Gushers of wealth, but little trickles down

"our dreams have come true," says Emilio Mbeng, a farmer standing in front of his wooden shack on the outskirts of Equatorial Guinea's tiny jungle capital. US oil companies recently discovered significant new oil and gas finds off the coast, and suddenly one of Africa's tiniest, most impoverished nations is flush with millions of dollars of cash.

Mobil, the main producer, has been tripling its production in Equatorial Guinea every year since it started operations in 1996, currently producing more than 100,000 barrels a day. Even with low world oil prices, the gross domestic product of this nation of mostly illiterate subsistence farmers has skyrocketed. Since its population is less than half a million, there should be more than enough wealth to go around.

So far though, all that has changed for Mr. Mbeng and his neighbors is that a huge gas flare now lights up the night sky. They have no running water or electricity. The country remains on the United Nations list of least-developed nations; three-quarters of the population, it says, are malnourished.

The UN says that 80 percent of the wealth is being amassed by less than 5 percent of the population. Most of the 5 percent are members of longtime President Teodoro Obiang Nguema Mbasogo's family clan, who have held a tight grip on the country since it gained independence from Spain in the late 1960s.

The International Monetary Fund complains of widespread government corruption and mismanagement. Last year it calculated that the government received $130 million in royalties from oil, while the government claimed it only got $34 million. Members of General Obiang's family are said to be pocketing the difference. The French and Spanish press reports extravagant shopping sprees in Paris.

United States oil companies insist that Mbeng and his neighbors should hang in there. They claim that the oil money in Equatorial Guinea and other oil-rich countries in Africa does trickle down to the poor masses. "We believe that our operations play a significant role in improving social and economic conditions in many of these countries," says a Mobil spokesman.

The evidence, however, is that the massive amounts of cash that oil companies hand African governments often throw these countries into turmoil. "With weak political institutions, government officials tend to serve only the small-interest groups that put them in power," notes Leonardo Villalon, a political scientist specializing on Africa in Senegal.

In Nigeria, Equatorial Guinea's giant northern neighbor and the world's fifth-largest oil producer, successive regimes have taken turns misappropriating billions of oil dollars. Most of the population, meanwhile, remains as poor as those African countries that have no natural resources. The frustrations of locals in the Niger delta, Nigeria's main oil-producing region, have turned increasingly violent recently, with attacks often directed against foreign oil workers.

Wars currently raging in Angola, Equatorial Guinea's southern neighbor, as well as the two Congos to the southwest, are largely over who controls the oil and diamond wealth there.

The new oil wealth in Equatorial Guinea is already causing discontent, with at least two recent attempted coups d'tat and a rebellion by members of the disenfranchised Bubi ethnic group. The Bubis, who are the original inhabitants of the island near the oil reserves, have also now formed a separatist movement.

But opposition is ruthlessly squashed by the government. The UN Human Rights Commission reports that torture and political murder are routine and that the officials responsible enjoy "rampant impunity."

Instead, observers say the greatest risk to political stability comes from members of the president's family clan. Senior government officials are often seen publicly fighting turf battles.

European and UN diplomats also worry that the oil money is weakening their moderating influence. To some extent the government used to have to answer to Spain, its former colonial power, as it provided a large part of its revenue in the form of aid. But now that the government has unconditional US oil money, Obiang says that he will no longer allow Spain "to manipulate our internal politics and destabilize us."

The one oil-rich nation in central Africa that has maintained relative prosperity and stability since the 1970s is the former French colony of Gabon. There the French government and its oil company, Elf-Aquitaine, have maintained tight control. "Elf-Aquitaine tends to take a more hands-on policy than American oil companies in deciding who should be in power in Africa," says Bruce McColm, president of Institute for Democratic Strategies, a US based election monitoring group. But he notes that this in itself is undemocratic. In recent years France says it has relinquished control of its former colonies and privatized Elf-Aquitaine. The French oil company is also set to start operations in Equatorial Guinea soon.

(c) Copyright 1999. The Christian Science Publishing Society