March 30, 2012 / 3:18 PM / in 6 years

AFRICA MONEY-The murky world of Africa oil back in spotlight

JOHANNESBURG, March 30 (Reuters) - The International Monetary Fund had bad timing this week in approving the latest tranche of a loan to oil-rich Angola, coinciding as it did with the issuance of a French arrest warrant for the son of Equatorial Guinea’s President Teodoro Obiang Nguema.

Both events highlight the murky world of African oil, one long linked to rampant graft, glaring income disparities and political longevity: Africa’s longest-serving presidents run the shows in Equatorial Guinea and Angola.

Let’s start with the IMF loan, which was approved on Wednesday, the final $132.9 million disbursement to Angola under the country’s $1.4 billion loan agreement made in 2009.

Earlier, rights groups wrote to IMF Managing Director Christine Lagarde urging the IMF’s executive board to withhold the final tranche until the Angolan government improved transparency on how it uses public funds.

They also urged the government to explain a $32 billion discrepancy in public funds thought to be linked to the state oil company, Sonangol.

The IMF said Angola, Africa’s second-largest oil producer after Nigeria, had taken measures to improve its accountability in public spending and oil profit transfers.

Perhaps, but a lot remains to be explained.

As Human Rights Watch has noted, the Angolan government has not yet explained a discrepancy of $32 billion in state funds thought to be linked to Sonangol and spent or transferred from 2007-10 - a discrepancy flagged by the fund in October.

After the fund’s review mission in January, the IMF said it expects the government to be able to explain a large part of the discrepancy as it relates to operations undertaken by Sonangol for the government, financed out of oil revenues but not recorded in budgetary accounts.

“The explanations are preliminary and not credible until they are subject to close scrutiny and verification,” said Lisa Misol, a senior researcher at Human Rights Watch in New York.

Misol said that among other things, the government in Luanda had pointed to Sonangol’s spending on housing for the poor, which raises questions about why the state oil company is overseeing such projects and who is monitoring them.

When it comes to transparency, Angola has long had a dubious track record, one the fund itself has often highlighted, and the same crowd remains in charge. President Jose Eduardo dos Santos has been in power since 1979.

The ruling MPLA in the former Portuguese colony has for decades been accused of graft on a grand scale and of squandering petrol dollars with little benefit to the poor. Most Angolans live in dire poverty.

In 2009, when the IMF loan was agreed, almost $6 billion was spirited out of Angola, according to calculations provided to Reuters last year by the Washington-based anti-corruption advocacy group Global Financial Integrity.

When it comes to Angola, the sums are always eye-popping: that $6 billion would have been a sixth of its budget while the $32 billion is about 40 percent of its gross domestic product.

Angola - population 19 million - is also approaching oil production of 2 million barrels per day at a time when crude is over $120 a barrel which begs another question: what does it need a $132.9 million for?

That also counts for loose change in the petrol state of Equatorial Guinea, whose president, Teodoro Obiang, is Africa’s longest serving leader.

Two French judges have sought an international arrest warrant for his son on money laundering charges, a judicial source said on Tuesday.

The son Teodorin is frequently seen enjoying an extravagant lifestyle abroad with multi-million dollar mansions, jets and yachts while most of Equatorial Guinea’s 1 million or so people live in poverty and have seen little benefit from oil.

As part of the investigation, French police raided a building belonging to Equatorial Guinea in a wealthy area of Paris in February. After three days they removed art works and fine wines worth several million euros while the building was valued at about 150 million euros.

With money to splurge like that, who needs the IMF?

Editing by Ron Askew

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below