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Highlighting Eritrea as An Investment Destination (By Peter Kohli)

By   /  May 17, 2016  /  Comments Off on Highlighting Eritrea as An Investment Destination (By Peter Kohli)

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international62This is not a test, but: How many have heard of a country named Eritrea? Do you know where it is? Okay, you’re much smarter than I thought. Yes, it is a country in Africa and to be precise, in the Horn of Africa. As is mostly the case in Africa, news from poverty-ridden Eritrea is negative — an autocratic government, no press freedom, no civil rights, no investor protection, no anything. So why you may ask am I highlighting this country?

Well, guess what, it has oil. For decades the country was mired in fighting, first among themselves and then with every neighboring country. The East African news website amoraview.com published a very well-written article detailing the trials and tribulations of Eritrea with one memorable paragraph: “A lifetime dictator, Eritrea’s first and only president managed to establish the world’s nastiest tyranny. Soon after assuming power, the long time rebel leader started by assassinating fellow handicapped fighters, who merely asked for better life. The fledgling state of Eritrea, with its dross economy went to war with all its neighbors, gaining nothing but increasing isolation and crisis. No one can expect any good from a country with no democracy and a president who has rescinded the constitution.”

But after decades of being shunned by world powers, someone ran to the top of a sand dune and yelled, “We got oil!” And the next thing you know, the European Union, in all its pomposity, started mending fences. Countries like Britain and Germany among others beat a path to the Eritrean front door and soon the Italian Vice Minister of Foreign Affairs had signed an agreement on behalf of the EU restoring relations. Surprise.

 Companies such as Soma Oil and Gas arrived with a pot of money and began the exploration. Just as an aside, one of the major stockholders of that company is Lord Howard of Lympne CH, QC. He once went by the name of Michael Howard, the leader of the Conservative Party in the UK who, had they won the election, would have been the second Jewish Prime Minister of Britain, the first being Benjamin Disraeli. Yes, I’m full of useless info.

Other companies now involved in exploring and extracting oil are Tullow Oil (TLW), Italy’s Eni (ENI) oil company, and the joint Chinese-Eritrean venture Defba Oil Share Company.

The African Development Bank has high hopes that the country will open its economy to more foreign investment and revamp its government. But when Djibouti Foreign Minister Mahmoud Ali Youssouf recently said that they have excellent relations with all their neighbors except, yes, Eritrea, you know there is an issue.

Let’s hope that, as has happened in other countries, the Eritrean people soon begin to say enough is enough and demand better treatment so that prosperity can then be shared by all. Do you think oil companies will help in this regard? I’m not holding my breath.

 

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