Natural Resources & Conflict in Africa

Natural Resources and conflicts in Africa PSC Open Debate

DÉSIRÉ ASSOGBAVI Resident Representative & Head of Oxfam International Liaison Office to the African Union 11 February 2016

Facts 1. Two thirds of the worldâ€&#x;s poorest people live in countries rich in natural resources, but often characterised by poverty, inequality corruption and conflicts 2. A number of African countries have, unfortunately, become examples of the “resource curse theory, which argues that resource-rich countries grow slower than resource-poor countries 3. In the last 50 years at least 40 per cent of civil wars in Africa have been connected with natural resources Page 2

Africa„s Natural Resource Base • 12% of the world„s oil reserve • 60% of the world„s uncultivated arable land • 60% of Gold, 72% cobalt and chromium • 8 billion cubic meters of natural gas

• 60 billion tons of coal • Huge energy potential: Over 1.1 million GWh of exploitable hydro capacity -- 9000MW of geothermal potential

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3 Questions Today • Is there causal relationship between natural resource endowment and conflicts ?.... If so…

• What drive conflicts in natural resource-rich area?

• How can we champion structural transformation, boost inclusive economic development & avoid conflicts?

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A Timely Debate

This debate is very timely given the current situation of Africa‌ AUC reported on 20 conflict situations in africa to the last AU Summit The prospect of implementing Agenda 2063‌.

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Conclusions of the State of P&S in Africa – Jan 2016

In the framework of the Agenda 2063, the AU is committed to silence the guns by year 2020.

In light of the current state of peace and security on the continent, marked by increasing threats, it should be stressed that many challenges remain to be addressed to fulfil this commitment‌ Page 6

Natural Resources = Conflicts?

• There is no consensus on direct relationship between natural resources and conflicts • The struggle over access to-- and control over-natural resources is often a source of political contentions within nations/communities • Also countries whose wealth is largely dependent on natural resources exploitation have a higher risk to fall into civil conflicts

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What Drive conflicts in Natural Resource-rich area?

• Competition for control of natural resources, e.g. between armed groups, between small-scale & largescale miners

• Displacement of communities by mine/oil projects • Pollution of land and resources needed for community livelihoods • Corruption & mismanagement of oil and mining revenues • Lack of perceived benefits to communities • Lack for prior consultation with affected communities • Lack of info about impacts and benefits of extractive projects • Poverty and inequality Page 8

“In DRC rebellion is easy: all you need is ten thousand dollars and a satellite phone ---With 10000 dollars you could hire a small army and with a Satellite you could start making deals with international resource extraction companies�

Late DRC President Laurent Desire Kabila Page 9

The Problem • Instead of creating prosperity, if resources are used to foster corruption, undermining inclusive economic growth, damage the environment etc…

• Rather than investing resource revenues into infrastructure, heath and education, if politicians, often, in collusion with multinationals direct the wealth into their own pockets…

• We come to this equation: Abundance of resources + weak governance/accountability = inequality = frustration = conflicts…

• Examples: Top oil producers Nigeria, Algeria, Angola, Egypt, Libya, Sudan, the Republic of Congo and Equatorial Guinea faced conflicts and/or repressive regimes…

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“People know that they will not be allowed to enjoy the benefits of our oil unless they fight�

A rebel leader in Nigeria to an NGO investigator

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Quote from Agenda 2063

“While peace and stability characterize countries that have properly managed the use of their natural resources‌. instability and state fragility have reigned in countries with poor resource management recordsâ€?

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Dimensions of the Resource Curse

•Slower economic growth •political corruption •Predatory institutions •Violent civil conflict •Undemocratic regime

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2 types of Actors • Those who have no interest in preserving the state or its people, but are simply intent on loot • Those who take control of the state and seek to maximise their own profit by encouraging stability and growth in their new domain

• International Actors: Multinationals and even governments can be linked to any of those actors • In DRC: who has interest in the end of the conflict and stability?

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Resources do not automatically lead to poor outcomes • Botswana…. gives us the closest example, least corrupt country in Africa • Canada remains among the top world oil producers, but has one of the least corrupt governments in the world • Resource-rich countries that enjoy economic growth have a transparent payments mechanism, which leads to effective management of their resource revenues Page 15

How to resolve conflict around natural resources?

• Governments must obtain the Free, Prior and Informed Consent (FPIC) of affected communities before EI projects go forward • FPIC is globally recognized right, including by ECOWAS and the African Commission on Human and Peoples Rights

• Companies must fully disclose all payments and contracts • Legally required to do this now by Dodd-Frank Act in the US and European transparency directive

• Companies must respect and governments must project human rights, especially when communities are resettled by EI projects

• Women in communities must have a voice in decisionmaking and their rights must be respected as they suffer the worst negative impacts of Extractives Page 16

How can we make Africa people profit from Natural Resource revenues?: Transparency, Accountability, Responsible Public Spending, Community Involvement

• Governments must be more transparent and involve citizens and communities in oversight of Extractive operations through independent monitoring • Parliaments must take seriously their oversight function -- review Extractive contracts and hold the executive accountable for investing revenues wisely Page 18

• Increased transparency in mining contracts

• Renegotiate some contracts with corporations • Taking the step from transparency to actual accountability -- requires a civil society with the skills and training for effective monitoring.

• Decisions must be representative of citizens‟ needs, freely accessible and subject to democratic oversight Page 19

Sustainability Given the finite nature of natural resources, we should create strategies for:

Economic diversification and Mitigation of environmental impacts of natural resource extraction Page 20

Inter-generational wealth • Africa‟s natural resources should not be exhausted by our generation • We should ensure policies that leave something behind for future generations.

• Given the growing concerns on climate change, and after the recently concluded COP21 Summit in Paris last year, debates and strategies towards natural resource governance must be forward looking.

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Coordinated Continental response • African Union: African Mineral Charter by 2017?

-- Building on the foundation of the African Mining Vision • Speeding the process of African Mining and Development Centre

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SOME BEST PRACTICES ON RESOURCE MANAGEMENT IN AFRICA

• Botswana used diamond wealth to reduce unemployment and support consistent economic growth that has transformed the country into an African “success story”.

• In Ghana, the government created the Ghana Petroleum Funds (GPF) which consists of the Ghana Stabilization Fund (GSF) and Ghana Heritage Fund (GHF). It is designed to ensure that their oil wealth is insulated from short-term political pressures and is instead used to provide for the needs of future generations • Ghana established an accountability political and business leaders

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Thanks for your Attention !

Twitter: @assodesire Blog: assodesire.wordpress.com Tel. +251 911 20 83 32 Desire.Assogbavi@oxfaminternational.org assodesire@yahoo.com