Oil Corruption May Threaten Angola, Nigeria, Stifling Growth, Agency Says
Nigeria and Angola, Africa’s biggest oil producers, have granted stakes in oil fields to companies that may be acting as fronts for government officials, stifling development in both countries, according to anti-corruption group Global Witness.
While increased oil output has generated billions of dollars for Angola and Nigeria, the misappropriation of public funds by corrupt officials remains one of the main causes of poverty in those countries, the London-based organization said today in an e-mailed report.
“Too often private ‘shell’ companies with opaque ownership structures are awarded lucrative concessions, with little information available as to who the beneficial owners of the company are,” Global Witness said.
Angola and Nigeria have said they’re making progress in fighting corruption and improving oil-industry transparency to attract foreign investors fleeing Europe’s debt crisis. Nigeria is Africa’s top oil producer, pumping about 2.14 million barrels a day last month, according to data compiled by Bloomberg, while Angola’s output was almost 1.79 million barrels a day.
Angola, which is in the final stage of a $1.4 billion loan program with the International Monetary Fund, has made more information on oil finances available, Global Witness said. While Nigeria has also adopted measures to bolster transparency in the oil industry, both countries need to do more to fight corruption, it said.
“It is known that the oil sector in these countries has been used to create a national bourgeoisie,” Alves da Rocha, an economics professor at Angola’s Catholic University, said in a telephone interview today. “It is a bourgeoisie created on the basis of favors by the state and not on merit.”
In Angola, for example, the owners of Sociedade de Hidrocarbonetos de Angola (SHA), a private company that pre- qualified for an oil license tender in 2007 that was later suspended, had the same names as senior Angolan government officials, Global Witness said.
Joao Rosa Santos, a spokesman for Angolan state-owned oil company Sonangol EP, which grants oil licenses, didn’t answer three calls to his mobile phone seeking comment. SHA General Manager Marques Carreira said there was nothing illegal about his company’s shareholders or the 2007 oil license tender.
“In Angola, a member of government can be a shareholder in a private company as long as he doesn’t have an executive role in that company,” Carreira said in a phone interview from Luanda, the Angolan capital. “Global Witness should mind its own business.”
Global Witness also reported that a private Angolan company called Grupo Gema obtained a small stake in an oil license at the time when it had two shareholders with the same names as government officials. Jose Leitao, president of Grupo Gema, did not return two calls to his company in Luanda seeking comment.
In Nigeria, the owner of a company that bid for a share in oil contracts in 2005 may have been the senator chairing a committee that oversaw the upstream oil industry in that country, Global Witness said.
Levi Ajuonuma, a spokesman for state-owned Nigeria National Petroleum Corp., didn’t answer three phone calls seeking comment on the report.
Global Witness also cited examples of lack of transparency in the Democratic Republic of Congo’s oil and mining sectors. A “resource curse” in Angola, Nigeria and Congo has stifled development, it said.
About 70 percent of Angolans and 80 percent of Nigerians live on less than $2 a day, while one in five children in the Democratic Republic of Congo dies before its fifth birthday and more than half the population lives on less than $1.25 a day, according to Global Witness.
“African countries with mineral resources have too long been held back from prosperity by a baleful history of collusion between corrupt and incompetent rulers,” the organization said. “More transparency would ensure a more open competition and one that is fairer to countries and their citizens.”
Angola and the Democratic Republic of Congo both placed 168th out of 182 country rankings in a global Corruption Perceptions Index released in December by Transparency International, the Berlin-based anti-graft watchdog. Nigeria’s ranking was 143.
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