Africa’s Rich Oil: From Blessing to a Curse of Rampant Corruption and Bad Governance on the Continent?
The African continent in recent years has come to be major Geo-strategic importance to the oil-dependent industrialized economies and giving attention that Africa receives from state actors on the global stage in the context of international politics, the idea of an African rebirth seems to be finding more and more acceptance within the contemporary global politics. This is due to the continent cherished and rich oil and other riches but had this new love for Africa developed by Beijing and Washington nowadays produces any benefits for the continent’s larger impoverished inhabitants and eliminates the curse of rampant corruption and bad governance or only benefit foreign capitalists, corrupt political bureaucrats, and heads of governments?
By Josephus Moses Gray, Contributor, [email protected], (231)-776824437
Let me quote the words of former President Ellen Johnson-Sirleaf of Liberia: “Africa is not poor; it is poorly managed”. Conflicts and crises such as civil strife have affected governance in Africa as well as the establishment of sustainable growth performance. Although some countries have recovered from civil wars, good governance remains a challenge. This includes boosting national capacity to avoid crises in governance, maintaining good internal relationship and peace building, as well as reinforcement of issues regarding national security reducing and crime.
In the post-independence eras, African states became weak pawns in the world economy, subject to Cold War rivalries, their path to development largely blocked by their debilitating colonial past. More recently, the West has choked Africa with an onerous debt regime, forcing many nations to pay more in interest on debts to the World Bank and International Monetary Fund (IMF) than on health care, education, infrastructure, and other vital services combined.
The development landscape in Africa is changing, with new partners from the global South taking on a more important role as providers of much needed socio-economic growth and know-how for Africa’s development. China has been the most prominent emerging partner and Chinese entrepreneurs have increased their trade and investment relations with African counterparts by a factor of more than ten over the past decade.
But the pool of actors has widened and Europe and Washington are no longer at ease. China’s robust economic growth in the past 30 years, which has lifted 600 million people out of extreme poverty, offers lessons for other regions, especially Africa to pay keen attention. China and Africa “have always belonged to a community of shared values and fruitful future” and “have always been good friends who stand together through thick and thin, good partners who share weal and woe, and good brothers who fully trust each other despite changes in the international landscape.
“This might sound ridiculous”, but it is a glimpsing fact that oil’s curse can be avoidable and turn into fruitful and praiseworthy blessings, but the saddest nightmare always plagues dozen of oil-rich African states that mismanaged their resources that generate most needed wealth; since oil resource often in many instances fostered corruption, benefits and profoundly serves foreign capitalists and corrupt leaders’ deep-seated interests to the displeasure of the largest society, thereby restricting bulk of the population to abject poor and inhumane sufferings.
Africa has long proclaimed its desire to industrialize its economy in an effort to attain higher living standards and increase productive including employment opportunities for its populace but the rush for the continent’s cherished riches especially oil remain the one of the major causes for a civil war on the continent which leads to abject poverty and suffering.
In many of Africa’s most oil-rich countries such as Nigeria, Angola, Libya, Southern Sudan, the Republic of Congo, Gabon, and Equatorial Guinea, oil, instead of being a blessing for the population, it becomes a curse and produces corruption as an endemic debacle. Oil discovery in Africa automatically leads to corruption menace which gives birth to doom and gloom-driven poverty.
In some continents the situation is to the contrary, oil is a blessing and not a curse, it removes the people from poverty to better their livelihoods; let’s look at the case of North America that produces more oil than Africa, has the lowest resource rents as a share of GDP and has good governance ratings. According to US Department of Energy, Canada as one of the top ten world oil producers, has one of the least corrupt governments in the world, on the other hand, Norway is one of the top ten exporters of crude oil in the world, while maintaining its stature as a perennial leader of the United Nations Human Development Index.
In Africa, poor governance has led to poor economic growth and it is manifested through corruption, political instability, ineffective rule of laws and institutions. Some African countries went through governance failures and corruption at some point in time, but their governance capacity made them recover and ensure the maintenance of rapid growth performance through constant demands to improve government and reduce corruption
In many African countries, corruption takes place as a rule-based on decisions. That is, public officials influence the economic decision in detriment of the entire society. This results in inefficiency and high transaction costs as well as distortion of transparent and normal market operations and thus, creating insecurity for investors. Corruption takes place when public officials break the laws to fulfill their own interest. The most common types of corruption are bribery and extortion as well as the allocation of public resources to favor political benefits.
In most cases the African leaders try to run the country by copying the modern western state systems at domestic level and neglect the tradition and culture of their own people. The leadership in most African countries is centralized, thus, the local government does not have the power and authority to take any decision. Therefore, it hinders efficient the capacity of the local administrations.
Due to rampant corruption, African children do not have access to quality education which is required to let them gain knowledge and skills, to equip them to have better ideas and opportunities for employment. Other correlated problems as well, for example, lack of skills and strong policies, and that is the low economic performance with high inflation.
The ruling class in Africa many a times pleads ignorance of the fact that they are in power in order to be of service to the citizens and not vice versa; they exploit their positions to put as much public money as they can in their pockets and even get away with it! Unfortunately, most African countries have come to recognize corruption as a normal occurrence and often see it as a means to an end.
In 1999 the United Nations approximated that the ruling elites drained more than 250 billion dollars out of Africa each year in their private over sea back accounts in Europe where they have invested their ill-gotten gains and wealth stolen from their motherland. Africa continues to be poor because politics is considered an easy ticket to prosperity, to add to that the leadership has no continuity agenda and opt for dying in office, being some of the richest people in the world amidst the most poverty-stricken citizens in the world.
In this day and age corruption and bad leadership and corruption are killing Africa’s progress while the greater number of the continent’s population lives on less than one One United States Dalloes a day. The population in most cases is suppressed by their leaders, the autocratic means that keep these corrupt political bureaucrats in the hands of power.
Again, abject poverty and rampant corruption served as major obstacles to growth and development on the continent; with on the other hand gross human rights violations, injustices, disrespect for rule of law and order, misused of national resources and state wealth by autocrats and corrupt leaders and their families and friends, dishonest bureaucrats, foreign capitalists and the lack of proper democracy, are some of the problems responsible for the continent’s backwardness in the context of growth and development.
Governance has increasingly become a major instrument for successful growth performance and development purposes in the world. The government does not provide productive institutional framework to sustain good governance, transparency and accountability of its institutions. In many African countries, weak institutions do not secure the required long run sustainable growth. However, many African leaders are contented with a short term solution that imposes a long term cost to the nation.
From the 1950s to 2000s, Africa has experienced lots of assassinations either by coups d’etat or by civil naughty including political detentions, thus depriving Africa of the men and women who would perhaps have built a better future. Each assassination, each coup d’etat, each civil disobedient and each political exile dealt a blow to Africa. All these ugly activities are direct results of bad governances perhaps under the influences of foreign capitalists to plunge the continent into perpetual crises to enable the foreign powers indirectly loot Africa rich oil and other riches.
Africa is perceived mainly by the West as insignificance, but the continent’s oil and gas are among the few outstanding exceptions to the perceived insignificance of Africa by the West and other foreign capitalists.
Several big powers will soon depend on Africa for a quarter of its total crude oil imports, and Africa already accounts for more than a quarter of China’s oil imports today. In the words of the former chief executive of BP John Browne, unless geologists succeed in finding new and so far unidentified provinces, as consumers, we will all be dependent on supplies from just three areas West Africa, Russia and the Middle East. Dozens of research findings point to the fast that the People’s Republic of China and United States’ interests in Africa are complex, and many issues such as terrorism are high on the agenda. Africa is littered with fragile states.
Upcoming and existing oil-producing countries in Africa have been marred by coup attempts and poverty. In addition, the failure to share the revenues generated by natural resources such as oil in an equitable manner has created disenchanted and disillusioned within the young populations, which have provided a fertile ground for crisis and a haven for rebellions as evident of the ‘Arab Spring’, which rapidly propelled the destructions and demised of many leaders.
Accordingly, crude oil is one of the world’s most important strategic resources, and Africa has attracted a lot of attention among corporate and political decision-makers because of growing global oil demand.
Indeed, it has been suggested that Africa is experiencing a ‘New diplomatic race; thanks primarily to its oil and gas wealth, with the United States and the People’s Republic of China actively competing for access to Africa’s resources. China is currently Africa’s third most important trading partner, ahead of the United Kingdom and behind the United States and France.
In a world where both developed and developing countries require huge quantities of oil resources, Africa has once again become strategic for major actors in the international system. Strategic considerations related to Africa are, of course, influenced by global processes and rivalries, with China’s great power status having recently received particular attention.
China’s new style of diplomacy and its foreign policy principle of “non-interference” but one China policy have been characterized as sensitive to local conditions in Africa rather than imposing standards, as the case of the United States which imposes conditions such as human right, political and economic performance criteria for its foreign investment, aid assistances and support towards projects in Africa.
Unlike in other regions like Latin America and Europe where the United States maintains political influence, China on one hand maintains robust economic influence in Africa. The United States finds it difficult to outweigh China in its financial aid to African due to Beijing new “checkbook diplomacy” and aid to African governments and institutions, although the U.S. militarily out-spent China. In contrast and comparison, this subject looks at Washington and Beijing growing impact on the African continent in the context of influence and support to the continent. While it is difficult to draw out a definite conclusion, empirically China is posing great threat to the U.S. influence in Africa, except for other regions such as the Latin America, Asia and Middle East where U.S. commends greater respect.
China and the United States use tools of soft power in different ways and with varying effects. Since the mid-1990s, the PRC has adopted an increasingly active and pragmatic diplomatic approach in Africa that emphasizes complementary economic interests. China’s influence and image have been bolstered through its increasingly open and sophisticated diplomatic corps as well as through prominent PRC-funded infrastructure, public works, and economic investment projects in many African countries; Beijing have diplomatic missions in 49 African countries.
The U.S. international public image is gradually declining on the continent perhaps due to its foreign policies that remain unpopular abroad. The United States continues to exert global foreign aid leadership and maintain a major, and much appreciated, aid presence in Central Asia, Africa, the Middle East, and Latin America. U.S. foreign assistance to Southeast Asia has increased markedly since 2001, although most new funding has been directed at counter-terrorism.
The regions with the largest U.S. public diplomacy efforts in terms of funding are Europe/Eurasia and the Western Hemisphere (Latin America and the Carribean). Likewise, the U.S. International Military Education and Training (IMET) program seeks to promote democratic values, mutual understanding, and professional and personal relationships in addition to military capacity.
Many aspects of U.S. social, economic, cultural, academic, technological, and other forms of influence, much of which emanate from the private sector or outside the scope of government, remain unmatched in the world. Many American ideals have long-term, universal appeal, while the United States continues to be a magnet for immigrants and foreign students. Despite a perceived lack of attention among elites, the United States has maintained favorable public image ratings in many African and Latin American countries as well as in the Philippines, a U.S. ally.
The United States and China share the same vital national interests of security and prosperity, although each has a particular additional interest and each defines its interests somewhat differently. Each seeks freedom from fear and want and to preserve its territorial integrity. For the United States, its particular interest lies in value preservation and projection of those values.
China has thus made in-roads into the oil sectors in Nigeria (Africa’s largest oil producer) and Angola (Africa’s second largest producer), which accounts for “13 per cent of China’s crude oil imports”. Other African countries with Chinese oil interests include Gabon, Mauritania, Niger, Equatorial Guinea, Algeria, Liberia, Ghana, Southern Sudan and Chad.
US oil interests are locked into major oil producers such as Nigeria, Angola, Algeria, Gabon, and the “new oil boom states” Chad, Equatorial Guinea, and Sao Tome and Principe. Since most of the oil being discovered is off-shore, it also has the added advantage of being beyond the reach of protesting oil communities on land that are capable of disrupting the oil flow, as had been the case in the restive Nigerian oil-rich Niger Delta since the 1990’s (Obi 2006a: 93-94).
It is fair to argue that the African continent has not traditionally been at the center of the United States of America (USA) foreign policy. Historical links between the U.S. and African countries date back centuries, but significant change in both relations has been the growing concern about the hunt for resources and terrorist activities on the continent, particularly in the Horn of Africa and the Sahel regions.
The United States recent re-engaging with the continent indicates that Africa does occupy a central place in US global foreign policy strategy. The US is the world’s largest development aid donor and has programs dedicated to Africa with billions of dollars being spent in various sectors on the continent. The Sino-African oil relationship can become complex due to other linked areas of concern. Oil, as part of China’s desire to acquire more natural resources, has brought criticism of China’s “neo-colonialist” presence in Africa, and questions whether China’s presence benefits governance and the African people.
China and Africa have since then become all-weather friends that understand, support and help each other. Fifty-one of the continent’s fifty-four countries have established diplomatic ties with China thus far, the most recent being South Sudan in 2011 while most western analysts believe that the main driving force behind China’s investment in Africa is for natural resources and thus focuses on a few resources’ rich countries.
China is currently the second-largest consumer of oil in the world, and more than half of its crude oil is imported and by 2020, official sources estimate that China will import about 65 percent of its crude oil China’s presence in Africa, According to Shelly Zhao briefing paper April 2011, to secure oil resources has been increasing. The study of international relations has historically focused on the activities of large, powerful states, dismissing the smaller entities of the international system as unimportant or merely objects of policy for the larger entities.
This truism extends especially to those entities that exist in a partially recognized limbo, neither a full part of the international system nor an ungoverned space. Yet in the post-Cold War world, following the dissolution of large multi-national states such as the USSR, these entities have begun to proliferate, such is the case of Moscow in Ukraine and Syrian’s brutal civil crises.
This proliferation provides a significant challenge to an international system in which the primary participants are states, and to the institutions created to oversee their interaction for world peace.
This new race for Africa’s resources is already engendering conflicts across the region. By analyzing the likely impact on the economies of oil-producing states, it considers whether we should dismay or rejoice over the ‘New Scramble for Africa’. It concludes that the existence of a New Scramble or a US–Chinese race for Africa should be treated with some caution, while the economic impact of oil investments is likely to be bleak.
Both the American and the Chinese Governments were important in paving the way for American and Chinese oil interests in expanding in Africa. The US Government used diplomatic instruments such economic incentives and military aid. China has proven more supportive and has provided loans, debt relief, scholarships, training, and provision of military hardware without political or economic pre-conditions, in exchange for a foothold in the oil business.
In turn, incumbent African leaders have identified Chinese unconditional financial resources, cheap products, and know-how as an important tool to fend off pressure for political and economic reforms from international organizations such as the International Monetary Fund (IMF), the World Bank and Western governments. China is the new superstar on the African continent when it comes to new diplomatic ties, trade expansion and investments in large-scale development projects.
In the Democratic Republic of Congo, where copper and diamonds have inspired wars and mayhem, there is currently intense competition and militia rivalries over the mining and sale, a critical raw material used in mobile phones and electronic devices. The battle over uranium, used in feeding nuclear reactors, continues to be at the root of conflicts in Niger. The connection between conflict and foreign exploitation of mineral resources can be drawn with respect to other countries, including Nigeria, Sudan, Cote D’Ivoire, Liberia, Libya, Namibia, and Zimbabwe.
For African governments, China’s new interest mostly has been a blessing. Diplomatically, their dependence on Western countries is eased, allowing new diplomatic competition as in the Cold War era, and giving pariah leaders an alternative backing. Chinese aid funds are also popular, because Beijing asks no questions on good governance and is fond of prestigious grand projects.
Economically, however, the Chinese advance has come with mixed blessings for Africa. With China’s admittance to the World Trade Organization (WTO), it has boomed into an economic superpower of cheap mass produced exports, giving no room for African competition. But Beijing is not only interested in gaining African export markets. The economic superpower is not endowed with many natural resources, making Beijing dependent on mass imports of crude materials.
Most importantly, there is evidence of greater involvement of the United States and China in Africa, in terms of both commercial interests and political engagement. “China’s bilateralism in relation to Africa” could undermine regional and continental institutions as “it replays the colonialist divide and conquer tactics.” Wars need money.
From Liberia to Sierra Leone, Angola to Nigeria, natural resources such as oil, timber, diamonds and minerals have helped fund armies and militias who murder, rape and commit other human rights abuses against civilians. Currently, there is an amazing infrastructure race taking place within East Africa, helping to reduce investment risk within the region. We see East Asian powers providing infrastructure in order to gain a competitive advantage in these regions.
China is taking a very broad approach and accessing the region whole heartily. We are also seeing Japan’s involvement, and the US through Anadarko’s involvement in Mozambique. Infrastructure is being built for mining and mineral interests, and hydrocarbons are taking a secondary spot. This will provide energy companies with an opportunity to wait for infrastructure to develop. This fact increases a company’s incentive to be a little less aggressive in terms of entering and building infrastructure specifically for energy.
Battling to overcome its own created problems such as bad governance, Africa throughout the Cold War until the mid-2000s, played only an insignificant role on the world’s stage in the context of international relations and diplomacy. This is not to say that Africa was irrelevant but the developments of the Cold War somewhat overshadowed the continent on the global stage. During the Cold War period, most of Africa remained within the spheres of influence of the former colonial powers, which made use of the relative freedom they were given by the Great Powers to materialize their interests in Africa, but with the end of the Cold War, things somehow turned the other way in the interest of the continent.
Africa’s recent advancement on the world’s stage has sparked out neurons calls for the continent to occupy a seat on the Security Council with an equal veto, but the question that arises is which of the three African countries to occupy the dedicated seat? Nigeria, South Africa and Morocco are all vying and not ready to allow either one of the three to represent Africa if the occasion arises. The continent in recent time has been repositioning in the international system as far as international relations and politics are concerned, but greed for power and wealth, and bad governances are some of the major problems that are affecting the continent.
According to UN’s report, eighty-five percent of Africans have no access to standard pipe borne water, good healthcare delivery system, electricity, social security benefits, sanitation facilities and good meals a day. The report further indicates that 25.8 million people of the two-thirds of the total world population suffering from HIV/AIDS live in Africa. Africa remains a continent abundant in human and natural resources, but are managed to enrich only a handful of African leaders, corrupt bureaucrats, certain individuals and foreign capitalists who continue to exploit the continent.
Nowadays more than ever, as Jean-François Bayart wrote rather provocatively a decade ago, the ‘discourse on Africa’s marginality is baloney. The economic, demographic, and political developments on the African continent suggest that Africa is moving away from the periphery of the international system, not without consequences for the traditional international actors in the region. But farsighted political figures, also agreed that Africa has entered a new phase of history, which is characterized by increased African actors on the world stage, with greater influences.
Considering Africa’s economic apathy and development gape, the construction of a community of shared future for mankind entails instituting the right policy at the right time by the right people at the right place, while those at the helm of leadership on the continent must be proactive not reactive and worse of all passive; in paying keen attention to innovations, industrialization and sound economic policy will lead to growth and prosperity on the continent.
About the Author: Josephus Moses Gbala-hinnih Gray, PhD, is an Assistant Professor at the University of Liberia Graduate Studies Program. He is a native born Liberian, hails from the Southeastern village of Kayken Chiefdom in Barclayville, Grand Kru County. He is an author, professor, journalist, diplomat and scholar with a wealth of rich credentials including a doctorate in International Relations and Foreign Policy Studies from Paris, France. He has authored two books, published Two Graduate Theses and a 600-page Doctoral Dissertation on the theme: “Geopolitics of African Oil and Energy: China and America New Strategic Interests in Africa”. He has written extensively and published over 60 articles on variety of contemporary issues. He can be contacted at Email: [email protected] or mobile (231) 776824437/ 0880330299