Africa's oil richness isn't reaching its people yet

Mar 05, 2001 01:00 AM

Manuel Micha lights up a cigarette and surveys his darkened workshop, filled with sawdust and carefully preserved machinery dating back to colonial days. Construction has been booming since the discovery of oil off the coast of this tiny central African nation five years ago. American oil executives, French engineers, Filipino rig workers, businessmen from Cameroon, Nigeria and Senegal are pouring into this once-isolated capital, and they need homes, offices and furniture.
Micha's carpentry shop, however, is silent as idle workers wait out the latest power cut. A new electricity plant built with oil money could guarantee a continuous supply of power -- but old transmission lines have yet to be upgraded, and blackouts occur almost daily.
"I haven't seen any of this oil," Micha says, shaking his head. "The money doesn't reach my level." President Teodoro Obiang talks ambitiously about Equatorial Guinea becoming the Kuwait of Africa. He also appears acutely aware of the mistakes made in oil-producing countries like neighbouring Gabon and Cameroon, which remain rife with corruption and dependent on foreign aid.

But so far, little has changed for most of Equatorial Guinea's 470,000 people. They still eke out livings as farmers, fishermen or loggers in the lush, tropical nation where the few small towns appear on the verge of surrendering to encroaching jungle. For decades, European petroleum companies searched for viable fields off the cost of this former Spanish colony.
It was Americans who finally brought an important reserve into production, in 1996. Annual US investment is now estimated at $ 5 bn -- fourth largest in sub-Saharan Africa -- and oil companies are flocking to sign new exploration deals. The country is currently producing about 120,000 bpd of oil, most extracted by Exxon Mobil Industry officials expect that to double over the next year and quadruple by 2002.
While a tiny fraction of the world's production, that would equal one bpd of oil for each of the country's citizens. Already, things are changing. Government salaries have more than doubled in three years, and there is new energy in the once-sleepy island capital, with its narrow streets and tiled villas.

European-style cafes and restaurants are opening, roads are jammed with cars, and it is almost impossible to find a hotel room. "Everything is moving now. Anyone can work," says Aisha Sangopilar, 33, a single mother of three.
She proudly displays her concrete house, completed with earnings from her new government job, that stands amid the rickety wooden buildings and open sewers of the crowded Campo Yaounde neighbourhood. Government-financed construction teams are everywhere in the capital, upgrading the water system, paving roads and building a new airport terminal.
A pink marble conference centre was built along the airport road, and a brightly lighted plaza was added downtown, with a television set that broadcasts throughout the night for a transfixed audience. "We are happy to be almost the last tobecome a petrol-producing country in Africa," says Domingo Mba Esono Nzang, secretary general of the mines and energy ministry. "We'll turn others' mistakes into our achievements."

Oil companies, too, appear determined to avoid errors made in countries like Nigeria, where pipelines are regularly sabotaged and employees kidnapped by villagers protesting environmental damage and insufficient community development. "Lessons have very definitely been learned in terms of how to work with the local population and protect the environment," says Ken Keag, vice president in charge of African operations for Houston-based CMS Oil and Gas. "People understand that you don't just go out, find the stuff, produce it and leave." CMS built Malabo's new power plant, which it operates for the government.
A $ 430 mm methanol plant goes into production this year, which will extinguish the gas flare that now lights up the sky. Oil companies also provide jobs and training, particularly for construction workers, security guards and the like. But with limited skilled labour available, they also bring in large numbers of foreigners, which the government has started to protest.
For all the promises to improve lives, so far there are no new schools or clinics. A young woman brings her sick child to the downtown Salvation Pharmacy, where Feliciano Ondo checks the girl's forehead for a temperature, counts out a few pills and waives the fee. "She couldn't pay," he explains, as the woman smiles gratefully and retreats out the door.

Outside the major towns, little has changed for the more than 60 % of the population that is rural. "The oil is in Malabo," Amadou Lorre says as he spreads cocoa beans to dry in a wood-burning oven dating back to 1906 at a factory in the small, rundown town of Sampaka. "If you work here, it makes no difference." Under Spanish rule, agriculture dominated the economy, and the country produced about 40,000 tpy of cocoa. Since independence, however, most major plantations have been abandoned for subsistence farming.
The government hopes to use oil revenues to relaunch this sector. But officials concede there is still no financing or training available for rural projects. In an attempt to spread development outside the capital, top officials have started moving from town to town. But development agencies consider it wasteful. And with no offices to telephone outside Malabo, just finding a minister can be a nightmare. UN officials have suggested local development would be better served by decentralizing authority.

President Obiang has kept tight control since 1979, when he overthrew his uncle, the feared dictator Francisco Macia Nguema. He has been widely accused of human rights abuses, and many opposition figures live in self-imposed exile in Spain. Recently, however, he has started opening up the country. Equatorial Guinea -- Africa's only Spanish-speaking nation -- has made French its second official language, adopted the central African franc as its currency and taken a more active role in regional organizations.
Politically, too, it has relaxed, with parliament vigorously criticizing government ministers for corruption. But opposition leaders say power remains firmly in the hands of Obiang and his family. Diplomats, speaking on condition of anonymity, say the real powers in the key energy and forest ministries are the sons of Obiang and not the ministers. And no one seems to have precise oil revenue figures.
Foreign assistance has been scaled back because of this lack of open government, which the World Bank says has been accompanied by mismanagement and corruption. Archbishop Ildefonso Obama Obono warns that his largely Roman Catholic countrymen are tiring of empty promises. "There is impatience to see the repercussions of oil on people's everyday lives," he says. "We can only hope the benefits will be extended to the poorest."

Source: AP via Newspage
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