“A guest, a large and irate man, stormed into our newsroom one day, absolutely furious. He demanded to see one of our staff members,” said a senior journalist at The Reporter, recalling an incident from almost two decades ago.
The guest’s target was a reporter specializing in topics relating to mining.
“The confrontation was immediate; the moment they met, he started yelling at him, threatening him physically,” said the journalist.
He strongly warned the reporter, using harsh words and gestures, to cease all news coverage regarding the Calub Ilala natural gas extraction project. The man identified himself as Somali-born and protective of the region’s natural resources.
At the time, the reporter maintained consistent coverage of ongoing attempts to extract natural gas in the area. SI Tech International (SIL), a Jordanian company, was one of the various firms that appeared in the Somali Regional State with the promise of petroleum development at the Calub and Hilala gas fields in the Ogaden Basin.
Last month, Prime Minister Abiy Ahmed (PhD) inaugurated the first phase of the Ogaden Liquefied Natural Gas (LNG) Project in Calub and launched the second phase. The Prime Minister also laid the foundation stone for two additional mega-projects: a fertilizer plant, a joint venture between Ethiopian Investment Holdings and the Dangote Group, and the Gode Oil Refinery, which will be constructed by China-based Golden Concord Group Limited.
In the span of a single day, the historically underdeveloped Somali region—lacking in critical infrastructure, industry, and social services—gained three new mega-projects and celebrated the launch of a fourth.
These projects are more than just economic ventures; they are a powerful symbol. The launch of the LNG project, in particular, was hailed as a historic moment heralding the country’s long-anticipated transition from being an energy importer to a producer. After decades marked by exploration delays, security concerns, and political skepticism, the dream of utilizing the Godie area’s resources finally began to materialize.
However, the news of this massive economic push did not receive welcome and celebration from all quarters.
For some, the gas project—rather than symbolizing inclusion—revived old questions of ownership, consultation, and equity in the federal government. The optimism surrounding Ethiopia’s “energy sovereignty” was shadowed by deep-seated mistrust and a feeling that once again, development was happening to the region, not with it.
A Silent Launch, Loud Reactions
The announcement was immediately met with resistance from the Ogaden National Liberation Front (ONLF), a secessionist opposition group that returned to the Somali Regional State via an amnesty deal in 2018.
An ONLF spokesperson condemned the projects, labeling the launch as “unilateral” and “a new chapter of colonial exploitation.”
This skepticism extended beyond the opposition group. Kamaludin Hassan, a Somali community mobilizer and activist based in Minnesota, USA, echoed the community’s distrust.
“The Somali people want development,” Kamaludin said. “Yet suspicion deepens due to a history of extraction without equity—opaque deals, stalled timelines, for instance, Chinese company Poly-GCL’s mirage, and federal dominance that sidelines locals, risking renewed conflict and marginalization.”
The core of the shared skepticism and outright condemnation from both the ONLF and individual advocates is the belief that the federal government bypassed consultation with the Somali people. Individual advocates expressed similar disappointment over what they described as “zero consultation with the local people.”
This reported lack of transparency exacerbated existing tensions.
“The fact that not even the local administration knew about the construction of the natural gas plant until Prime Minister Abiy launched it made the historic distrust between the Somali region and Addis Ababa worse and made the locals question what else is being hidden from them,” Kamaludin told the Reporter Magazine.
According to Kamaludin, “the biggest red flag” was the way these projects were launched with complete secrecy and zero consultation with the local communities.
“We do not have any knowledge of when these opaque contracts were signed, and we have no locals involved in the Ministry of Mines or the Ethiopian private investment corporation that is supposed to manage our resources,” he argued.
Kamaludin cited repeated delays in Poly-GLC’s project timeline, dubious deals reportedly valued at billions of dollars, and purported violations of the 2018 peace accord as reflections of the inequality booms that have taken place in countries like Zambia and Tanzania, and urged for swift regional safeguards to prevent pastoralist displacement and conflict.
The development of natural resources, including minerals, requires consultation and consent of local communities; a principle valued under both international standards and Ethiopian law.
Yet, a local resident, speaking to The Reporter Magazine on condition of anonymity, refuted any claim of engagement.
“We only saw it on a televised program,” the resident stated. “No one from the government or the companies came to us before the launch. We were not consulted, not informed, and now our land is changing in front of us without our input.”
This resident noted the lack of transparency.
“There have been no community meetings, no public environmental impact assessments shared in the local language, and few visible signs that local labor or businesses are being prioritized. For some residents, these projects feel imposed rather than shared,” he said.
The Reporter Magazine could not independently verify whether any form of consultation took place or ascertain whether the process was inclusive, as attempts to reach Somali regional officials were unsuccessful.
However, the Prime Minister’s statement during the ceremony seems to strengthen the claims of opponents and local communities. He remarked that he had kept the project secret to not give a chance to those he called “saboteurs”—a comment that activist Kamaludin Hassan noted “causes more apprehension than it solves.”
Legal Vacuums and Ambiguous Policy
A more structural problem lies beneath the political tension: the lack of a well-defined policy for the ownership and revenue sharing of natural resources between the federal government and regional administrations. Ethiopia has yet to establish a clear legal framework for resource management.
“The only petroleum-related legal framework dates back to 1986, from the Derg era, and it has never been substantially revised,” says Mohammed Ahmed, a policy researcher focused on resource governance.
In practice, the country employs a largely centralized approach toward mineral and related natural resources, yet this approach remains ambiguous and open to multiple interpretations. One key legislative stance is found in Article 40(3) of the FDRE Constitution, which states that the ownership of land and all natural resources is “exclusively vested in the State and in the peoples of Ethiopia.”
For lawyers specializing in mining governance, such as Yared Hailemariam (PhD), this particular article suffers from a linguistic ambiguity concerning the word “state,” given its slightly different interpretations in the Amharic and English versions.
Yared argues that this ambiguity in ownership “creates a vacuum in the assignment of ownership and, consequently, the legislative power and licensing authority over mineral resources.”
The expert notes that regional states frequently assert that the Amharic term for ‘State,’ ‘Mengist’ (government), implies their right to local control, directly conflicting with federal claims.
Based on a study, which included both doctrinal analysis (examining constitutional rules) and empirical investigation (assessing on-the-ground practice), the researcher concludes that the current administration of mining licenses “contradicts the constitutional division of power, as it fails to engage subnational actors in the decision-making process.”
The lack of well-defined policy also creates a significant gap in revenue sharing agreements for natural resources explored within regional states.
Somali Regional President Mustafa Mohammed Omar was quoted as saying in a public speech that the region “would be entitled to 50 percent of all revenues generated from oil and gas extracted within its territory.” The legal basis for this specific claim, however, remains unclear.
Mohammed speculates that the President’s assertion is likely based on an reportedly unpublished 2019 document drafted by the House of Federation (HoF). This draft reportedly proposes a 50/25/25 percent revenue-sharing formula (half for the producing region, a quarter for the federal government, and the rest distributed among other regions).
However, this proposed legislation was never ratified by the House of Peoples’ Representatives.
The result, Mohammed argues, is a governance vacuum that breeds misinformation and distrust.
“People assume there’s a secret deal or a hidden share, but the truth is there’s no formal mechanism at all,” Mohammed said. “This legal gray zone allows both suspicion and opportunism to thrive.”
Still, he acknowledges that the government’s opaque handling of the gas launch has aggravated the situation.
“If consultations were done, the authorities need to show evidence,” he said. “If they weren’t, then it’s time to begin. Silence only fuels speculation.”
In fact, the existing legislative framework for the sector, specifically Proclamation No. 678/2010 (The Mining Operations Proclamation) and its subsequent amendments already require license holders to engage with local communities.
This engagement is mandated in two ways: by consulting them when submitting an Environmental Impact Assessment (EIA) report, and by requiring the holders to participate in and fund community development Initiatives.
However, while the law explicitly requires consultation (a guarantee to seek and consider local views), critics argue it fails to unequivocally enshrine a community’s right to outright consent or refusal.
This crucial discrepancy between the spirit of the Ethiopian Constitution’s promise of community rights and the letter of the specific resource laws, which grant the federal government overwhelming authority, remains a major point of contention.
The other legal framework governing revenue sharing in the federation is Proclamation No. 1250/2021, titled ‘A System for the Determination of the Division of the Federal Subsidy and Joint Revenues.’ It establishes a mechanism for fiscal decentralization and revenue sharing between the federal government and regional states.
The Proclamation outlines only general principles, criteria, and processes for sharing concurrent (joint) revenues, including those from natural resources—without specifying numerical percentages.
A Fresh Test for Federalism
Experts believe Ethiopia’s current situation offers a chance to redefine its energy wealth management and establish inclusive federalism. They argue the solution begins with legal and institutional clarity.
The Somali region’s gas awakening arrives at a time when the federal government faces pressure to revive an economy hit by inflation and foreign currency shortages, while managing ethnic tensions and political polarization. The gas project, if handled well, could serve as a unifying national success story—a model of shared prosperity under federalism.
But if handled poorly, it could deepen the very divides it seeks to heal.
“Ethiopia needs a natural resource governance proclamation that defines ownership, consultation, benefit sharing, and dispute resolution,” Mohammed said. “Without that, we’ll keep repeating the same mistakes—whether it’s in the Somali region, Benishangul-Gumuz, or Oromia.”
He proposes establishing an independent resource management authority tasked with transparency, auditing, and community engagement.
“Let resource data be public. Publish the product volumes, export values, and tax revenues. Transparency turns tension into cooperation,” said the expert.
Kamaludin, meanwhile, envisions a more community-centered approach. He advocates for a Somali Resource Governance Authority (SRGA)—a regional body that would co-manage local projects, enforce community consultation, and ensure that a share of gas revenue is invested in education, health, and infrastructure.
Mohammed believes it is about relationships—between the center and the regions; the government and citizens.
“If we get that relationship wrong, no gas field can fix it,” he warned.
Regarding how the strategic “hinterland” of the Somali region legacy shapes dynamics, Kamaludin said, “It entrenches distrust, clan rivalries, and conflict risks, the whole Somali society is feeling dismayed and deceived by the lack of consultation about their own resources.”
Globally, natural resource abundance presents two opposing realities—a curse or a blessing—depending entirely on governance. Many African countries continue to exemplify the resource curse, while countries like Norway demonstrate the blessing.
Mismanagement has led to the resource curse in various African nations, characterized by abundant natural resources but with lower economic growth and democracy. On the other hand, Norwegian petroleum production, for example, has added approximately USD 2.01 trillion to the country’s GDP over the past fifty years and now contributes more than a fifth of its total value creation.
Kamaludin argues that emulating Botswana’s Sovereign Wealth Funds (SWFs) is essential for diversified, transparent devolution. Such a move would help transform resources from a curse into communal empowerment, thereby honoring federalism’s promise and preventing endless central plunder.
“Such demands apply to all regions, not only Somali. This is how we overcome the traditional distrust between the center and the periphery, develop our resources for common prosperity, and close the door to armed insurgents that have become the preferred way of solving our internal power conflicts,” said Kalamudin.
