Nov. 7, 2012 – African people are increasingly demanding greater transparency and accountability on the part of companies and governments in the development of that continent’s abundant resources, according to the head of an African energy policy organization.
“Africa is rich in resources, poor in development,” Mohammed Amin Adam, executive director of the Africa Centre for Energy Policy based in Ghana, told University of Houston Law Center students Tuesday. African nations provide 12 percent of the world’s oil – 15 percent of all imports to the United States – yet billions of dollars are lost to illicit outflows of funds, he said. Foreign investors, especially the Chinese, invest huge amounts in development of natural resources, but there is little accounting of how that revenue is spent. “The people are being shortchanged by their governments,” he told students in Professor Jacqueline Weaver’s International Petroleum Transactions class. “The people of Africa are demanding more transparency.”
Under provisions of the 2010 Dodd-Frank Act, the U.S. requires oil, gas, and mining companies to file SEC reports on all payments made to host governments at the project-level. Citizens of African countries can then press their governments for greater accountability in the expenditure of these funds on education, health, roads in the country, and other areas. But the law will have little effect on transparency or forcing better revenue management unless other countries such as Canada and Australia and the European Union and Hong Kong join, Adam said.
He said Dodd-Frank, in fact, will put U.S. companies at a distinct disadvantage, especially when competing with Chinese companies. In his view, the Chinese disregard human rights, safety, and environmental impact, support dictatorial regimes, and import their own workers instead of creating jobs for Africans. He referred to several recent violent incidents by resentful Africans against Chinese companies and workers. Chinese investment in Africa is “growing by the day,” Adam said, 33 percent growth each year since 2000. The reasons are obvious, he said: the Chinese do not “lecture” about human rights, corruption, and governance as do Western nations and their investors; the Chinese impose fewer conditions and strings to development; and European nations and the U.S. today seem more interested in their own domestic issues than in development in Africa.
“Africa needs investment” from Western nations, he said, and the advanced technology and higher standards that come with it. “The real challenge is how to manage resource revenues. Africa needs a critical citizenry for public oversight of how the revenue is spent,” he concluded. “Good investment governance will eventually triumph.”