17 June 2008

GPPi Fellow publishes article in BBC Focus on Africa magazine

GPPi Fellow Ricardo Soares de Oliveira published an article with the BBC’s quarterly magazine, Focus on Africa. The article entitled, “Skimming the Surface,” looks at the African continent five years into its second oil boom and assesses who will be reaping the profits of the continents oil exporting bonanza.

At quick look at the global oil prices would suggest oil exporting countries to be flooded with revenue stemming from the commodity’s sales. Indeed that is what the GDP of oil states like Nigeria, Angola, Chad and others reflect. But is this influx of cash really good news for the continent? In this article Soares de Oliveira raises this question and suggests the oil revenue gained by the African countries may run the risk of being spent foolishly as it did the first time around three decades ago during the first oil boom.

Drawing lessons from Africa’s oil economy in the 1970’s, Soares de Oliveira suggests that African oil producers could once again fail to spread the benefits and plant the seeds of a the current oil boom. Modest measures have been taken by oil companies to increase transparency and accountability of their profits under the auspices of the Extractive Industries Transparency Initiative (EITI) to address the issues. Nonetheless, according to the Human Development Index and the Transparency International (corruption perception index) Africa’s oil producers continue to rank amongst the world’s worst performers, and they carry a dismal record of both social spending and provisions of public goods. Soares de Oliveira attests that bad governance, lack of progressive vision and long term planning by those who run oil states, corruption, abuse of public office for private means, and at times plain theft are all reasons suggesting that oil producing states in Africa will most likely fail their responsibilities towards the citizens once again.

Soares de Oliveira points out that the issue lies not only with the politics within the oil states in Africa, but also involves foreign oil companies that support the region’s most oppressive regimes. Culpable too are international banks that launder profits made from oil trade back to oil-rich African incumbents and the oil importing states that support them with political and military support. According to Soares de Oliveira, this vicious circle present in the 1970’s oil economy of Africa seems likely to reproduce itself the second time around. Like before, neither the Africa’s oil producing states nor the international oil companies seem to rank the prosperity of local Africans as a top priority.

To read the full article, please click here.

For more information please contact Ricardo Soares de Oliveira.

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