In a world of ever-increasing energy demand, West Africa is growing in importance as a supplier of oil to the global market. The rising significance of West African oil and gas-producing states has led, in turn, to growing international concern about the effect of corrupt or poor management of oil revenues on the region’s stability and prosperity and on the well-being of its people.
The Republic of Congo (Congo-Brazzaville) provides a clear example of the way mismanagement of oil wealth not only fails to make countries richer, but can entrench corruption and instability. Despite earning almost one billion dollars in oil revenues in 2004, the country remains one of the poorest and most indebted in the world, and the scene of several bloody civil wars.
Congo-Brazzaville is attempting to persuade its official creditors, led by the World Bank and IMF, that the country should be given debt relief through the Highly Indebted Poor Countries (HIPC) programme. To this end, the government has allowed publication of a large amount of oil data, including several independent audits of the state oil company Société Nationale des Pétroles du Congo (SNPC) by KPMG, the accounting firm.Yet these audits, far from shedding light on how Congo’s oil industry works, have only revealed how much cannot be explained. Crucially, Congo-Brazzaville government has not acted on the recommendations of the auditors to address the structural failings in the state oil company’s management of Congo’s oil.
Investigations by Global Witness and information disclosed through court actions taken by private creditors seeking to seize Congo’s assets in the UK, USA and France have revealed systemic and troubling discrepancies in Congo-Brazzaville's oil accounts.This raises serious questions about the government’s willingness to truly reform its finances at a time when it is trying to convince the international community that it merits debt relief.
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