How corruption holds back Africa's oil industry

Moyiga Nduru:

Corruption is costing Africa's oil industry billions of dollars annually, says Peter Eigen, founder and chairperson of Transparency International (TI) -- a non-governmental group based in Berlin that monitors and fights graft.

He made the comment to journalists on Friday at a gathering organised by TI South Africa in Johannesburg. Eigen was in the country to attend the 18th World Petroleum Congress, a five-day meeting held in Johannesburg that attracted more than 4 000 delegates.

Oil-rich Angola, Chad, Libya, Nigeria and Sudan all fared poorly on TI's corruption perceptions index for last year. This annual rating ranks various states according on the extent to which graft is viewed as having taken hold there.

In these countries, public contracting in the oil sector is plagued by revenues vanishing into the pockets of local officials, middlemen and foreign oil executives, says TI.

"The sector is rife with corruption, non-transparency and maladministration, especially in countries in transition and post-war economies," the group noted in a statement issued this week.

Added Eigen: "Oil-producing countries are some of the most corrupt and most miserable in the world."

He singled out Equatorial Guinea, which began exporting oil in 1991, for particular criticism.

"Equatorial Guinea, with a population of about 521 000, should be the richest, with everybody driving a Mercedes," noted Eigen.

But officials in this West African country -- with oil reserves estimated at 1,28-billion barrels -- are corrupt, he said.

Similar allegations of graft plague Nigeria, where late dictator Sani Abacha is reported to have stolen $2,2-billion between 1993 and 1998. Some of this money was banked in Switzerland, which has returned $290-million of the looted funds to Nigeria. Another $168-million is expected to be transferred in the coming months.

Swiss authorities had wanted the World Bank to monitor the repatriated funds, to ensure that they did not get siphoned off yet again by corrupt officials -- even suggesting that the money should go directly to education, health and infrastructure projects.

While the bank declined to do this, it is clear that oil money has not trickled down to the ordinary citizens of Nigeria. As Eigen pointed out, the Ogoni people in the Niger delta, where the bulk of Nigeria's oil is produced, live in abject poverty.

Anti-Corruption Initiatives Aimed At African Petroleum Industry