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.


AidData 3.0 Makes Development Data Easily Accessible

For those of us still enthralled by a very notoriously dysfunctional website, the recent release of AidData 3.0 should restore your faith in the power of the Internet and web developers. AidData is an online database that seeks to improve international development outcomes by making aid data accessible and actionable through crowdsourcing and an interactive user interface. The data portal allows any global development stakeholder to analyze over $40 trillion dollars in integrated remittances, FDI, foreign aid, private foundation grants, and domestic public expenditures across countries from 90+ donor agencies. AidData facilitates comparability between incoming financial flows and their subsequent real world outcomes and has the potential to be a valuable tool in the areas of development finance most readily amenable to policy changes.

A GIS map from AidData showing all the development projects in Malawi. (Source: AidData)

The remarkable thing about AidData is that you do not have to work at the World Bank or even the Hudson Institute’s Center for Global Prosperity to effectively engage the interactive database. The portal provides enhanced visualization tools that make online data analysis easy and intuitive, even on a granular level. Users can run search queries for a specific project, donor, or country and generate state-of-the-art visual dashboards and geographic information system (GIS) maps instead of cumbersome data tables; all the food security projects in the northern Antsiranana region of Madagascar are just clicks away for a finance minister managing a large aid portfolio, an NGO volunteer working in a local field office, or a researcher conducting an in-depth study.

Civil societies are being increasingly seen as “arenas” of evolving mass participation and information exchanges with entering and exiting NGOs, social movements, and private investors that advance the common interest over pursuing private goals rather than as a static term with rigid contours.The spirit of AidData in rooted in the recognition that a nation with the most wealthiest of donors or a developing country with the most pressing of needs cannot successfully partner unless they both operate in vibrant civil societies and have adequate access to information.  The poor in any given country may think that a routinely absent teacher or doctor must be just an accepted feature of the poor and may not realize that this may be due to unaccountable and opaque political institutions. This is where not only AidData but mediums like radio broadcasts, mobile telecommunications,  and SMS messages can supply vital information, triggering a demand for accountability from institutions and even reciprocally nudge individual behavior. For example, a community-level information project in Uganda utilized community monitoring of health workers and service providers to dramatically improve health outcomes. Health facilities began to use suggestion boxes and numbered waiting cards and the reductions in wait time and absenteeism were dramatic. Similarly, when individuals in Peru, Bolivia, and the Philippines received monthly SMS message reminders to make a monthly deposit into their savings account, the gross amount saved by the reminded individuals increased by 6%.

Those on the opposite side of the equation that are administering aid and spearheading various development projects benefit from AidData to an even greater degree. Looking toward the future, natural disasters—which have doubled since 1980—will present a real danger to international peace and security and augment displacement, business shocks, and enormous material damage in the most vulnerable of communities as they. When a disaster strikes, first response usually comes from NGOs and their volunteers and then big governments and organizations follow, resulting in inefficient and uncoordinated relief responses; one community may receive triples rations of food but no water with another community not receiving any aid at all. The GIS maps of AidData can be a less costly tool to coordinate humanitarian and disaster relief projects as those working on the ground can see in real time which areas have yet to receive help.

An NGO worker assesses the impact of an agricultural project in Nepal (Source: Alena Stern)

Individuals have a right to be informed in order to hold governments accountable. Information is needed to actively participate in decision-making and is increasingly needed to access government services. Nevertheless, information is useless if individuals in civil society are not enabled to act on it. Appraisals of civil society should reflect this fluid component and open data portals like AidData should continue to seize opportunities to enhance transparency and improve efficiency by providing accessible and utile data to all development stakeholders.

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

No Aid for You: (The Effects of) Placing Restrictions on Foreign Aid

British PM David Cameron | Source: Reuters

Headlines in the news lately have featured Britain’s International Development Secretary Andrew Mitchell and Prime Minister David Cameron declaring that the UK will no longer send aid to countries that restrict or criminalize the behavior of the gay community. Uproar over their statements is largely due to the concern that cutting aid will affect the poor who benefit from the development programs/aid relief, and will leave government officials who implement the programs unscathed.

As of now, Britain has only declared aid reductions for Malawi (a cut of £19 million so far). Last year in Malawi, two men announced their engagement; they were arrested and sentenced to 14 years of prison with hard labor. They were then released, in part from international outcry that the punishment was overly harsh (noting that the judge sought to make an example of their case to other gays). Other countries, such as Ghana and Uganda, are under scrutiny for homophobic measures as well. For African countries with large HIV/AIDS populations, such as Ghana, homophobic stigmas make HIV/AIDS treatment and awareness more difficult.  Continue reading