Blog / Aug. 5, 2014

Ending corruption is the key to ending poverty in Africa. Will President Obama push it at this week’s summit?

Read more on this post in the Huffington Post and Wall St Journal 

This week, leaders from across Africa are gathering in Washington, D.C. for the first U.S. -Africa Leaders Summit . They’re there to discuss how best to ensure stable, sustainable development across the continent, which is very welcome indeed. But these efforts are very unlikely to succeed unless they focus on the billions of dollars’ worth of natural resource wealth that African citizens are robbed of every year through corruption.

There are several initiatives to tackle this problem being developed in the US at the moment – and they need airtime at the summit.

Corruption in the natural resource sector is disastrous for Africa’s development. In 2012, the continent’s oil and mineral exports were worth $305 billion – almost seven times the amount it received in international aid. Yet lack of accountability in oil, gas and mining deals means much of Africa’s population remains desperately poor, while political elites and international companies make a killing.

Take Equatorial Guinea, which has one of the highest per capita incomes in the world, yet most of its citizens live in dire poverty.  Its President Teodoro Obiang Nguema Mbasogo rules with one iron fist and plunges the other into state coffers to fund a cartoonishly lavish lifestyle for him and his family. The U.S. Department of Justice says that the president’s son Teodorin has spent more than $300 million on luxury items with the proceeds of corruption, including using anonymous companies to buy a $30 million mansion in Malibu and a $38 million private jet.

Some African leaders were not invited – Zimbabwe’s President Robert Mugabe, for example.  And yet, despite these terrible statistics, President Obiang will be in DC this week, making the most of the photo-ops with the leader of the free world. But will he be asked the hard questions about where all the money from oil, logging and other activities has gone, or about his regime’s abysmal human rights record?

Then there’s Angola. The second biggest oil exporter in sub-Saharan Africa, Angola’s oil sector provides the government with 80 per cent of its revenues. So why does it have one of the highest child mortality rates in the world?

Global Witness has documented corruption concerns in Angola since the late 1990s. The latest is that U.S.-listed companies including BP and Houston-based Cobalt are paying the Angolan government at least $350 million to fund an oil research center. The problem is that nobody – neither the companies paying the money, nor the government, nor expert industry insiders – can confirm that the center exists.  This doesn’t necessarily mean that the money has disappeared, but citizens need to know – where has all that money gone?

It’s not just about asking difficult questions of specific leaders, either. The U.S. is trying to open up the extractive industry’s finances at the source. In 2010, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, it passed legislation requiring oil, gas and mining companies to disclose what they pay to all governments. This would make it much, much easier for citizens to hold their leaders to account.

This move was historic, and catalyzed global action; similar laws have now been enacted in the European Union and Norway, and Canada is on track to introduce similar legislation next year. But progress has now stalled in the U.S. because a small number of powerful oil companies are lobbying to drastically weaken the rule that will implement the Dodd-Frank law. If it is serious about stemming the corruption that is holding African countries back, the U.S. must resist this pressure and implement a fit-for-purpose rule as soon as possible that is consistent with that of the EU (which was itself inspired by U.S. leadership).

There are other ways to bring business into the open, too. Many African countries are signed up to the Extractive Industries Transparency Initiative (EITI) standard. Under the EITI’s new rules, countries are encouraged to publish natural resource contracts and the real owners of companies who win natural resource contracts.  All EITI countries should follow those African countries that are doing this.  And they should allow civil society the space and safety to make sure citizens can scrutinize and critique resource deals without fear of reprisal.

Across the world, momentum is building to lift the veil of secrecy over money that could transform education, healthcare, judicial and other critical systems in developing countries. The U.S. has played a key role in making some of this happen – but its companies have also provided some of the best-funded and most well-connected resistance.  What exactly have they got to hide?  If the U.S.-Africa Leaders Summit is to be more than a talking shop and a photo-op, President Obama must ensure that these issues get the airtime they need, and put the US back at the heart of the push for open and fair business.

Simon Taylor is Founding Director of Global Witness. Corinna Gilfillan is Head of the Global Witness US Office.