship in view of the criticisms these organisations have received in the media across the world?
To be honest I feel we have already progressed from this relationship. The donors are in love with the donors.
Without a doubt we have to reduce our dependence on the donors as we all know it’s a vicious cycle. It is not in their interest for Malawi to be self-sufficient; as if we were they could not enforce their views and western cultures upon us.
10. We now know that Malawi has some precious minerals, including Uranium, possibly oil and other natural resources. How do you think the present government is doing regarding managing Malawi’s natural resources?
The people in charge in my opinion have done nothing with regards to managing our resources. This is evident in that Paladin got a great deal from the government for our uranium???
The guys in charge have to look at how Zambia is doing with it copper resources, Ghana with its oil and even other European Countries with their natural resources such as Norway to realise we have got it horribly wrong.
11. In your view, can the government do better to manage natural resources? If so, how can it do better?
“When oil was discovered in the Norwegian continental shelf in 1969, Norway was very aware of the finite nature of petroleum, and didn’t waste any time legislating policies to manage the new-found resource in a way that would give Norwegians long-term wealth, benefit their entire society and make them competitive beyond just a commodities exporter. “Norway got the basics right quite early on,” says John Calvert, a political science professor at Simon Fraser University. “They understood what this was about and they put in place public policy that they have benefited so much from.” This is in contrast to Canada’s free-market approach, he contends, where our government is discouraged from long-term public planning, in favour of allowing the market to determine the pace and scope of development. “I would argue quite strongly that the Norwegians have done a much better job of managing their [petroleum] resource,” Prof. Calvert says. While No. 15 on the World Economic Forum’s global competitiveness rankings, Norway is ranked third out of all countries on its macroeconomic environment (up from fourth last year), “driven by windfall oil revenues combined with prudent fiscal management,” according to the Forum. Before oil was discovered, the Act of 21 June 1963 was already in place for managing the Norwegian continental shelf. This legislation has since been updated several times, most recently in 1996, now considered Norway’s Petroleum Act, which includes protection for fisheries, communities and the environment. In 1972, the government founded the precursor of Statoil ASA, an integrated petroleum company. (In 2012, Statoil dividends from government shares was $2.4-billion). In the same year, the Norwegian Petroleum Directorate was also established, a government administrative body that has the objective of “creating the greatest possible values for society from the oil and gas activities by means of prudent resource management.” In 1990, the precursor of the Government Pension Fund – Global (GPFG), a sovereign wealth fund, was established for surplus oil revenues. Today the GPFG is worth more than $700-billion. While there’s no question that Norway has done well from its oil and gas, unlike many resource-based nations, Norway has invested its petro dollars in such a way as to create and sustain other industries where it is also globally competitive. The second largest export of Norway is supplies for the petroleum industry, points out Ole Anders Lindseth, the director general of the Ministry of Petroleum and Energy in Norway. “So the oil and gas activities have rendered more than just revenue for the benefit of the future generations, but has also rendered employment, workplaces and highly skilled industries,” Mr. Lindseth says. Maximizing the resource is also very important. Because the government is highly invested, (oil profits are taxed at 78 per cent, and in 2011 tax revenues were $36-billion), it is as interested as oil companies, which want to maximize their profits, in extracting the maximum amount of hydrocarbons from the reservoirs. This has inspired technological advances such as parallel drilling, Mr. Lindseth says. “The extraction rate in Norway is around 50 per cent, which is extremely high in the world average,” he adds. Norway has also managed to largely avoid so-called Dutch disease (a decline in other exports due to a strong currency) for two reasons, Mr. Lindseth says. The GPFG wealth fund is largely invested outside Norway by legislation, and the annual maximum withdrawal is 4 per cent. Through these two measures, Norway has avoided hyper-inflation, and has been able to sustain its traditional industries. In Norway, there’s no industry more traditional than fishing. “As far back as the 12th century they were already exporting stock fish to places in Europe,” explains Rashid Sumaila, director of the Fisheries Economics Research Unit at the University of British Columbia Fisheries Centre. Prof. Sumaila spent seven years studying economics in Norway and uses game theory to study fish stocks and ecosystems. Fish don’t heed international borders and his research shows how co-operative behaviour is economically beneficial. “Ninety per cent of the fish stocks that Norway depends on are shared with other countries. It’s a country that has more co-operation and collaboration with other countries than any other country I know,” Prof. Sumaila says. “That’s [partly] why they still have their cod and we’ve lost ours,” he adds, pointing out that not only are quotas and illegal fishing heavily monitored, policy in Norway is based on scientific evidence and consideration for the sustainability of the ecosystem as a whole. Prof. Sumaila cites the recent changes to Canada’s Fisheries Act, as a counter-example: “To protect the habitat, you have to show a direct link between the habitat, the fish and the economy,” he says, adding, “That’s the kind of weakening that the Norwegians don’t do.” Svein Jentoft is a professor in the faculty of Bioscience, Fisheries and Economics at the University of Tromso. He adds that Norway’s co-operative management style, particularly domestically, has been key to the continued success of the fisheries. “The management system [for fish stock] is an outcome of the positive, constructive and trustful relationship between the industry on the one hand and the government on the other hand,” Prof. Jentoft says. “They have been able to agree on issues that you and many other countries haven’t been able to, largely because the government has listened to the fishermen.” However, Prof. Jentoft isn’t on board with all of his government’s policies. He’s concerned about how the quota and licensing system is concentrating wealth and the impact that this will have on fishing communities. He predicts that Norway’s wild stocks will remain healthy in the foreseeable future and that the aquaculture industry (fish farms), where Norwegians are world leaders, will continue to grow. In 2009, Norway’s total fish and seafood export was $7.1-billion, $3.8-billion was in aquaculture. By 2011, Norwegian aquaculture exports grew to $4.9-billion. In Canada, total fish and seafood exports in 2011 were $3.6-billion, with approximately one-third from aquaculture. Norway’s forests are another important natural resource, and its pulp-and-paper industry has many parallels to Canada’s. Both nations are heavy exporters of newsprint. With much less demand since the wide adoption of the Internet and competition from modern mills from emerging markets, both nations have suffered through down-sizing and mill closures over the past decade. Both have been looking for ways to adapt. The Borregaard pulp and paper mill in Sarpsborg has become one of the world’s most advanced biorefineries. From wood, it creates four main products: specialty cellulose, lignosuphonates, vanillin and ethanol, along with 200 GWh a year of bioenergy. “You have a diversified portfolio of products,” explains Karin Oyaas, research manager at the Paper and Fibre Research Institute in Trondheim. “The Borregaard mill uses all parts of the wood and they have a variety of products, so if one of the products is priced low for a few years, then maybe some of the other products are priced high.” She feels this is a key change in direction for the industry in Norway. She doesn’t want to see the industry putting all of its eggs in one basket, as it did with newsprint. Dr. Oyaas also thinks that rebranding the industry is key to its survival and success in Norway. The forestry industry doesn’t get the same kind of attention as the oil industry, nor does it have the high-tech image. But it is just as high-tech, and it has the bonus of being a renewable resource. “You can make anything from the forest. You can make the same products that you can make from oil,” explains Dr. Oyaas.”
12. What is your answer to increasing transparency and eradicating corruption which is plaguing most governments across Africa?
Corruption is prevalent everywhere. It is just more prevalent in Africa. The reason being is that our civil servants e.g. the cops, the guy connecting your water or ESCOM metres are not paid well enough. We need to improve wages.
Consumers also need to change the way we operate. In order to get things “done” we feel we need to bribe. This enables people who do simple things like process your driver’s license or come to inspect your imported goods being offloaded not even being shy about asking for a bribe.
I reckon we need to start with these small steps and then look at the bigger bribes.
13. Any famous last words?
I manage Phalombe Hardware in Limbe – directly opposite Standard Bank in Limbe. At the moment investing in Malawi by building a house or commercial property is the way to go. We can provide all building materials from the foundation right up to the finishing stages for your house. Please visit us on face book or email us for a quote. Phalombe@africa-online.net
Global100 Voices is a collection of reflections, views, opinions, ideas and thoughts by Malawians across the world, regarding the past, present and future of Malawi