The role of MNCs as a channel of the resource ‘curse’ : insights from gas-rich Mozambique

Abstract

The resource ‘curse’ is premised on an inverse relationship between mineral wealth and economic growth. The declamation pertaining to the reasons for, and exceptions to, the resource ‘curse’ remains inconclusive. MNCs are cited amongst the reasons for the resource ‘curse’, particularly in developing economies. However, Africa (and the role of MNCs) remains underrepresented in resource ‘curse’ literature. In light of this, the study’s aim is to determine how MNCs in Mozambique’s gas sector could be considered a causal channel of the resource ‘curse’, as the contest for relatively untapped natural gas reserves in Mozambique is intensifying. An exploratory case study is provided, where Phase I consisted of 11 qualitative interviews with 14 oil and gas experts while Phase II analysed secondary data in the form of public documents and audio-visual materials, intended to supplement and verify the interview data. The results reveal that MNCs (i) promote and prioritize their CSR initiatives to mask their inability (or unwillingness) to adhere to local content directives and (ii) leverage the diplomatic relationships of their home country government to supersede the host country’s sovereignty. Moreover, the Mozambican government’s cultural practices exacerbated the prospects of a resource ‘curse’ outcome. The study concludes that the MNC, in the case of Africa, in particular Mozambique and Angola, is indeed a channel of the resource ‘curse’.