Open data on oil production can limit conflict

Earlier this year, the Nigerian National Petroleum Corporation (NNPC) admitted that “Operational secrecy hampers Nigeria state oil company’s input to economy development.”

This serves as a lesson to emerging oil producers like Kenya that if oil is to contribute to economic growth, open data becomes an imperative which can limit conflict and necessitate sustainable exploitation of the resource thus preventing the proverbial natural resources curse that seems to bedevil African nations.

As Kenya gears to join oil exporting countries, transparency will be key to negotiating with many stakeholders along the supply chain.

These include resident communities, media, shareholders, service providers, non-governmental organisations, contractors, national government regulators and other neighbouring communities that will provide the passageway and water resources essential for drilling of oil.

Tullow, the pioneer oil explorer in Kenya, has started a stakeholder engagement in earnest.

To their credit, they have done a lot more on the ground than the public knows without blowing their own trumpet. They have built schools, health facilities and provided water in a region where water is scarce.

This, however, is not sufficient for the organisation to weather the treacherous road ahead of taking their oil to market. Despite the ongoing displacement of fossil fuels by cleaner, renewable energy, virtually every stakeholder has false expectation of riches based on past experiences from oil producing countries.

As such, every barrel of oil must be accounted for while publishing market prices regularly to build a realistic culture of data.

In this era of fake media, it is fairly easy for the country to be taken off tangent causing an unnecessarily delay of the much-needed resources for economic development.

As one of the key participants –when I was in government - in the formative stages of Open Government Partnership, we put more emphasis on extractive industries to embrace open data.

This was because natural resources in many developing countries, especially in Africa, had become the source of underperformance - often referred to as the “resource curse” – in what IMF in 2010 attributed to failure by governments to properly address the institutional and policy challenges that come with natural resources.

While Tullow is doing its part with respect to stakeholder engagement, the National Government must come clear to address institutional and policy challenges that can simply derail the entire project.

The Vision 2030 – another project in which I played an instrumental role – had an elaborate plan to open a northern corridor that connected Kenya from the Indian Ocean to Africa hinterland.

Its implementation, will ease pressure from the construction of the oil pipeline to Lamu. It is imperative that the Government be at the forefront of open data by publishing the names of companies (including the identities of the owners) allocated land for natural resources exploration.

Trust requires full disclosure including the consideration for allocation. Failure to provide such data will be a recipe for politicization of extractives that we desperately need to boost economic performance.

By data I mean everything including minutes of negotiation for and on behalf of the citizens.

A 2013 report by Revenue Watch noted that, “Some countries negotiate poor terms with extractive companies, forsaking potential long-term benefits. Many countries do not collect resource revenues effectively. And even when resource revenues do end up in government coffers, they aren’t always spent in ways that benefit the public.”

Examples are many but Nigeria and Angola, two African nations with huge oil reserves, have failed to leverage the resource to reduce inequalities. Instead, Nigeria has replaced India as the leading nation with poorest people.

In October, Kenya won the bid to host the sixth International Open Data Conference in Nairobi, which will be held in Africa for the first time in 2020. It presents the country with an opportunity to demonstrate to the entire world the benefits of open data if we partner with Tullow to showcase how good governance in extractives should be done.

Considering the fact the principal explorer is willing to lead the way, it is our turn to overturn the “resource curse” label and emerge victorious.

The writer is an associate professor at the University of Nairobi’s School of Business.

The views expressed in this article are of the author.