CRS Calls on President Bush to Push Agenda of Just Development of Africa’s Oil

Catholic Relief Services
Wednesday, 2 July 2003

On the eve of President Bush's trip to Africa, Catholic Relief Services (CRS) is urging the administration to intensify diplomatic efforts to break the pattern of corruption and mismanagement surrounding the development of oil in the region.

Sub-Saharan African governments are poised to receive more than $200 billion in oil revenues over the coming decade, according to a recently released report from CRS, "Bottom of the Barrel: Africa's Oil Boom and the Poor." But the opportunity to use that boon to turn the tide of poverty may pass if the administration does not act now to change the way the U.S. does business with African oil states.

"U.S. aid initiatives—like the $15 billion to combat HIV/AIDS in Africa and the President's Millennium Challenge Account to promote economic growth and development in poor countries—are all positive interventions against poverty and disease," said Ian Gary, coauthor of the report and CRS strategic issues advisor on Africa. "But even the magnitude of this intervention cannot compare with the impact of billions of dollars from annual oil revenues. President Bush must take the opportunity during this trip to encourage those petro-states to funnel oil revenues into long-term development for the people."

"Bottom of the Barrel," coauthored by Terry Lynn Karl, Stanford University political science professor, reveals that despite the promise of oil wealth, oil production is exacerbating the poverty that already exists in sub-Saharan Africa. If any change is to take place, all stakeholders in the development and consumption of oil must push for more transparency in the agreements between oil companies and oil states in order to lift the curse of poverty and authoritarian rule tied to oil development. It is on this issue of transparency that the United States can use its influence and leadership to encourage U.S. oil companies to be more forthcoming about their business dealings with African states.

To download or request a copy of the report, go to www.catholicrelief.org/africanoil.cfm. Visit the site to also hear a recording of the press conference as well as to read related information on African oil development.

REPORT OVERVIEW

Africa is fast becoming a key supplier of oil to the United States, which already imports 17 percent of its oil from sub-Saharan Africa. In a decade, nearly a quarter will come from the region. Such wealth will enable the governments to vastly improve lives through investment in health, education, water, roads and other vital necessities. But ordinary Africans will see no such improvements so long as revenues generated by the current oil boom continue to flow into governments lacking in transparency and accountability.

The report makes several concrete recommendations for policy reforms—particularly ones that call for more transparency in how petrodollars are managed and the increased involvement of civil society groups in the management of oil wealth. The changes are first-step efforts designed to encourage African oil producers to channel oil revenues into development and poverty-reduction plans. Recommendations include: oil companies disclosing taxes, royalties and other payments to all national governments, as called for by the "Publish What You Pay Campaign"; and U.S. and other G8 government relationships with African petro-states that prioritize transparency, accountability and respect for human rights.

The report is the culmination of more than a year of intensive study of oil development in Africa. CRS, in its mission to serve the poor, not only provides direct relief and aid to people who need it most, but also seeks to address the underlying factors that lead to injustice and poverty. From that mission comes "Bottom of the Barrel." The report is among the first to trace the regional outcome of oil's discovery in sub-Saharan Africa and to recommend specific policy reforms that provide the best prospects for long-term development for the poor. CRS financially supports church and civil society programs addressing oil in Nigeria, Chad, Cameroon, Congo-Brazzaville, Angola and Sudan.

For more information, or to contact Catholic Relief Services, see their website at: www.catholicrelief.org