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Oil Brings Revenue, Problems to Africa


Africa's share of the world's lucrative oil market is big and growing bigger. But for many people in Africa's oil-producing countries, increased oil output has only brought continued poverty and more violence. VOA's Kent Klein reports from Washington on the so-called "oil curse."

Africa is home to 10 percent of the world's oil reserves, and wells in Africa and off its shores produce an estimated six million barrels of oil a day.

The world's biggest oil-consuming nation, the United States, gets between 10 and 20 percent of its oil imports from West Africa, and that percentage is growing. Angola is already the biggest supplier of crude oil to China, the world's second-largest and fastest-growing oil buyer.

Angola recently surpassed Nigeria as Africa's largest oil-producing country, and Equatorial Guinea, Gabon, Sudan, Congo-Brazzaville and other countries have growing oil industries.

But the revenue from Africa's booming oil sales rarely reaches the people who live where the oil is produced.

This phenomenon is sometimes called the "oil curse." John Ghazvinian toured Africa's major oil-producing countries and has written a book about it, titled Untapped: The Scramble For Africa's Oil. He says Nigeria and other African countries that have discovered oil have actually done worse economically and politically than those that have not.

"You have some of the world's most state-of-the-art technology existing side-by-side with little mud and straw villages where they have no running water or electricity or anything," he noted. "Over the years people have grown extremely frustrated seeing billions of dollars flowing into the coffers of either oil companies or the national government in Abuja, and feeling that 'This is our oil, this is our land.'"

In Nigeria's oil-producing city of Port Harcourt, Ibiba don Pedro, the managing editor of The National Point newspaper, says environmental damage from the oil operations has brought economic ruin for some farmers and fishermen.

"The people who own the land, who live on the land and who used to fish in the rivers do not get any benefit out of the oil, and then their life support systems are being destroyed," explained don Pedro.

The economic damage from the oil boom also comes in the form of a higher cost of living, according to Nicholas Shaxson, author of Poisoned Wells: The Dirty Politics of African Oil.

"When so much money comes into an economy, price levels of everything rise very high, and that makes local sectors like agriculture or manufacturing uncompetitive against imported goods," he said. "The price of what is produced locally becomes much, much higher relative to imports."

The influx of money into the local and national economies also create a fertile atmosphere for corruption. John Ghazvinian says corruption is a major factor in the "oil curse" in many African countries.

"Billions, literally billions of dollars have just disappeared without any real trace or any real way of following the money," he added. "This happened in Nigeria, in the last years of the military government. It continues now in Nigeria, on a different scale, in different ways. It happened in Angola, in the last few years of the civil war, where $4 billion of oil money was never accounted for."

Journalist Will Connors, who has been reporting on Nigeria's oil conflicts, says a culture of corruption is difficult to impossible to reverse, especially in Nigeria, where he says it is found at all levels of government.

"If they truly wanted to, they could change things, but the corruption is so endemic that if they ousted one governor or senator or army general who was siphoning money off the top, then another would be right behind to take his place," he explained.

In some parts of Africa, the resentment and anger over the unequal distribution of oil money have led to violence. Countries where the oil production is offshore have largely avoided bloodshed. But in Nigeria's heavily-populated Niger Delta oil-producing area, organized attacks on petroleum workers and facilities have been taking place for years. Groups like MEND (Movement for the Emancipation of the Niger Delta) say they are launching the attacks for the benefit of the people of the Delta, but Nigerian newspaper editor Ibiba don Pedro is skeptical.

"There are too many businessmen in the area making a lot of noise and making a lot of threats, and that's my only assessment of what is going on," he added.

The experts in this report agree that the oil companies doing business in Africa have improved the transparency of their operations, and that the new Nigerian government is making moves in that direction. And they say lifting the veil of secrecy is one important step toward lifting the "oil curse."

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