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Oil: corruption at all levels?

Theft, overbilling, corruption… African petroleum ministries are regularly questioned. The states would receive only part of the gross revenues. To the chagrin of the people.

It was a first in Algeria. In August 2013, Chakib Khelil, ex-CEO of Sonatrach, which provides 95% of the country's hydrocarbon exports, and former Minister of Energy was targeted by an international arrest warrant, accused of "abuse of power. and constitution of criminal gangs ”. More recently, on August 11, the Malawi Anti-Corruption Bureau announced the arrest of Energy Minister Newton Kambala and several advisers on suspicion of corruption. The minister had tried to favor several suppliers. Business far from unique in Africa: in most countries with high oil revenues, scandals are legion. From drilling to exporting crude, every oil-related job is subject to diversion.

Embezzlements which very often bring oil capital into tax havens. Oil ministries are such wasp nests that some presidents prefer to avoid leaving this wallet to anyone. This is the case of Muhammadu Buhari. The Nigerian indeed granted himself the post of Federal Minister in charge of Petroleum and Natural Resources less than six months after his arrival at the Presidency of the Republic, before choosing a minister whom he then… dismissed. At this post, it is the waltz of the ministers.

4 to 20% annual losses

On August 16, the President of Nigeria adopted a law which notably provides for more regulated taxation and better redistribution of wealth in the oil sector. A promise that the Head of State had promised when he had just been elected. Since 2008, seven years before the start of Buhari's first term, this text had been discussed many times in parliament. And it was getting urgent that it finally be voted on. Nigeria has always been considered one of the hotspots of oil corruption. In the 1970s, with the oil boom, numerous embezzlements were denounced, no matter what the regimes, civilian or military. Between 1979 and 1983 alone, the country would have lost 16 billion dollars, according to the calculations of Tam David-West, Minister of Oil until the mid-1980s. A colossal sum, representing 20% ​​of total oil revenues. Each year since the 1990s, Nigeria would lose at least 4% of its oil revenues.

Diversions that find several explanations: small and large fraud on the one hand, overbilling of contracts and bribes from officials, but also the theft of oil by agents of the NNPC, the National Company oils. It must be said that after each military coup, the accounts of the NNPC were made even more opaque. Another study, this one on the Treasury between 1988 and 1994, shows that more than 12 billion dollars had vanished. And the higher the price of a barrel, the more colossal the diversions.

From thefts, from drilling to export

In a study by the French Institute of International Relations (Ifri), researcher Marc-Antoine Pérouse de Montclos writes that “the diversion of the oil manna actually begins at zero point of extraction, when well-organized mafias come near. wells drill pipelines to extract crude and transfer it to barges ”. But, continues the author of the study, this theft is now taken into account by the oil industry. Where the theft of greater magnitude begins, it is at the time of the signing of fraudulent contracts, but also with regard to multiple invoices, fictitious jobs or even the “protection racket”. Without forgetting the contraband for export, which remains a huge market.

If, compared to the figures of the oil sector, the diversions can seem almost anecdotal, it is clear that most oil-rich countries suffer from poor socio-economic development. Angola is one example among others, but certainly one of the most representative: the country is indeed the second largest oil producer in sub-Saharan Africa. The majority of GDP is represented by oil revenues, with oil also accounting for 94% of exports. Nevertheless, the situation is fragile : “Most Angolans have little access to basic health care and life expectancy at birth does not exceed 41 years. The low development impact of oil-based growth partly reflects the lack of political efforts to address the issue of wealth distribution, ”summarizes U4, a Norwegian anti-corruption resource center, which points to the lack of transparency of Angolan authorities.

A “resource curse”?

The NGO sees it as a “resource curse” and therefore asks for more transparency. But is there a real will to change things? "The sales of crude oil by governments and their national oil companies (NOCs) are one of the least studied aspects of the governance of the oil sector", deplore the three Swiss researchers Alexandra Gillies, Marc Guéniat and Lorenz Kummer. In a report, they studied hundreds of transactions which "escaped all scrutiny, due to not very transparent practices adopted by these firms and weak regulations".

Beyond Africa, an entire oil sector remains opaque. "For oil wealth to generate development gains, progress must be made on several fronts, both in producing countries and in countries where trading companies are based, such as Switzerland," say the three. researchers who conclude that the majority of sales "take place in environments characterized by high corruption rates and weak institutions, but in dire need of funding for their development programs."

An opacity in which governments seem to take pleasure. The Africa Center for Strategic Studies, in 2016, published a report in which it deplored the intimidation of journalists and whistleblowers by African leaders. Latest example in Togo: Ferdinand Ayité, publication director of the investigative magazine L'Alternative, had investigated acts of corruption within the Committee for Monitoring Oil Product Price Fluctuations - a body which this time concerns the import of crude. The journalist had been arrested.

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