Oil is black gold, and its recent discovery in potentially commercial quantities in Namibia is a mixed blessing. QatarEnergy discovered light oil in their Jonker-1X deepwater well located 270 km off Namibia’s shores.
We write this editorial knowing that years will pass before champagne corks are popped, and Namibia begins to rival the barrels of daily crude oil production of Nigeria, Angola, or Gabon. Nevertheless, the discussion about Namibia as an oil producer must start in earnest. Understandably, there must be a joyous gleam in the eye of those struggling to manage the debt-laden national budget while waiting for more tangible results on the recently announced oil discoveries. That gleam must be put in check as the reality of the downside of having black gold is realistically debated. The demons of corruption, elitism, profit mismanagement, threats to the environment, and social unrest due to widespread ignorance and unwarranted elevated expectations could make the promise of black gold into a curse of fool’s gold.
President Hage Geingob correctly commented that the oil discovered would belong to those who find it. Any oil found in Namibia will belong to the companies that are spending hundreds of millions to find, pump, refine, and bring it to the global markets. Government must continue to repeat this truth in speeches and comments about Namibian oil.
If the oil discovery pans out over the next few years, we must remember that Namibians are good complainers. We will be the first to shout about how we are not benefitting from oil pumped from our land. There will be complaints about foreigners holding high-paying jobs in the Namibian oil industry. Populist politicians searching for votes will shout and dance with nationalistic indignation about why Namibians cannot own, run, and control their own oil. They will make these noises, ignorant of the billions that foreigners would have invested into this capital-intensive industry. They will need to understand that there may be unfavorable existing contracts signed by the Namibian government that is bringing little exploration or R&D money to the table.
Most other African oil-producing countries failed to be transparent with their people when their oil industries first took root. They failed to outline how the profits would be used, and they failed to set aside funds for the inevitable environmental disasters that come with oil pumping operations. Let us not forget about Ken Saro-Wiwa. For decades, there have been horrendous reports from the Niger Delta about people breaking open pipelines to fill containers with crude oil, thinking they could put it directly in their petrol-empty vehicles and instead poisoned and burned themselves. Pipelines and oil infrastructure have caused massive environmental destruction to grazing areas, farms, and traditional lands. The current Namibian discovery is offshore, where our fishing and tourism industries earn billions and employ tens of thousands. One oil leak in offshore Namibia can cost billions and jeopardize the health of many people and wildlife. Are we ready for what having black gold means?
Several African countries drive their Lexus limos on the black gold highway. However, do their people have a higher quality of life as a result? Nigeria, Libya, Angola, Algeria, Egypt, the Republic of Congo, Gabon, Ghana, Chad, Sudan, Cameroon, Equatorial Guinea, Tunisia, Cote d’Ivoire, DRC, and Niger are African countries with significant oil exports. And yet, the list of the top 30 poorest (income of less than US$1 a day) African countries includes five of the large oil-producing African countries noted above. We all know about the GINI coefficient that determines the inequality of income distribution in a country. Embarrassingly, Namibia is number two on that list in Africa because our rich get richer, and our poor stay the same. The top oil-producing countries are all on that list in the top 30 countries with the most inequitable income distribution. The revenue from their oil is not earmarked for the social beneficiation of their local people. Instead, it fuels the elite lifestyles of the rich and powerf
ul. Let us not forget that our friend during the independence struggle, the late Angolan President Dos Santos passed on as one of the wealthiest men in the world, worth US$20 billion (According to Forbes), mainly due to the oil revenues of his country. And yet, we all know of the extreme poverty, poor infrastructure, and non-existent social services available to most of the Angolan people. Black gold, not shared equally, glitters for some, and causes suffering for others.
If significant oil revenues ever become a reality in Namibia, the SWAPO government should be true to its old revolutionary principles and dedicate all oil profits to hospitals and housing. No SOE with CEOs and CFOs making three and four million per year should be allowed. Namibian private sector investors should be encouraged to put up as much money as possible and receive benefits commensurate with their financial stake. But no fisheries industry-style quotas or boards full of deadweight people who add no benefit should leech onto Namibia’s budding oil industry.
Government must consider making social development demands on its oil partners. Our promising youth who have the inclination to build their careers in the worldwide oil industry should be sent for schooling at the cost of our oil partners. They should be supported as they take on their first skilled jobs in other countries’ oil industries. Namibian diplomats must work hard to generate oil workforce scholarships and subsidized training programs abroad. If we do this sooner rather than later, as the decades pass, there will be trained Namibians to compete with the foreigners for skilled oil jobs.
Oil discoveries in Namibia could be good news. However, if those revenues are not transparent, profit access is limited to cliques, environmental disasters are not mitigated, and there is no well-defined allocation for social beneficiation, the oil will be poison. Civil unrest will come with each pump of the oil derrick as social hostilities boil over.
Namibia can do better than other developing nations that live with the double-edged sword of oil revenues that pollute their land and corrupt their selfish elites. Black gold in the Land of the Brave can glitter for the country’s future if Namibia uses the oil to put its pro-poor policies at the front and the pockets of the elite at the back.