Categorized | Africa, World

The Exploitation Game: Mozambique’s Natural Resource Dilemma

Fort of Sao Sebastiao, Island of Mozambique. Stig Nygaard - Flickr

Fort of Sao Sebastiao, Island of Mozambique. Stig Nygaard – Flickr

 

 

 

 

 

 

 

 

 

 

 

Mozambique had the luck of a lottery winner in 2010 when vast gas reserves were discovered offshore in the Rovuma Basin. Amounting to some 85 trillion cubic feet, this is one of the biggest gas discoveries of recent times. If properly harnessed, the discovery has the potential to turn the country ‘s fortunes on its head, boost the economy by 900%, and transform Mozambique into the world’s third largest exporter of LNG.

Presently one of the poorest countries in the world, a constant presence on the bottom rungs of most development indices, this offshore gas field has the potential to be transformative for Mozambique. That is, if it can capitalize on it.  Unfortunately for the African nation, there are significant challenges that must be overcome, largely caused by those who wish to exploit the country’s natural resources for their own gain.

Within its borders, the military wing of the RENAMO political movement is rearing its head once more, creating fears that the civil war which between 1976 and 1992 claimed more than a million lives, could be revived as ‘decomposing corpses in the bush, destroyed villages [and] abductions’ once more creep into the national psyche. The situation has already escalated so much so that the former president of Malawi, Bakili Muzili has offered to mediate between RENAMO and the ruling party Frelimo because, as refugees begin to move into neighboring African countries, the situation in Mozambique is already threatening to destabilize its neighbors. So far, at least 8,000 Mozambicans have fled to Malawi, but, according to the World Food Program, the numbers are expected to swell by at least 30,000 more by October 2016.

That RENAMO have chosen this juncture, when Mozambique stands on the precipice of prosperity it could never have previously dreamed of, to recommence its attacks smacks of opportunism.  RENAMO has always attempted to have one finger in the political pie and one on the trigger. Happy to take part in democratic processes when things were going its way, equally happy to sidestep them and attempt to take power by force when they are not. Despite being integrated into the democratic process, RENAMO has always kept a military force of its own – ready to deploy for political advantage. And certainly the political advantages of seizing power now are obvious.  With the government so close to billions in gas wealth, any irredentist claims from RENAMO can only be seen as an opportunistic way for the opposition to gain power and secure a direct line to the honey pot.

However, their actions alone put the likelihood of that honeypot ever reaching its full potential into jeopardy. No matter how rich the spoils, foreign companies are reluctant to invest in country with internal strife. And while the government faces these problems from within, it also faces problems from without in the form of rampant illegal fishing that threatens the country’s food security.

Mostly orchestrated by Chinese vessels operating illegally off Mozambique’s coast, these trawlers deprive the government of some $35 million a year. In fact, according to 2013 figures, only one out of the 130 ships operating in its waters was actually registered in Mozambique. This is not only bad news financially for the government, but also for Mozambican dinner tables, as the population is 50% dependent on fish for proteins. That, in a country where World Food Program estimates that 34% of households are “food insecure and face perpetual hunger”

To combat the problem, Mozambique’s leadership has invested millions in buying patrol boats and drones to police its waters and stamp out illegal fishing. However, simply buying these boats has plunged the country into debt, sparking opprobrium from investors and leading the International Monetary Fund – although on June 24th, the fund said they made made “solid progress”. Mozambique is now trying to explain how the acquisition of these vessels was prompted by the severe food security risks it faces. How could the country rebound economically when it can’t even put an end to the illegal activities happening in its own coastal waters? This, of course, makes sense. The nation might be sitting on a goldmine in terms of its natural gas resources, but, as President Nyusi has pointed out ‘There is gas, but gas is not edible. So we still put priority in agriculture’. It has found itself in the familiar position of needing to speculate in order to have even a slim chance of accumulating.

Mozambique is, in many ways, a victim of its own success. The prospect of making billions from natural gas reserves has sparked new skirmishes between government forces and rebels and ironically jeopardized the chance of the gas market even bearing fruit. The rather urgent priority of keeping the nation fed has led the nation falling foul of penny-pinching international investors so focused on their desire for a quick return that they turn a blind eye to the very real problem that illegal fishing poses to both Mozambique’s food security and its economy.

If Mozambique is to take its potential place as one of Africa’s leading economies, it must be allowed to exploit its natural wealth for the good of the nation and crack down on those who want to funnel the spoils away from those who need it most.

 

 

 

Tom Wirth

About Tom Wirth

Originally from Düsseldorf, Tom is a recent graduate in International Affairs from St.Gallen (with a focus on Africa), and is an aspiring foreign policy analyst in preparation for a PhD in Conflict Analysis.

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