How Gambia Can Avoid the Timis-BP-Senegal Oil Scandal
Countries have the sovereign responsibility and their citizens expect them to use their natural resources responsibly. One sure way to achieve this is to ensure that right from the start they negotiate contracts that are in their interests. Countries that are already in agreements that disfavor them should find all means possible to renegotiate them.
Gambians have been weighing in on the recent BBC Panorama program investigation on the alleged oil deal and secret payments involving the brother of Senegal’s President and a roving bandit-cum dubious predatory Romanian/Australian business man – the type that fleece African countries out of billions from our natural resources.The Janneh commission of enquiry provided evidence on how Yahya Jammeh raided the revenue from Gambia National Petroleum Company (GNPC) by using the income from selling petroleum data and exploration licenses and turned it into a dedicated account at the Central Bank that Jammeh controlled. What lessons can the Gambia learn from this episode given that Yayha Jammeh abused his office to deprive Gambians from oil license revenue by diverting GNPC funds for his personal use?
The Gambia government has signed oil exploration agreement with BP details of which the Gambians citizens do not know.We have been given assurances by the Minister of Petroleum that the Senegal scandal cannot happen in The Gambia. If that is the case and to reassure the Gambian population, I have one simple proposal to the government officials. Please sign up to the Extractive Industries Transparency Initiative (EITI). This simple policy is not costly and easy to implement and will ensure transparency and build public trust on the management of the oil exploration contracts as well as other mining contracts such as the contract that was awarded to Gambia Angola China (GACH) mining company in opaque transactions to export the heavy mineral concentrated sand locally called “black sand” from the country.
EITI is the global standard for good governance of oil, gas and mineral resources. If the government want to be really transparent in managing the prospecting for oil and eventually the discovery of oil, as well as managing whatever revenue accrue into the government coffers, it should take the bold step and join the 52 other countries that have signed up to the EITI.
The EITI standards require countries and companies to disclose information on key steps in the governance of oil, gas and mining revenues. This range from how extraction rights are awarded, to how revenues make their way through government and how they benefit the public.
Natural resources in any country belongs to the citizens and people want to be informed and they have a right to know how much the government is getting from natural resources. Information should be published to promote good governance and avoid corruption, elite capture and misuse of funds that belongs to citizens.
One of Africa’s biggest governance challenges is that when it comes to natural resource management, there is always vested political interest and powerful actors involved, including some of the largest companies like BP.The history of natural resource exploitation has fueled corruption and conflict in Africa and we have seen the devastation of conflict in Liberia, Sierra Leone and DRC to name a few countries. There is governance deficit associated with extractive industries in Africa. Just look at the largest oil producing countries in Africa such as Nigeria, Equatorial Guinea, and Angola. They have some of the highest poverty rates and low human development index, and a country like Chad is among the least developed countries in the world despite its oil resources. In other words, the discovery, and exploitation of oil has not benefited the population as a whole, but a few elites and their sycophants.
Natural resources provide an opportunity for transforming the economic progress of a country.With revenue from natural resources, we can solve the scarcity of foreign exchange, mobilize domestic funds to finance much needed infrastructure development without recourse to external borrowing hence reducing the level of indebtedness. In addition, the revenue realized from sub-soil assets can be used to transform surface assets of human and physical capital that can generate sustained growth.
Few lessons for the authorities:
- It is important to publish revenue data from extractives
- Contract transparency should be the norm
- Licenses should be granted in an open competitive basis.
- Sign up to the Extractive Industries Transparency Initiative.
Basil Jones is the Gender and CSO Program and Policy Coordinator in the African Development Bank’s Gender, Women and Civil Society Department. Prior this he was the Advisor to the Special Envoy on Gender and Vice President of the African Development Bank in November 2015 to December 2016. Other positions he has occupied in the Bank are Assistant to the Chief Economist and Vice President, of the Economics Complex from June 2012 to September 2015 and Principal Capacity Development Specialist in the Bank’s Fragile States Unit from June 2009 to May 2012. Before joining the Bank, he worked for 8 years as a Senior Program Specialist with the International Development Research Centre (IDRC) in Senegal and Kenya. He worked at the Central Bank of the Gambia Economic Research Department from 1988 to 1997. He holds a PhD in economics from the University of Hull in UK.