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4. Addressing Africa’s Paradox of Plenty “All peoples have the right to their country’s natural resources and wealth without foreign domination.” — African Charter on Human and Peoples’ Rights, Article No. 21
The dismal track record of Africa’s oil producers has led to growing criticism from NGOs, development experts, and people living in oil-exporting areas, producing campaigns criticizing “blood oil” in Sudan, for example, and calling for companies and governments to “Publish What You Pay.” The case of the Chad-Cameroon Pipeline highlights the unprecedented pressure on all major international players to improve their performance. There have been some efforts to change practices and standard operating procedures by the World Bank and the IMF, some oil companies, some governments in the developed world, and United Nations agencies. In most cases, these are incipient attempts that are welcome but often lack coherence, coordination and effectiveness. Even with the catalyst of an everwider group of civil society organizations and church groups becoming involved in natural resources and social justice, such efforts fall far short of the “big push” necessary to challenge the oil record.
Altering incentive structures means that all actions by outside actors that encourage rent-seeking or other damaging development outcomes, whether accidental, intentional or resulting from standard operating procedures, need to be phased out.
But if the “resource curse” is to be broken, timid reforms are not enough. Addressing Africa’s paradox of plenty requires vision and boldness from all major players. The incentive structures in the international environment helping to shape the decision-making of the region’s governments and their domestic allies must be changed, and this will not be easy. Nor can this be accomplished by any single force acting alone. Altering incentive structures means that all actions by outside actors that encourage rent-seeking or other damaging development outcomes, whether accidental, intentional or resulting from standard operating procedures, need to be phased out. At the same time, new policies and actions explicitly rewarding transparency, accountability and fairness and penalizing their absence must be instituted. There is some movement in this direction, as we shall see in this section, but changes are still far too limited to alter the development trajectory of countries living through an oil boom.
4.1 The Efforts of International Financial Institutions
The International Financial Institutions (IFIs) are critical “shapers” of the environment in which oil governments operate. In key moments, especially prior to the exploitation of oil and later when petrodollars become insufficient, they have important leverage in their relationship with African producers. Yet they have been slow to recognize the very poor development record of countries dependent on oil, gas and mining and even slower to alter practices that have contributed to these outcomes, in part, because they benefit from current arrangements. Thus, the IFIs have been a special focus of criticism by environmental, human rights, and pro-poor groups. In response to the growing chorus of disapproval regarding their role in oil exporting countries, IFIs have begun to reassess their own performance. The World Bank Group has started to examine the huge discrepancy between its specific mandate to alleviate poverty and the actual outcomes in oil and mineral exporters. It has initiated the Extractive Industries Review and is making some attempt to address the problems of transparency and governance that so clearly affect the prospects for poverty reduction. The IMF has recently begun to promote oil revenue transparency as part of its overall fiscal transparency agenda. These efforts are still very preliminary and have as yet yielded few results, in part because the two institutions sometimes work at cross-purposes.
Bottom of the Barrel: Africa’s Oil Boom and the Poor –
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