African countries battle 'oil curse'

Experts call it the "oil curse". In Africa's oil exporting countries, only a tiny fraction of revenues is used to fight poverty, and in many cases black gold has actually become a hurdle to development.
Oil in Africa - from the Gulf of Guinea to north-western Sudan - lies at the heart of questions of good governance and development, as oil prices and revenues soar but fail to bring better living standards for millions of poor.
Across the continent, "oil money evaporates into the savannah", Jean-Marie Chevalier, a professor at Paris-Dauphine University and director of Cambridge Energy Research Associates (CERA), told a conference in Paris this week.
Not only does oil wealth fail to translate into economic development, but in many cases it distorts the country's economy and holds back the development of other export industries, he said.
Almost everywhere in Africa, oil has fostered corruption and bureaucracy - without benefiting the poor, according to speakers at the conference, organised by the French Agency for Development.
Africa accounts for 11.4 percent of global oil production, holding 9.4 percent of the world's reserves.
The continent's output has surged by 40 percent since 1990 to 10 million barrels per day (bpd), fuelled by demand from importers such as the United States and China looking to diversify their supply outside the Middle East.
Established exporters such as Nigeria, Gabon, the Republic of Congo and Cameroon have been joined by newcomers Chad, Equatorial Guinea, Sudan, Sao Tome and most recently Mauritania.
Yet despite the flow of oil revenues, African producers fare no better than importers in terms of development, according to Chevalier.
Nigeria - Africa's most populous nation and its largest exporter with 2.5 million bpd - is a prime example of the "oil curse", according to Philippe Sebille-Lopez, of the French Institute of Geopolitics. "The evolution is catastrophic and the country is regressing in terms of human development," he said.
Between 2004 and 2005, Nigeria lost seven places on the UN scale of human development, sliding from 151st to 158th out of 177 countries monitored.
More than 70 percent of Nigeria's 130 million inhabitants survive on less than a dollar a day, and social unrest has gripped the oil-rich south as local communities rise up to claim a share of revenues.
Another case in point is Chad, which has been exporting crude oil since 2003, reaching a current rate of 200,000 barrels per day.
"Chadians don't understand why oil prices are rising but not their living standards," said Geraud Magrin, a leading researcher in the field. Under a World Bank scheme, imposed in part because of endemic corruption, Chad agreed in 1999 for its oil to be extracted by a US-Malaysian consortium and for the revenues to be funnelled into development programs.