The money could make the country more resilient — if it doesn’t just end up causing more conflict and corruption.
By Leigh Elston
Ms. Elston writes about the energy industry in sub-Saharan Africa.
MAPUTO, Mozambique — On Tuesday evening, five days after Cyclone Idai hit central Mozambique and the rains started, thousands of survivors were still stranded, waiting to be rescued from trees or the roofs of houses.
On that same evening, far from the floods, I was in an air-conditioned office here in the capital with a group of bankers and oil industry executives, hearing about how rich and happy Mozambicans would soon be. Standard Bank was presenting a new report on the billions of dollars it predicted the Mozambique government will earn from the giant natural gas projects the American oil companies Exxon Mobil and Anadarko plan to start building in the northernmost province of Cabo Delgado this year.
We observed a minute of silence for the victims of the flood. What was not observed was the possibility that climate change, driven by the oil and gas industry, had any responsibility for the natural disaster.
If the Standard Bank report is right, Mozambique will earn $80 billion to $100 billion over the next 30 years from Exxon’s project alone. Anadarko’s project is estimated to deliver $67 billion. Those are huge sums in a country whose gross domestic product is estimated to be around $14 billion.
With that kind of money, the government could hire around 850 doctors and 17,600 teachers, build 3,200 low-cost homes and provide 4,000 hospital beds, per year the bank estimates.
It could rebuild Beira, Mozambique’s fourth-largest city, 90 percent of which is estimated to have been damaged or destroyed by Cyclone Idai, and the town of Buzi, home to 200,000 inhabitants, which is totally submerged.
It could also fund a proper climate risk management and resilience program, which would be able to provide better warning of disasters, giving people time to evacuate, and improve rescue and relief efforts. It could finance the building of houses, schools, hospitals and roads better able to withstand storms and flooding.
This should be a priority. Mozambique ranks third in Africa as the most exposed to weather-related hazards, including cyclones, droughts and floods — the number and intensity of which are likely to increase.
Historically, Mozambique has contributed less to climate change than almost any country on the planet. The gas plants could be argued to have a net emissions benefit, as much of the gas will be liquefied and shipped to China to replace dirtier coal-fired power.
“But being better than coal is a low bar and is not enough for a stable climate,” said Jonathan Gaventa, a senior associate at the sustainable development think tank E3G, who recently moved to Maputo. “Both coal and gas power generation are also beginning to be challenged by low-cost renewable resources.”
That doesn’t change the fact that Mozambique needs the money. But will it really improve the lives of ordinary people?
I saw one attendee leave the presentation early. “I had this awkward feeling — with thousands of deaths and the emergency, and I am here discussing who gets the biggest piece of the cake,” he told me later.
Weak state institutions and low government accountability make Mozambique vulnerable to the “resource curse” — when a dependence on natural-resource revenues leads to higher rates of conflict and corruption and a decline in democracy and economic growth.
The conflict has already begun. Since October 2017, Islamist insurgents have been attacking villages, burning houses and decapitating residents in Cabo Delgado. Little is understood about the cause of this violence, but rising poverty and inequality are thought to be at its root. The gas projects will further disrupt the area’s economic balance.
The government has cracked down with mass arrests. Human Rights Watch has reported that the “security forces have allegedly arbitrarily detained, ill-treated and summarily executed dozens of people they suspected of belonging” to the insurgency.
Since Cyclone Idai hit, the insurgency has dropped from the headlines, aided by the fact that the governor of Cabo Delgado has reportedly ordered journalists to stop covering the conflict. At least two journalists have been detained for doing so.
Corruption is also worsening. In 2016 it was revealed that the government had secretly taken out $2 billion in debt, backed with illegal state guarantees, assuming that the money could be repaid with revenue from the gas projects before anyone noticed.
According to a United States Federal District Court indictment of three former Mozambican government officials and others, at least $200 million of this money was spent on kickbacks and bribes. Some of the rest was used to buy military patrol boats, at a vastly inflated price, which were supposed to protect Mozambique’s seas and rivers. Not one of these boats has been deployed for the cyclone relief effort.
All this, perhaps, gives a better indication of what the gas revenues may be spent on, rather than schools or climate resilience. Some employees at the oil companies have even whispered that perhaps it would be better to leave the gas in the ground.
But that won’t happen. Presidential elections will be held later this year. Frelimo, the party that has won every election since independence in 1975, will win again. The gas projects will move forward. Revenues will be used to tighten the party’s grip on power. Corruption and inequality will increase. And long after the flooding from Cyclone Idai has receded, the poorest Mozambicans will still be left stranded.
Leigh Elston is a journalist covering the energy industry in sub-Saharan Africa.
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