extractive industries and corruption the case of africa’s oil boom ian gary, oxfam america univ....
TRANSCRIPT
Extractive Industries and
Corruption
The Case of Africa’s Oil Boom
Ian Gary, Oxfam America
Univ. of Notre Dame, Nov. 13, 2006
Oxfam America and Extractive Industries
www.nodirtygold.org
•Mining
•Oil
•Gas
Africa’s Oil Boom• New producers joining well-
established producers• Exploration across the
continent• Increased production from old
(Nigeria, Angola) and new producers (E.G., Chad)
• Sub-Saharan Africa production growing from 3.4 mbpd in 2003 to over 6 mbpd in 2010
Africa’s Oil Boom: Opportunities
• Huge cash inflow - $349 billion government “take” 2002-2019 (PFC Energy)
• Opportunity to use windfall to increase social sector spending and reduce poverty
• Strategic interest from outsiders
Africa’s Oil Boom: Challenges• History of corruption,
mismanagement, conflict and worsening poverty in existing and new producers – paradox of plenty / resource curse
• Poor governance and human rights environments
• Secrecy in contracts, opaque revenue payments and government spending
• Entrenching rentier states / reduction in non-oil revenue collection
Africa’s Oil Boom: Challenges• Weak government
capacity to manage and allocate windfall
• Dutch disease – crowding out other productive sectors
• Enclave economy – few linkages and few jobs produced
• Increased political instability and conflict
• Local / regional grievances
Conditions for Success• Good governance, human rights and rule of law• Address corruption, transparency and
accountability concerns– Building appropriate legal framework– Regular independent and published audits of
NOCs and IOCs• Increased opportunities for watchdog oversight• Build government capacity to manage and
invest money in people • Increase social spending – broad based and
equitable
Addressing Corruption• Publish What You Pay
– Stock Market Listing– Requirements on Financing
• Investor Interest• International Financial
Institutions– World Bank EIR –
commitments and implementation
– IMF – Draft Guide on Resource Revenue Transparency
• USG legislation
Addressing Corruption• Government/Corporate
Response = Extractive Industries Transparency Initiative (EITI)www.eitransparency.org
• Multistakeholder initiative• Voluntary – requires host
government agreement• Validation – “rules of the club”• Delisting – “free rider” problem• Incomplete picture – licensing,
contracts• Non-Western participation?• Incoherent policies of Western
governments
Extractive Industries and
Corruption
The Case of Africa’s Oil Boom www.oxfamamerica.org