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Last Updated: Tuesday, 9 March, 2004, 14:31 GMT
Who benefits from Africa's oil?
Antony Goldman
Africa Analyst, Clearwater Research Services

Angolan children
Angola and Nigeria are among the poorest countries in the world
There are five countries in sub-Saharan Africa that produce substantial quantities of oil: Nigeria, Angola, Gabon, Equatorial Guinea and Congo-Brazzaville.

While Angola and Congo are now slowly emerging from devastating civil wars, Nigeria is regularly ranked in the top two most corrupt countries in the world.

Despite earning over $100m a day from oil exports, Nigeria and Angola are ranked among the 30 poorest countries in the world.

Oil has rarely helped promote peace, progress or prosperity in Africa.

Debate rages as to why this should be so and what should be different. It is a debate that is set to sharpen.

Community relations

Oil companies for many years were reluctant openly to join the debate. They maintained that their obligations were governed by the terms of their contracts and the interests of their shareholders.

Oil is a gift which we have allowed to become a curse.
Neil Gall, Edinburgh

Their responsibility was to produce oil as effectively as possible. It was up to governments to govern.

It is a position that has shifted quite sharply over the past decade.

Royal Dutch/Shell, the Anglo-Dutch multinational, was at the centre of the storm following the execution of Nigerian writer and minority rights activist, Ken Saro-Wiwa, in 1995 by a military regime anxious to stem mounting anger in oil producing areas over perceived marginalisation.

The company now invests heavily in community relations and environmental projects, part of a policy of working to promote stability in the local operating environment.

Social responsibility

In Sao Tome, aspiring partners are preparing health and education programmes as part of a broad-based corporate social responsibility initiative.

Shell station
Shell now invests in community and environmental projects

Critics maintain the process is still far too modest, with companies devoting only a tiny portion of their profits towards development - in a region where taxes and royalties are far less than the Middle East or South America.

But an equally valid question to ask is where the money the producing countries have received has gone.

Nigeria has earned around $400bn from oil since 1970. A Nigerian friend returning home after 15 years abroad asked where the war had been - so run down and dilapidated had the country become.

And yet Nigerians own some of the finest properties in the world's best cities, and swell some of the world's biggest bank accounts.

Future generations

An ongoing criminal investigation in the US shows that even in Equatorial Guinea, where oil was only discovered in 1991, the president has $700m in a US bank account.

Oil refinery
There is rising demand for Africa's oil
In countries as different as Norway and Brunei, oil has proved the foundation not only for great individual wealth, but also for tremendous social gains.

Gabon has made some progress in this direction - but the oil there is running out, and little has been invested in helping to create a diversified post-oil economy.

Elsewhere, where oil has been of benefit mostly to members of a tiny elite and the companies that have worked with them, the challenge remains to find a system and form of partnership in which wealth is better shared - not only more broadly within the population, but with future generations.


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