Oil is known as a resource curse: an asset that should liberate a nation from the jaws of poverty, ushering it into prosperity but instead leads to corruption and poverty.
Last week, the National Petroleum Corporation of Namibia announced it and its partners – Shell Namibia Upstream BV and QatarEnergy – have discovered light oil at the Graff-1 deep-water exploration well located in the Orange Basin some 270 kilometres away from the diamond mining town of Oranjemund.
Simultaneously, Canadian oil and gas giant ReconAfrica is conducting exploration in the two Kavango regions.
Since touching down, ReconAfrica has been accused of veering from the existing environmental agreements, lack of consultations and cutting through virgin forests.
While recent oil discovery off the coast of Namibia could attract billions in investment into the country, there are fears that what appears to be a blessing, might indeed be a curse.
It is informed by experiences in other parts of Africa, where oil has caused political instability, driven up corruption and benefited only a select few.
Oil-exporting nations which have seen livelihoods and economies devastated include Nigeria, Venezuela, Angola and DRC. But Norway, Canada and Botswana have seemingly bucked the curse through strong state management and corruption-proof institutions.
During a roundtable discussion with local journalists on Thursday, Mines and Energy Minister Tom Alweendo said the ‘curse’ associated with oil discovery in developing countries must be rejected and demystified.
According to the former Bank of Namibia governor, the biggest economic powerhouses of the world have been built on oil; the Middle East, United Kingdom and the United States of America.
“It is not a given to say just because there is oil, there must be a curse,” Alweendo dismissed.
He conceded that if not well-managed, oil can lead to instability.
“Oil is a curse when the wealth generated from it was not used by the government to spread to everybody else. Some people stole money from the oil,” he said.
To avert this, he added, Namibia will learn from other countries to avoid sinking into the same pitfalls.
While the proverbial ‘three months of January’ are now in the rear mirror, Alweendo said the upsurge of fuel prices will continue.
This is influenced by the price of crude oil which has increased by over 22 per cent over the past six months.
“The increasing fuel prices will put pressure on the economy and consumers. It concerns us and we are figuring out how we are going to deal with it,” he said.
The technocrat and politician added that it is too soon to tell if the recent oil discoveries in Namibia will bring a sigh of relief to consumers.
“The cost of oil also depends on the cost of production. The reason why oil is cheap in the Middle East is that the production cost is low. In Angola, oil is cheap because the government is subsidising it. But when you subsidise, you must make sure it is sustainable,” he expounded.
Source: Namibia Press News Agency
