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Africa’s oil boom benefiting all too few

by Cesar Chelala

NEW YORK — Since the mid-1990s, several countries in sub-Saharan Africa — Nigeria, Angola, Gabon and Equatorial Guinea — have experienced strong revenue growth from the petroleum industry. In most cases, this new wealth is not being directed toward the countries’ economic development or toward improved living standards for citizens. Rather, it has been used almost exclusively to enrich the countries’ leaders. As a consequence, most of the population remains poor and unprotected.

With more than 4 million barrels of oil produced daily, sub-Saharan Africa’s production surpasses that of Iran, Venezuela and Mexico put together, and the region has the potential to become as important a crude-oil resource as Russia or the Caspian Sea. The area has the additional advantage of being more politically stable than the Middle East, at least at this time.

According to estimates from the National Intelligence Council in the United States, sub-Saharan Africa could fill up to 25 percent of U.S. fossil-fuel needs in 2015, compared to 16 percent now. In addition, the Gulf of Guinea, which extends from Nigeria to Angola, could become the first producer of deep-water offshore oil in the world.

One of the most significant discoveries of oil reserves has been in Equatorial Guinea, a former Spanish colony in West Africa. The country provides a notable case of misuse of its new wealth. When oil was found in the country in 1996, Equatorial Guinea was one of the poorest countries in the world. Today, this small and sparsely populated country of 465,000 inhabitants has an offshore production of 350,000 barrels a day, making it the third-largest sub-Saharan producer of petroleum products, behind Nigeria and Angola.

According to the African Development Bank, a year after oil was found in the country the GDP went up 76 percent. What is more remarkable, though, is not the size of the revenue increase but how little of it has been shared with the population, either directly or through improved health and social services. At the same time, while oil production has continually increased, production of traditional exports such as coffee and cacao has dramatically declined.

I recently went to Equatorial Guinea, for my first visit since 1993, which was before the oil boom started. More than a decade had passed and I was unable to see any improvements in the living standards of ordinary people. Malaria is still rampant and is the main cause of death among children under five, and child morbidity and mortality rates have not experienced any significant improvement in the last several years.

More than 70 percent of the population lives below the poverty line, and the majority of those living in the largest cities lack access to safe drinking water and sanitation services. The immunization rate for the most prevalent diseases is relatively low, making children prone to diseases that could be easily preventable by vaccination. Almost one in five children under five are malnourished, and just shy of one in 20 are severely so.

At the same time, maternal mortality rates, which are a reliable measure of health coverage and the quality of health services, remain very high.

Most of the country’s primary and secondary schools don’t support basic conditions for children’s education. Sixty percent of schools in the country don’t have potable water, and 50 percent don’t have toilet facilities, especially for girls. As a result, there is a high rate of school dropouts and class repetition. In some schools, there are up to 96 students per room.

A similar situation is occurring in Angola. According to two nongovernmental organizations, Human Rights Watch and Global Witness, between 1997 and 2002 more than $4 billion has disappeared from the state budget. While Angola’s president, Jose Eduardo dos Santos, has become one of the world’s 50 richest people, most of Angola’s population lives in misery and sectors of the population are ravaged by the HIV/AIDS pandemic.

In 2002, a world coalition of 130 nongovernmental organizations launched a campaign called “Publish what you pay.” This initiative demands that international companies involved in oil, gas or mines’ exploration make public all their payments to the governments involved, an important and necessary step.

A new experience in Chad could be useful. This country, which is expected to receive more than $2 billion in oil revenues in the next 20 years, is committed to spending 80 percent of its new earnings in schools, clinics, roads and to fulfill other basic needs. Most of the money is held by the World Bank in a London account, and a citizens’ committee overseas its expenditures.

This could be a new model to be followed by other oil-rich African countries. But still the main responsibility for their people’s welfare lies in the government leaders themselves. It is up to them to make of the oil boom in their countries a blessing or a curse.