Fri, Feb 25, 2011 - Page 9 News List

Modern scramble for Africa must seek to tackle corruption

European governments need to force businesses to be transparent if Africa’s poor are to benefit from the riches of the continent’s natural resources

By Larry Elliott  /  The Guardian, LONDON

Income per head in Equatorial Guinea is more than US$30,000 a year. No, that’s not a misprint. On average, incomes in the west African country are as high as they are in Italy or Spain.

Equatorial Guinea is also mired in poverty. Most of its citizens live on less than US$1 a day and its infant mortality rate is the fourth worst in the world. The average per capita income, in other words, disguises the fact that a tiny elite is stupendously rich, while the rest of the population struggles to survive.

What’s more, the explanation for this disparity is simple. It can be explained in two words: oil and corruption. Teodoro Nguema Obiang is officially the forestry and agriculture minister of Equatorial Guinea on a salary of US$4,000 a year, but has a US$35 million home on Malibu Beach in California. Obiang is tipped to be the country’s next president when his father dies.

For too long, governments in the West turned a blind eye to what was going on in countries like Equatorial Guinea, just as they kept quiet about the millions being salted away by former Egyptian president Hosni Mubarak and former Tunisian president Zine al-Abidine Ben Ali. The basic principle adopted has been drearily familiar: “He’s a son of a bitch but at least he’s our son of a bitch.”

However, recent events in Cairo and Tunis have exposed the folly of this approach. The causes of the popular unrest in north Africa and the Middle East are many, yet it is clear that one factor has been disgust at the obscene levels of corruption.

In theory, a clean-up plan for global politics is in train. Last November, the G20 group of developed and developing countries agreed an anti-corruption action plan, designed to promote the rule of law, prevent funds being illegally transferred to Western banks, protect whistleblowers and make financial systems trustworthy and transparent.

It is important this action plan is implemented because the stakes — both political and economic — are high. Africa, for example, is the world’s poorest continent but is rich in natural resources. It has 10 percent of the world’s oil reserves, 40 percent of its gold and more than 80 percent of chromium and aluminium. This buried treasure could be a blessing or a curse: it has the potential to accelerate development if used properly, but it could also prompt a fresh wave of murky deals between corporate executives and corrupt officials. Already, one-in-four oil dollars from Angola goes missing, while Nigeria’s own corruption agency estimates that up to US$400 billion of oil money has been filched or wasted in the past 50 years.

This is happening at a time when austerity programs in the West are making international aid a much tougher sell. In the UK, development assistance is one of only two budgets, along with health, ringfenced from spending cuts — though British Development Secretary Andrew Mitchell is aware that he has to prove to skeptical voters that he is getting value for money.

“Achieving transparency in the exploitation of mineral resources is one of the most fundamental aspects of development,” Mitchell said last year. “If our taxpayers are supporting poverty reduction strategies in countries with significant resources interests that are not being used in the people’s interest, that will bring our use of taxpayers’ money into massive disrepute.”

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