Turkana oil wealth…

Curse of violent conflict and grand corruption that could spoil the party

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BY BERNARD MATUMBAI

Poverty-stricken Turkana County is basking in glory, with big dreams of newfound oil wealth marking the recently unveiled Early Oil Pilot Scheme, an experimental programme that aims at testing the global supply logistics as well as determining the price-point of the Turkana oil.

Discovered in March 2012, it took close to seven years of controversy and sheer determination to extract the first barrels out of the oil fields.

Variously described as a historic moment that would see the Kenyan economy bolstered by international oil trade, the recent flagging off of the early oil pilot scheme came against a backdrop of numerous challenges, including the protracted disagreement on the distribution of the oil proceeds, culminating into overt threats by area leaders to frustrate the pilot scheme altogether.

It was not until President Uhuru Kenyatta summoned Turkana leaders to State House, Nairobi, where an agreement on how the oil benefits would be shared between the county and national governments was reached, that hope and calm appeared to return.

The Petroleum Bill sets the foundation for a revenue sharing formula between the national and county governments on the one hand, and the host community on the other, with 75% of the oil proceeds going to the Kenyan people through the national government, 20% to the County Government of Turkana and 5 per cent to the local community.

With the historic flagging off of the first barrels of the lucrative resource from the Turkana oil fields destined for the Kenya Petroleum Refineries in Mombasa, Kenya made an imprint on the continental map as an oil-producing country in East Africa, targeting the trucking of at least 2,000 barrels daily. 

But no lesser person than the President has tellingly warned of the curse that would come with negative competition for oil wealth. Alluding to some African states that had borne the brunt of high levels of violence, corruption and repression attributable to oil wealth, President Kenyatta sought to reassure Kenyans that the country would do everything possible to avoid getting itself in similar situations.

“The economies of countries that have failed to manage their resources have also suffered the ripple effect of suffering, hungry and poor citizens,” warned the President, adding that negative competition for oil and other natural resources had seen the previously peaceful nations go to war.

Waxing prayerful, President Kenyatta lamented that this sad state of affairs had seen “brothers take up arms against each other as mothers bury their children,” vowing to ensure that the Turkana oil venture would be a blessing that leaders will manage efficiently for the benefit of many generations to come.

In retrospect, Nigeria and Angola have witnessed deadly violent conflict attributable to disagreements on the distribution of oil wealth. Perhaps, Nigeria’s Niger Delta offers a chilling case study of the nexus between abundant endowment of oil in Africa with the infamous political economy of an oil curse – high-level violent conflict and corruption.

A demonstration of two separate worlds; of those who see new oil finds as a resource for development and those that see such endowment as portending the proverbial curse of oil, coated in violent conflict, corruption and totalitarianism.

If anything, scholars have over years invested heavily in interrogating the refrain that is the oil curse in Africa, with the underlying connection between its endowment and violent conflict. The universal nature of oil, war and corruption is a perfect summation of a prized resource that is, ironically, a source of conflict. What, with the overriding refrain that man is irrevocably evil! 

The Niger Delta experience is a cunning implication of how dire ineffective resource management can cast a spell of doom – official corruption, armed ethnic militia, piracy, kidnappings, environmental degradation and abandonment of traditional agricultural practices. It is worth mentioning that most of these atrocities could be referenced to exploitation – real or perceived.

Looking back, the standoff between Tullow Oil, the exploration firm, and Turkana residents date back to as early as 2013, with the locals citing various grievances bordering on insecurity and tangible benefits – jobs and tenders. On their part, Turkana leaders would variously accuse Tullow of disrespecting the local culture and declining to disclose the number of jobs and tenders awarded to locals.

More recently, a nasty transport stalemate had taken centre stage, resulting in a costly road blockade, which British oil explorer Tullow and their partners – Canada’s Africa Oil and Total of France – estimated at Sh200 million ($2 million). Conservative estimates show Tullow and associates have so far pumped in Sh200 billion ($200 billion) towards developing the Turkana oil fields. They expect to recoup the investment from the sale of oil.

Perhaps emboldened by the hard-line stance of a section of area MPs in tow, angry residents blocked five Mombasa-bound oil trucks at Kalemngorok on the Lokichar-Kapenguria highway, demanding that the government beef up security along the Turkana-Baringo border, recover stolen livestock as well as assure them of their ‘rightful’ share of job and tenders.

Turkana tribesmen walk with guns to protect their cattle from rival tribes in Baragoy. Insecurity is a major threat in the oil rich county.

Before the Petroleum Bill that laid the foundation for revenue sharing, local leaders had mobilized residents to partake of protests against the initial revenue sharing formula, sometimes leading to banditry attacks. 

The raft of problems bedeviling Turkana, Kenya’s second-largest county by land mass and seen to have suffered life-long neglect by successive regimes, shall play a central role in shaping the course of the oil wealth, what, with the overwhelming expectations for the elusive journey to advancement vide oil wealth.

According to available official statistic, Turkana is the poorest county, with 88% of the local population living below the poverty line, way above the national indicator of 45%. 

Other areas that require critical attention for accelerated development include hunger, roads, electricity, water, insecurity, low school enrolment ratio and illiteracy.

Things in this arid region have over years been worsened by heightened insecurity, with caches of small arms trickling in through permeable borders with the largely unstable neighbours, not to mention erratic attacks from Pokot cattle rustlers equally keen on Turkana’s newfound resource. As if that is not enough, the absence of subsistence farming has relegated the area to pastoralism as the main economic activity.

The Turkana community’s dream of oil wealth could as well be validly hinged on a cocktail of factors – historical, geographical and socio-economic in nature. One of Kenya’s smallest tribes, they inhabit remote confine bordering South Sudan, Ethiopia and Uganda.

Media reports attributable to black market undercurrents have previously emerged, with heavily armed illicit militia said to have sporadically been descending on the area for the newfound resource, even as dozens of residents reportedly conniving with unscrupulous workers to access crude from the oil wells.

Such are the escalating nature of fears of grand corruption that could only mirror the infamous Niger Delta’s $1 million (Sh100 billion) monthly losses incurred by government and oil firms in stolen oil.

For starters, the Niger Delta has one of the largest unquantifiable crude deposits in Nigeria, as well as being the country’s principal oil producing region. The region also has got the dubious distinction of having the largest presence of militia-run illegal oil refineries ironically operating right under the nose of overly corrupt government functionaries. Like in Turkana, critics have continued to cast aspersion on the Nigerian authorities’ commitment to empowering Niger Delta residents, who remain some of the poorest in Africa’s second-largest economy.

The largely impoverished residents of Niger Delta are documented to have resorted to stealing crude oil from corporate pipes to refine on their own terms and trade in the black market. This has resulted in an endless blame game between the oil companies, the government and the local community over the feverish cycle of plunder and violence, leaving little development to talk about.

The conflict in the Niger Delta that dates back to early 1990s can be traced to distrust between foreign oil companies and the region’s ethnic minorities – the Ogoni and the Ijaw – protesting supposed exploitation by foreign oil companies.

Not even Nigeria’s subsequent transformation to a democratic state could do much to assuage the already volatile ethnic and political turmoil that threatened to bring the region to a grinding halt. Negative competition for the oil dollar only helped fuel violence between ethnic groups culminated into the militarisation of the Niger Delta by ethnic militia groups, the military and police forces.

This sad state of affair would only add up to an energy crisis of devastating proportions, in effect scaring away foreign investors hitherto keen on exploiting new power generation plants in the region. It suffices to say that the ensuing violence morphed into top-level piracy and kidnappings.

Like the Niger Delta that suffered a great deal of pollution and environmental degradation, oil production activities are sure to hazardously impact on the lives of the Turkana people, the underlying commercial viability notwithstanding.

The documented troubles of the Niger Delta cunningly underline the magnitude with which inefficiency, corruption and violence could undermine the very essence of natural resource endowment in Africa. Yet, the misplaced neglect of traditional economic activities in favour of new oil and mineral finds menacingly continues to jeopardize long-term economic priorities.

In Equatorial Guinea, for instance, the oil boom once mutated into a near-disaster, with the 2013 recession caused by declining hydrocarbon revenues from low oil prices and decreed production of crude oil raring its ugly head.   

Many tough lessons can also be drawn from South Africa (gold), DRC (copper) and Lybia (oil), where only the latter epitomises success story in harnessing fresh ideas in the management of mineral and oil wealth.   

Hitherto, offshore crude oil and natural gas that dominated the tiny Central African nation’s mineral industry activities had occasioned the abandonment of coffee production, a key economic activity in the country. Never seeming to have recovered, Equatorial Guinea now imports beef from Brazil and milk from France.

The Equatorial Guinea’s analogy is desirous of the national and county governments to use the Turkana oil billions in improving fish and livestock production – being long term, friendly projects – in the region.

Observers say it is the singular onus of the county assembly to enact laws that will safeguard the resource; a turning point and major test indeed. With vast deposits of water, only a transformative agenda shall see the oil wealth directed towards alleviating the local community’s many socio-economic woes.