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Governance, gender and no guarantees in Africa’s oil-rich states

Nigerian soldiers of the Joint Task Force look on during the destruction of an illegal oil refinery in Oteghele Forest, Warri South-West Local Government Area of the Niger Delta, Southern Nigeria, June 17, 2015. According to Nigerian authorities, approximately 150,000 barrels of oil are stolen per day directly from the thousands of kilometres of pipelines across the oil rich delta states. Nigeria is the largest crude oil producer in Africa. (EPA/STR)
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The discovery of oil in Chad in 1969 did not yield many immediate benefits for a population that would soon be wracked by civil war, but hopes were high by the late 1990s. Chad had largely stabilized, and a new, World Bank-backed project to build a pipeline through Cameroon to the Atlantic Ocean coast was touted as a model for socially and environmentally responsible oil exploitation in developing countries. Oil began flowing through the Chad-Cameroon Pipeline in 2003, but 12 years later, it is clear that the plan was largely a failure. Far from using oil revenues to benefit civilians by building and maintaining better public services, corruption and mismanagement plagued the project, leaving already-wealthy public officials as the biggest beneficiaries of a very expensive international development plan. Chad, meanwhile, seems to be just another case study in a long list of the resource-cursed weak countries in which leaders rely on natural-resource revenues to stay in power, thus avoiding creating the kinds of democratic, accountable institutions needed to strengthen the state and stop corruption.

Are Chad and other oil-rich African states like Nigeria or Equatorial Guinea really “resource-cursed?”  Are democratic political institutions doomed if oil is discovered in a weak state? Will women ever play an equal role in Africa’s oil industries? Freelance journalist Celeste Hicks explores Chad’s oil exploitation efforts and the broader phenomenon of post-Cold War oil exploration in Africa in her new book, “Africa’s New Oil: Power, Pipelines, and Future Fortunes.” We chat about what she learned in the following Q&A:

LS: Chad is considered by many Western policymakers to be a bit of a backwater; it’s difficult to access and, outside of its oil, doesn’t have many natural resources. What got you interested in Chad and the oil question there? Are international policymakers right to pay little attention to the country? 

CH: My fascination with Chad began when I was sent there as BBC correspondent in 2008, just a few months after a very serious rebel attack which had come within hours of unseating the president. It was beyond eye-opening to see how a place like Chad – one of the world’s poorest countries – was run during a time of crisis. Slowly I began to realize that almost everything that happens in Chad is influenced by the exploitation of the country’s significant oil deposits.

I think without a doubt that policymakers are wrong to pay so little attention to Chad. Each time there is a new crisis in West or Central Africa, be it Mali, CAR, Libya or Boko Haram, I receive a deluge of e-mails from researchers and journalists and desperate to understand what’s happening there. And then things go quiet again and those people move on to other jobs. Being able to see how that Chadian narrative has played out over the last eight years, and to make relatively reliable predictions, has been one of my most satisfying professional achievements.

LS: You are very clear that “Africa’s New Oil” is not an academic work, but your analysis is grounded in existing academic research, especially the resource-curse literature. What do the cases of Chad and other African states tell us about academic research on the resource curse? Do you find that it generally supports what scholars like Ross have argued about oil-rich countries in other parts of the world? 

CH: Michael L. Ross and others have done a lot of work to bring the “resource curse” theory up to date from its early expositions in the 1980s, arguing that the problem is not so much about environmental and social destruction and negative economic growth à la Nigeria, rather it is more about “missed opportunity.” For example, why are countries which have such huge natural endowments not growing as fast as we would expect? I agree with much of this analysis, as certainly Chad’s development appears to be a missed opportunity. It is hard to make a direct link between oil and conflict, but with the number of people considered to be “poor” having actually increased since 2003, it is clear that Chad could have achieved much more in improving its development indicators. However I believe that the problem is also one of a so-called “governance curse” – that there is nothing inherently wrong with oil, it is more about how it is managed (as the “successful” exploitation of oil in places such as the UK and Norway demonstrates).

LS: The combination of weak states run by autocratic leaders with oil wealth seems like a recipe for disaster in terms of environmental protection. What did you learn about efforts to protect African environmental resources, especially water, land and other resources necessary for human survival? 

CH: Contrary to what might be expected, Chad’s oil project is actually pretty clean. At the Esso production site in Kome there is nothing like the environmental catastrophe and social exclusion seen in the Niger Delta. For industrial accidents and environmental spills Chad’s project scores better than the industry average in the U.S.! Much of this can be attributed to the Chad-Cameroon Development Project, when the World Bank agreed to support production on the condition that strict environmental rules (as well as measures to promote revenue and spending transparency) were followed. The oil companies operating in southern Chad including Exxon Mobil have actually taken these rules quite seriously, although there are big questions about who will be the guarantor of commitments made to restore the land to its original state once the oil-fields are exhausted.

The environment has become a huge battlefield between the Chadian authorities and the Chinese state-owned China National Petroleum Corporation (CNPC). In 2013 the government fined the company £1.2 billion [about $1.9 billion] and revoked a number of exploration licenses for environmental transgressions. Although there are suspicions that Chad has used the environmental card to exact better contractual terms from the Chinese, the Chadian government has secured stringent commitments from the CNPC to clear up any future spills and damage.

LS: Chapter 5 deals with a relatively strong and stable African state, Ghana. What lessons can we learn from the Ghana case that may apply in other emerging oil producing African states? Is a strong, existing civil society like Ghana already had before oil was discovered necessary if a country is to avoid the oil curse? 

CH: At the time of my research trip (January 2014), Ghana was being promoted as an example of how things could be done “correctly.” Civil society and media are strong and impressive in Ghana. Legislation to ensure transparency over oil revenues and spending was in place, and Tullow Oil had been persuaded to create opportunities for local employment and investment. Although much of that analysis still stands, some of those achievements have been undermined by the broader economic malaise the country has experienced in recent years. Proposals to cap the oil stabilization fund, effectively allowing the government to use oil money to pay off its unsustainable debt, show that there is still some way to go. The lesson from Ghana is that good laws alone are not enough — there needs to be serious political will to stick to the law when times are tough. This goes back to my earlier point about the “governance curse.”

LS: In chapter 6, there’s a brief but fascinating discussion of gender in relation to oil exploration in Africa. Given that the global oil industry is very male-dominated, is there hope for women to play a larger role — and to benefit from — oil production on the African continent?

CH: Although from my point of view as the author it never crossed my mind that oil might be considered as a “man’s” subject, I soon realized that particularly in West Africa, I was often spending whole days only speaking to men. I was really cheered by the experience of East Africa where I saw that the subject of gender relations was on the radar, and particularly by the considerable number of influential women leading the debate. I saw many positive developments when it came to discussing community and family rights in cases of compulsory land acquisition and compensation, which is really important because it recognizes women’s vital role in safeguarding livelihoods. However I don’t think that I can say there is going to be a revolution in the oil industry itself – long-standing questions of why women tend to be put off studying subjects like engineering, chemistry and physics have not been resolved, and it was clear that certain aspects of the industry, such as having to live on month-on month-off rotations on self-contained oil rigs in the middle of the sea, were just not conducive to a good work/life balance.

LS: You conclude the book by arguing that stronger governing institutions are the solution to avoiding the oil curse in Africa, an assessment with which I think most policy makers and academics who study these issues agree. However, as you also note, much of the most promising oil exploitation on the continent is in some of its weakest states, including Angola, DRC and Equatorial Guinea. Giving that building strong governing institutions is a decades-long process, what can we do now to protect civilians and their environments in these oil exploitation settings, and what do we do to avoid another debacle like the Cameroon-Chad pipeline?

CH: The Chad-Cameroon Development project was a classic example of outside agencies (the World Bank) trying to build institutions, while the government was willing to agree to almost anything and the oil companies champing at the bit. Although I certainly don’t argue in the book that the project was a complete disaster, even the World Bank’s own evaluation recognized that these institutions were too rigid and hadn’t been allowed to develop naturally. Therefore I think the only practical way to proceed is for governance institutions to be developed within the countries, simultaneously with production. Civil society and media are crucial to this, as is helpful monitoring from international donors.

Although some of the campaign groups I profiled argue that there is a case for ‘leaving oil in the ground’ while democratic participation and accountability is improved, I believe it is unrealistic to imagine that oil production will be put on hold. I saw nothing in three years of research that suggested there was a serious challenge to the speed of development of Africa’s oil potential because of developments in alternative energy sources (something that I personally found quite disappointing), nor did I see anyone in any of the countries I profiled arguing against exploitation. The only thing that would possibly slow down development is a price crash, and that is exactly what we’re experiencing now, with big questions over some of the exploration in East Africa. That gives us a window of opportunity to push for better institutions to handle oil wealth to be developed. But I’m sure that as soon as the price recovers, the race will be back on.

Celeste Hicks is a freelance journalist specializing in Africa. Follow her on Twitter