Niger Delta Blues

The nickname “black gold” has always been apt when dealing with oil. But dreams of riches and development have been masked by the murky nature of money flows connected to it. Nigeria in particular has been blessed and cursed with its abundant oil supplies. With the second largest GDP in Africa, Nigeria still has 46% of its population below the poverty line. This is despite the oil and gas sector representing 35% of the Nigerian economy, according to OPEC. The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture has even asserted that the oil and gas sector has been distorting the Nigerian economy. Recent revelations have shown that corruption in the oil sector is still rampant. The question becomes what pressure can be brought on the industry.

Lamido Sanusi, former Nigerian central banker and whistle-blower

Recently, Lamido Sanusi, the Nigerian central bank president, was suspended and removed from his position by President Goodluck Jonathan. Sanusi’s suspension was prompted by the revelation that $20 billion in oil revenue was not accounted for by the Nigerian National Petroleum Corporation. The revelation created enough of an uproar that a forensic audit has been called for to try and account for the missing money. This is on top of the fact that a month earlier, the NNPC was selling kerosene to marketers at one-third of the international price, allowing them to mark up kerosene to Nigerian citizens 300-500%. The mark-up is the difference between 140-160 naira per liter ($.85-$.97) and 40 naira per liter ($.24).

In the past, Nigeria tried to tackle the issue of corruption and the lack of transparency in the oil sector by establishing the Nigeria Extractive Industries Transparency Initiative (NEITI) in 2007, which is the local adaptation of the Extractive Industries Transparency Initiative (EITI). NEITI is mandated to audit the extractive industries, and provide transparency and accountability. It is comprised of representatives from the government, oil industries, and civil society. While the cooperation of national governments and NGOs is a laudable achievement, the voluntary nature of the EITI has been criticized.

Shell and the Niger Delta

International NGOs, such as Oxfam and Publish What You Pay (PWYP), feel that the standard adopted by extractive industries should also be backed by a legal enforcement framework. EITI has also been criticized for the role of civil society organizations (CSOs) in the EITI framework. EITI can be considered a top-down reform, and the governments and extractive industries still have more power than the CSOs, creating pressure for the CSOs to go along with the EITI process, according to Kees Visser at the Focus on the Global South. There is also the question of which CSOs are chosen to be represented. EITI has also not been shown to reduce the Corruption Perceptions Index. In Nigeria, the NEITI has published audits, which have had no effect on laws,  because dissemination is not simple in a country with low internet access. There have also been representatives of NGOs who were actually single person self-promoters.

With the doubt cast over the EITI, the question remains on what model civil society in Nigeria should use to ensure that all Nigerians benefit from their extractive industries. While there is a local chapter of Publish What You Pay, coalitions in Ghana and Uganda could serve as templates for counterbalances to the government and industries. The Civil Society Coalition on Oil and Gas (CSCO) in Uganda and the Ghana Civil Society Platform on Oil and Gas are both large coalitions of CSOs: 40 in CSCO and 120 in Ghana compared to 19 in PWYP. Both coalitions use the expertise from individual CSOs to issue media campaigns and community interaction to pressure governments to keep oil and gas taxes and concessions transparent. In Ghana, the Civil Society Platform on Oil and Gas issues “Readiness Report Cards” and actively contributes to the Public Interest and Accountability Committee and proposed laws through the committee. The Ghana platform is funded by various international donor agencies, such as USAID and the EU, and therefore have the backing of powerful partners. Both of these countries have only recently discovered oil, so it remains to be seen how successful these coalitions will be in exerting pressure. For the most part, there’s nowhere to go but up.


UK’s “Volatile” Aid Policy to Rwanda

After suspending aid to Rwanda for the second time in 2012, UK’s Department of International Development (DfID) controversially restored its aid package in early March.

UK’s aid to Rwanda was said to be “funding a dictator” by a former aide to the President of Rwanda.

Tracing back to UK’s first halt on the Rwanda-destined aid in last July, it’s clear that DfID’s aid policy to Rwanda can be inconsistent. The first halt was announced due to an interim UN report that unveiled Rwanda’s military involvement in the DRC conflict, according to the Guardian. Contentiously, DfID resumed the aid, claiming that Rwanda was shown to have ended its support of rebels in DRC. Roughly two months later, the new DfID Secretary, Justine Greening made the decision of suspension again because of the international criticism and subsequent evidence from the UN. But now, DfID presents the world with a “reprogrammed” aid plan to the same Rwandan government.

Based on Greening’s statement on March 1st and the Guardian’s report, UK’s “reprogrammed” funding enjoys the following “advantages” that target on the needy Rwandans directly while bypassing the Rwandan government:

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The Bodyguard of Chinese Philanthropy — China Charity Navigator (CCN)

In 2011, a 20-year-old Chinese girl named “Guo Meimei” exhibited a series of photos of her shiny Maserati car, birthday party in her extravagant villa and other luxuries on Weibo –the Chinese Twitter, as reported by ChinaDaily. On her profile, she described herself as the “General Business Manager of The China Red Cross Society.” As Weibo has a thorough identity checking system when members sign up, the approval of the description came as a surprise. The incident immediately provoked a serious controversy over the operation and transparency of The China Red Cross Society —“How can such a young lady possess this wealth; is her wealth linked to Red Cross?” Even as the China Red Cross Society denied any possible connection with “Guo Meimei”, it became trapped in this reputation crisis ever since.

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Trust in NGOs Dependent on Media Independence

NGOs operate on the principle of being independent “Third Sector” organizations, working outside the realm of the government “Public Sector” and the for-profit “Private Sector.” The independence of NGOs of all causes has long been considered a fundamental operating principle.  For humanitarian organizations, being perceived as an extension of state power could have fatal consequences. For another group of NGOs, a lack of independence may not be life-threatening, yet for political non-profit organizations in the U.S., a perception of partisanship could result in the revocation of its “social welfare” tax-exempt status.

An independent news media, where people have the freedom to access objective information, has long been seen as foundational to democracy.  The recent tragedies in Libya and Egypt highlight the potentially lethal consequences of a perceived state manipulated media flow, as these countries’ governments have inculcated the widespread belief that the US government approves of the inflammatory “Innocence of Muslims” video, believed to be the source of turmoil in Afghanistan, Pakistan, Egypt, Indonesia and Libya. Continue reading

Beating the Resource Curse with Oil to Cash Transfers, Part 2

A joint post by Michael French and Laura Esposito

Oil in Libya | Source: The Africa Report and Reuters

The resource curse plagues many nations, partially because it’s difficult to hold leaders accountable for the millions of dollars of oil revenue. However, some countries are making progress. For example, Libya’s new government wants more transparency around the oil sector, suggesting that government contracts will be published online. This, the new government hopes, will encourage Libyans to play a role in the process and potentially benefit from that nation’s large oil reserves. Another option is encouraging the government to use oil revenue for cash transfers to its people, increasing accountability and providing citizens with income to address their needs.

Using oil to cash transfers, championed by the Center for Global Development, the program would essentially take the revenue gained from the oil and put it in the hands of the people. The oil to cash transfer initiative divides a large portion of oil revenue and distributes it to the people evenly. These cash transfers are then treated as income and subsequently taxed by the government, with the taxes creating a stronger link between the people and government activity. Continue reading

Oil’s Slippery Slope, Part 1

A joint post by Laura Esposito and Michael French

Oil is arguably the most important natural resource in the global arena. It brings wealth and poverty, endorses governments and private companies, causes wars and land disputes. Until clean energy takes the stage entirely, oil may as well run the world. And run it does. With oil-centric political decisions made by Uganda, Brazil, and Nigeria, among several others, the race is on for developing countries to capitalize on this black treasure before it becomes obsolete.

What of oil’s role in the development process? With the world’s huge reliance on and consumption of oil, it makes intuitive sense to think that a discovery of oil would be extremely beneficial to a country. For example, the United Arab Emirates and Norway have benefited from oil. After all, oil pays the bills in the short term and also allows countries to invest in long-term projects and more easily transition to other sources of energy. Additionally, oil attracts foreign direct investment because countries without oil need to get it from somewhere. In certain circumstances, especially when solid economic infrastructure already exists, this holds true. But oil often harms less established, developing countries. Continue reading

The Top 100 NGOs.

The Global Journal recently published a list of the Top 100 Best NGOs. The list includes big-name organizations like the Wikimedia Foundation and Médecins Sans Frontières, as well as relatively smaller campaigns such as Movember. While there are benefits to the publication of such a list, there are also certain downsides.

First, the pros of publishing such a list. The Global Journal’s circulation is reported to be 15,350 magazines in 30 countries, a considerable audience. Factoring in viewership on the Internet, readership numbers for The Global Journal are substantially high. What is more important though, is who reads the magazine. Considering the profile of a reader who would pay for a magazine in global affairs (88% of The Global Journal’s circulation is paid), such a list could have a huge impact. The list recognizes the work these organizations do, which could help match them with donors and funding in the future. This push is especially important for organizations that rely on active participation by donors. One such example is Movember. Movember’s funding predominantly comes from money raised during the November campaigns, during which volunteers grow out their moustaches in an effort to raise money for men’s health. Their inclusion on the list only serves to raise awareness about the campaign, which will hopefully add to the increasing number of charitable moustached men in the month of November. Continue reading