By Anthony Orlando
Malawi has long suffered from extreme poverty, but the government now fully backs a proposed solution to the problem: developing huge potential oil and natural gas reserves found under the country’s eponymous lake. Profits from the oil, currently of unknown value, can theoretically be used to start a fund to invest in the country and bring it to prosperity. However, the risks associated with exploiting the carbon resources under Lake Malawi must be considered. In fact, this venture is more likely to cause economic, environmental, and political damage that may continue to keep Malawi in poverty for generations.
Malawi is one of the world’s least developed countries, ranking 170th out of 188 on the United Nations Human Development Index, so it is understandable why the government seeks quick fixes to its economic woes. Recent years of extreme weather such as flooding one year and drought the next – exacerbated by climate change and El Niño – have stressed the people of Malawi and their agrarian economy. However, rather than putting resources toward potentially catastrophic oil drilling, Malawi should focus on sustainable methods of economic development, such as supporting fishing industries by employing policies to preserve the lake and its stock and continuing to develop as a tourist destination.
The biggest risk in drilling for oil would be a spill. An oil spill would be devastating to the wildlife and cleanliness of the water. The damage would not just be ecological; there would be a direct human cost to an oil spill as well. In Malawi, one-fifth of the population, a total of about 3.5 million people, are undernourished and large swaths of the country depend on fish from the lake for protein. This is bad enough even before considering the need for clean water in the country. Malawians along the lake count on it for their water supply, and a proposed project to pump water from the lake to the capital city means that, soon, two million more may be in jeopardy if the lake is contaminated. While the exploitation of the oil under the lake may increase the economic well-being of some, a single spill can wreak havoc on people’s health—even the rich need clean water.
The environmental havoc of a spill in Lake Malawi would have immediate economic effects as well. Fisheries account for the livelihoods of approximately 10 percent of the population. Not only an oil spill would kill wildlife in one of the world’s most biodiverse environments, but also ruin the livelihoods of the millions of people who depend on the lake. Investment in oil will diminish from sustainable investment in other parts of the lake, such as tourism, fishing, and aquaculture. Tourism, which represented 7.2 percent of the country’s gross domestic product in 2016, is driven in part by government efforts to develop itself as an eco-tourist destination since the lake is a major destination for tourists. It would be a shame if poor government policy led to the drying up of the 217,500 jobs and foreign currency which tourism delivers to Malawi. Rather than drill for oil in the country’s most important natural resource, the government should encourage improving the existing industries.
The government’s confidence in the strategic economic outcomes of this project are misplaced. For example, both Nigeria and Venezuela made big bets while oil prices were high and ended up losing big when oil prices dipped across the global market. Malawi would be taking these risks while global oil prices are low, meaning that even the short-term payoff would be minimal. It would be far better to focus on long-term, sustainable development of the water resources already available for use.
Finally, regional considerations must be made. A spill would also affect Malawi’s neighbors in Tanzania and Mozambique, that also border the lake and have a stake in keeping it clean and productive. Tanzania, which officially addresses the body of water as Lake Nyasa, holds a long-standing claim on the northern half of the lake. Even prior to exploration, the very idea of the potential of finding oil under the lake has exacerbated a border dispute between the two countries. Continuing to push for development of the lake may cause Tanzania to escalate the dispute in one form or another. It is best for Malawi to focus on internal development issues, and not antagonize its bigger, richer, and militarily stronger neighbor.
Lake Malawi is a precious resource, and should not be used to gamble on Malawi’s future. Extracting carbon resources under the lake may seem like a quick way to improve Malawi’s economy, but the social, environmental, and political risks are simply not worth it. Leadership in the country may see a jackpot under the shores of Lake Malawi, but they would be best to leave it buried.
Anthony Orlando is an Africa Fellow at Young Professionals in Foreign Policy (YPFP). He is also an Associate Consultant with WARC Consulting, based in Freetown, Sierra Leone. Anthony graduated from The University of Arizona with a BA in Economics & East Asian Studies.