Can Namibia Avoid the Resource Curse?
A new offshore oil discovery could be a godsend—or disaster—for one of Africa’s most unequal countries.
Welcome to Foreign Policy’s Africa Brief.
Welcome to Foreign Policy’s Africa Brief.
The highlights this week: Mali’s former prime minister dies in detention, Egypt holds talks on the Iran nuclear deal, and Somaliland seeks recognition.
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Big Oil Brings Fear and Hope in Namibia
As oil and gas prices surge following sanctions against Russia, Africa may be well-positioned to become a global energy production hub. But a large majority of African countries are feeling the economic pain as net importers. This has prompted governments to begin accelerating oil and gas exploration.
One of the biggest oil and gas discoveries on the continent was made last month by TotalEnergies and Shell off the coast of Namibia. It is thought the offshore deposits could hold about 3 billion barrels of oil in total and provide an estimated $3.5 billion annually in royalties and taxes for the Namibian government.
But Namibia’s energy ambitions clash with a global export market that is increasingly opposed to fossil fuel investments. In neighboring South Africa, legal action led to a temporary blocking of seismic hydrocarbon searches while activists lobbied against an East African crude oil pipeline that will run from oil fields in Uganda to a port in Tanzania.
Community pushback. However, the most controversial development is in the northeastern Okavango Basin, where Canadian firm ReconAfrica is in conflict with local communities that say they were not adequately consulted about exploratory drilling—claiming environmental damage.
In a response, ReconAfrica said it follows international best practices. “For us, the climate crisis is already happening,” said Namibian activist Ina-Maria Shikongo of Fridays For Future Windhoek. “Our rainy seasons have shifted and so our growing seasons have become shorter.”
Africa, which contributes the least to global greenhouse gas emissions, is the continent worst affected by climate change. “We need to focus on climate adaptation and not having polluters in the mix,” Shikongo said.
Resource curse. Instability in oil-producing states like Nigeria, Angola, and Mozambique has contributed to human rights violations, theft, environmental devastation, and major security issues—a phenomenon Namibians fear.
“Everywhere, there are minerals; there are wars,” Shikongo said, particularly when communities remain impoverished. Namibians hope that their government learns from the experience of Africa’s biggest oil producer, Nigeria, and ensures the entire population benefits rather than a small elite.
One of the ways the government can do that is to require open contracting, suggests Graham Hopwood, executive director of the Institute for Public Policy Research based in Windhoek, Namibia. The country could also adopt some of the new measures introduced by South Africa, where new mining rights applicants must have a minimum of 30 percent Black Economic Empowerment (BEE) shareholders, suggests Kennedy Chege, a researcher and doctoral candidate at the University of Cape Town.
Difficult negotiations. The Namibian government is keenly aware of the challenge ahead. One of the youngest countries on the continent, it also has one of the most unequal wealth distributions in Africa—second only to neighboring South Africa using the Gini ratio as a measure of inequality. Around 70 percent of Namibia’s farmland is owned by white people; Namibia’s government only owns a 10 percent stake in projects involving the country’s natural resources.
Namibian President Hage Geingob, who sees himself as a “unifier,” has often promised in his party’s manifesto a more transparent Namibia centered on delivering opportunities for citizens.
“We have gold and diamonds. We don’t see a big difference. It still goes outside in raw form: Its value is added outside, jobs are created outside, and technology transferred,” Geingob said in an interview about the discoveries. “There must be some kind of value addition in the country. That is the only way you can say there will be more jobs created … and money will stay in the country.”
Economic blueprint. Experts are quietly confident that explorations will greatly transform the country’s economic future. “Sixty percent of the revenue will come back to Namibia through taxes and royalties,” Chege told Foreign Policy. Namibian Energy Minister Tom Alweendo has hailed the discoveries a “great period for the people of Namibia.”
Now, the country’s ruling South West Africa People’s Organisation must learn from the failures of other petrostates and draft sensible policies around the management of oil wealth and on safeguarding environmental health. “We still have hope that we could be a role model and a good example for the rest of Africa,” Hopwood said.
The Week Ahead
Monday, March 28: The United Nations Security Council holds a briefing on Sudan.
Tuesday, March 29: The U.N. Security Council holds a briefing on the U.N. mission in the Democratic Republic of the Congo.
Thursday, March 31: OPEC and non-OPEC members meet virtually.
What We’re Watching
Mali’s ex-PM dies. Mali’s former prime minister Soumeylou Boubèye Maïga, arrested last year by Mali’s ruling junta over corruption allegations, died on Monday of an undisclosed illness at a hospital. Maïga had been detained since August 2021 following a military coup in May that year.
The news came a day after former Nigerian President Goodluck Jonathan ended a two-day visit to Mali without any agreement on a date for democratic elections. As Maïga’s health deteriorated, his family reportedly unsuccessfully pushed for him to be allowed to travel abroad for medical treatment.
Niger’s president, Mohamed Bazoum, reacted in a tweet, saying his death under arrest was similar to an assassination. “I thought that such assassinations belonged to another era,” Bazoum wrote. As previously covered in Foreign Policy, Mali’s military intends to stay in power entirely undeterred by regional and Western ostracism.
Israel-Egypt-UAE talks. Egyptian President Abdel Fattah al-Sisi hosted talks with Israeli Prime Minister Naftali Bennett and Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, on Monday, in an effort to forge a coalition that could stand against Iran “and send an important message to Washington.”
According to Israeli media outlets, the three leaders held discussions over the consequences of the Ukraine war amid reports that the United States will soon return to the 2015 nuclear deal with Tehran, which Israel opposes.
Algeria-Spain tensions. Algeria recalled its ambassador to Spain in protest after Madrid shifted from a position of neutrality on the disputed territory of the Western Sahara. Spanish foreign minister José Manuel Albares backed a 2007 proposal by Morocco to offer the Western Sahara autonomy under Moroccan sovereignty.
Relations between Algeria and Morocco have broken down over the region, which Rabat claims as its own territory, governing most of the area since Spain withdrew in 1975. But Algeria hosts and supports the Polisario Front, the Sahrawi group that seeks self-determination for the region. Algiers is Spain’s largest natural gas supplier, and the decision could prove costly for Madrid at a time of unprecedented price volatility in the energy market.
Somaliland sovereignty. Somaliland’s leader, Muse Bihi Abdi, and its foreign minister, Essa Kayd Mohamoud, visited Washington last week, urging recognition of the territory’s sovereignty and separation from Somalia.
However, the Biden administration insisted the region will continue to be treated under the framework of a “single Somalia policy.” For the last 30 years, the self-declared nation has functioned as a relatively peaceful de facto state, having its own currency, military, government institutions, and regular democratic elections since 1991.
Some African leaders hard-pressed by separatist movements in their own countries are reluctant to recognize Somaliland, fearing it would embolden secessionist claims. As FP’s Robbie Gramer and Mary Yang examine, U.S. officials—while eager to engage in partnership—fear that full recognition would severely damage relations with the African Union, which does not recognize Somaliland.
This Week in Tech
Ghana’s digital tax. Ghana’s government will begin taxing nonresident online businesses beginning in April in a bid to generate approximately $227 million. Authorities hope that by taxing companies such as Facebook, the country can meet a $13 billion target in total tax revenue collection—a tax to GDP ratio of about 16.5 percent—set for this year. Google, Amazon, Netflix, and other foreign digital businesses that gain revenue from the country will have to comply, said Ammishaddai Owusu-Amoah, commissioner-general of the Ghana Revenue Authority.
The measures are part of plans for widening the tax net to help finance Ghana’s public services. A system to gather improved taxpayer information was introduced last April, popularly referred to as the Ghana Card, which links an individual’s data from SIM card registration, bank accounts, and passports.
Ghana joins a growing list of African countries, including Cameroon and Benin, looking to ensure more citizens pay taxes by going after the informal sector through mobile money transactions. Of the 13 million people in Ghana’s labor force, only about 2.3 million Ghanaians work in the formal sector and pay income tax.
It was hoped a move to introduce a 1.75 percent levy on all electronic transactions, including mobile money, would be approved by parliament in February, but it has faced heated pushback, causing a delay in rollout. Opposition parties say it will cause hardship and weaken financial inclusion in a country where more than 40 percent of adults don’t have a bank account.
Grain production fund. About 40 million farmers are to benefit from a $1 billion African Development Bank fund to boost wheat production in Africa and avert potential food shortages arising from Russia’s invasion of Ukraine. Through the fund, the bank hopes that by adopting climate-resilient technologies, African farmers can increase production of wheat, rice, maize, and soybeans, among other crops. Wheat imports account for about 90 percent of Africa’s $4 billion agricultural trade with Russia and almost half of its $4.5 billion trade with Ukraine.
Chart of the Week
More Namibians are focused on anti-pollution measures and the tightening of regulations around natural resource extraction following recent exploration projects for oil and gas.
What We’re Reading
Somalia’s election impasse. Last week, Somalia again pushed back the date for completing indirect parliamentary elections until March 31. The process is already more than a year overdue and has prompted sanctions by the U.S. State Department against Somali officials.
Writing in the Elephant, Harun Ibrahim examines the obstacles to achieving substantive progress in Somalia’s democratic transition due to inherent flaws in its power-sharing formula—by which delegates chosen by their respective clan elders vote for members of parliament—and suggests presidents and leaders of Somalia’s federal member states not have full control over the electoral commission’s actions.
Swiss offshore accounts. The former head of an Angolan bank is the latest powerful figure implicated in a massive leak of financial accounts linked to Switzerland’s private bank, Credit Suisse.
A new investigation by the Organized Crime and Corruption Reporting Project uncovers how Portuguese Angolan businessman Álvaro Sobrinho and his associates allegedly siphoned money from an Angolan government-backed credit line of around $826 million meant to build social housing in Angola. Bank documents revealed money earmarked for the project moved through Banco Espírito Santo Angola, a Portuguese-owned bank that Sobrinho led, but was never sent on.
Nosmot Gbadamosi is a multimedia journalist and the writer of Foreign Policy’s weekly Africa Brief. She has reported on human rights, the environment, and sustainable development from across the African continent. Twitter: @nosmotg
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