Dispute Over Ownership Of Lake Nyasa - How A Colonial Treaty Can Impact Today's Investor

The Great Lakes region has been the subject of border disputes both prior to and following the independence of East African countries during the 1960s. It is important for international investors to understand the history and context of the region and the potential for disputes when assessing their concessionary rights.

Lake Kivu, which lies between Rwanda and Democratic Republic of Congo, provides an example of the tensions which can arise between states over natural resources in the region though a dispute over demarcating the methane-rich lake (exacerbated by wider geopolitical issues) has now been resolved. Rwanda has since harnessed the lake's naturally high methane content (which has caused several well documented explosions) and closed the Kivu Watt Project, an innovative development sponsored by Contour Global involving a floating barge extracting methane from the lake for power generation.

Another case which may not be resolved easily is the on-going dispute between Malawi and Tanzania over Lake Nyasa. Malawi, one of Africa's poorest nations, has an opportunity to exploit natural resources contained in the lake which sits on the border between the two nations. Malawi claims the whole of Lake Nyasa while Tanzania claims 50% of the lake and its resources.

Malawi's claim is based on the Anglo-German Agreement signed on 1 July 1890 (Agreement). Tanzania has also cited the Agreement as the basis of its claim.

The Agreement temporarily settled colonial disputes between Germany and Great Britain and also included an agreement for Great Britain to cede Heligoland, an island off the coast of Schleswig-Holstein in the North Sea to Germany. Once Tanzania and Malawi had gained independence, much of the demarcation of their border was based on information in the Agreement.

The main issue in contention is drafting at Article I of the Agreement:

Article I (2):

In East Africa, Germany's sphere of influence is demarcated thus:

To the south by the line that starts on the coast of the northern border of Mozambique Province and follows the course of the Rovuma River to the point where the Messinge flows into the Rovuma. From here the line runs westwards on the parallel of latitude to the shore of Lake Nyasa.

It is the final line of these provisions which creates the uncertainty, with Malawi claiming that Tanzania's traditional border is at the shore of Lake Nyasa. Tanzania however contends that its border goes half way...