November 27, 2011 ·39 Comments
Anyone taking even so much of a scintilla of interest into commercial activity across Africa will recognize there has been a sea change in attitude towards business of late. China to its credit has proved that for all the challenges that exist, purposeful relationships can be formed and a sound case made for investment for the medium to long term. India has followed suit and now other nations are reassessing their approach and playing catch up. Of all the regions in Africa, until relatively recently the Horn of Africa was largely overlooked, risks were deemed too high and reliable data far too sketchy. All the signs are that 2012 will see a wealth of interest in the region and it looks likely that Somaliland will feature in a number of the discussions. No one disputes the fact that the country desperately needs foreign investment to develop infrastructure, broaden the base of the economy and provide employment. Such investment is welcome providing it is targeted, for the medium or long term, and mutually beneficial to the investors and the country as a whole. With Somaliland viewed by many as a de facto rather than de jura state commercial negotiations are all the more complex; there is potential high risk for both parties to any such discussions, but in the cold light of day it is Somaliland that is most vulnerable and companies and some unscrupulous individuals know this only too well. Matters have been made all the more problematic by the seeming paralysis at the heart of government. With Somaliland’s President both aged and dogged by ill health his years of distinguished service are being clouded by the activities of some of those closest to him who either choose to keep him in the dark about what is going on or seem more interested in carving out their own empires. So-called advisors prefer to pretend that all is well whilst jockeying for position and favour. Speculation and rumours are rife and in these troubled times the people are naturally anxious for news, and expect and deserve the truth. The President’s health is a matter of public concern, as Somaliland requires firm and decisive leadership if it is avoid a return to factionalism and escape the machinations of those who wish the state ill.
If Somaliland is to be able to move forward with confidence it must be in a position to make the most of its assets, namely its people, along with the resources of the land and sea. It is an absolute disgrace that currently the country is being denuded of precious trees to make charcoal so that the people in Saudi Arabia and the Gulf States can indulge their passion for smoking shisha. Equally scandalous is the fact that the coastal waters and Somaliland’s rich fish stocks are being allowed to be plundered with near impunity. As for oil and gas well here are two assets that excite considerable international interest, especially as Somaliland and its southern neighbour are believed to possess an estimated four billion barrels of oil. Any revenue generated from such assets needs to be put into a development fund which will help pay for infrastructure development and the establishment of projects for reviewable energy such as solar power. Sadly, it would appear that there is a real danger that it will be others who benefit from Somaliland’s oil and gas. A case in point is that of Block M10A and 35 “Berbera Block” in Guban Basin (an area of 16,270km2), the licence in this particular case states that London registered Ophir Energy as the Operator has a 75% interest, Ras Al Khaimah Gas Company (RAKgas) (JV Party) 22.5% and the Government of Somaliland 2.5%. Many would ask a quite legitimate question: Is this deal really the best Somaliland can get? Such possible deals remind us just how important it is that Somaliland has professional negotiators to protect its interest, people who are prepared to drive a hard bargain and if necessary walk away from the negotiating table. The Government of Somaliland must also be wary of becoming beholden to prominent Somalilanders in London and elsewhere who have set themselves up as so-called honest brokers and deal makers yet who appear more interested in acquiring a stake in precious assets on the cheap. After years of difficulties Somaliland deserves those in power to act responsibly, as trustees of the nation’s assets, to manage them with wisdom and transparency, with a stewardship that looks to the future and not just making a quick buck.
Mark T Jones
For more on Ophir Energy Plc visit: http://www.ophirenergy.com/assets/somaliland#licenceFollow @somalilandpress