New Report: The Anatomy of the Resource Curse: Predatory Investment in Africa’s Extractive Industries
My colleague, J.R. Mailey of the Africa Center for Strategic Studies, just published The Anatomy of the Resource Curse: Predatory Investment in Africa’s Extractive Industries. Full disclosure: I haven’t read the report in its entirety, but I’ve seen J.R. brief on this topic and know the investigative and analytical work that went into producing it, so I’d highly recommend reading it. A summary is below:
With more than 20 countries possessing bountiful oil and mineral deposits, Africa is home to more resource-rich states than any other region in the world. If accountably governed, natural resource wealth could be a boon to a society, enabling valuable investments in infrastructure, human capital, social services, and other public goods. Yet, living conditions for most citizens remain dismal as a result of inequitable distribution of resource revenues. Natural resource wealth is also strongly associated with undemocratic and illegitimate governance. Roughly 70 percent of the world’s resource-rich states are categorized as autocracies. This pattern is not a coincidence. The steady flow of natural resource revenues funds the patronage and security structures these governments rely on to remain in power without popular support. Nearly without exception, Africa’s resource-rich states also exhibit high levels of public sector corruption. States heavily reliant on the export of oil and minerals, moreover, face a greater risk of civil conflict than their resource-poor counterparts.
This report examines these linkages by tracking the practices of one group of investors that has been particularly active on the continent since the early 2000s: a Hong Kong-based consortium known as the 88 Queensway Group. Cultivating relationships with high-level government officials in politically isolated resource-rich states through infusions of cash, promises of billions of dollars in infrastructural development, and support for the security sector, Queensway has been able to gain access to major oil and mining concessions across Africa. Starting in Angola in 2003, Queensway has been engaged in the extractive industries in at least nine African countries, including Guinea, Madagascar, Tanzania, and Zimbabwe.
Contracts—often in the billions of dollars—between Queensway-affiliated companies and African governments are rarely made public. The syndicate’s leaders have forged deals found to be unfavorable to the respective countries as a whole by appealing to the short-term interests of those senior officials controlling their countries’ natural resources. Queensway’s collaborations with the governments of Africa’s resource-rich states have often failed to improve citizens’ living standards. Promised high-profile infrastructure construction projects regularly fail to materialize. Allegations of corruption among senior government officials who control natural resource contracts are widespread. Reputable extractive firms are cut out of the market, undermining the long-term health of the resource sector. And unaccountable governments are able to persist, propped up by the infusion of financial and material support to the regimes in power.
Queensway’s business model persists in Africa and elsewhere because of weaknesses in domestic and international oversight structures. First, at the national level, predatory investors operate in environments where the institutions needed to hold public officials and international corporations accountable are often absent. Second, failure by the governments of countries of origin (“home countries”) to regulate the overseas activities of corporations anchored in their jurisdictions helps these firms escape scrutiny. Third, the international legal and institutional framework for dealing with corruption and exploitation in the extractive industries by multinational corporations is deficient. The use of anonymous shell companies anchored in these jurisdictions prevents outsiders—potential business partners, banks, regulators, and law enforcement officials—from identifying who truly controls and benefits from the operations of unscrupulous corporations.
You can find the full text of the report here: http://africacenter.org/2015/05/the-anatomy-of-the-resource-curse-predatory-investment-in-africa%E2%80%99s-extractive-industries/
Following last month’s presidential elections in Nigeria, I joined Karen Attiah, Lauren Bohn, and Chika Oduah in a Google Hangout to discuss the country’s democratic evolution, narratives on Nigeria, Boko Haram, and U.S.-Nigeria relations. Hilary Matfess decided to join in on the fun to discuss her recent trip to Nigeria and interviews of people displaced by Boko Haram violence.
Check out the full video of our chat below:
Nigeria’s elections, previously due to be held last month, are being held in the coming weeks. So you know what this means – a list of recommended readings!
But before you applaud, a brief background:
Presidential elections, as well as those for the Senate and National Assembly will be held on March 28, while elections for governors and state assemblies will be held on April 11. In the presidential race, there is the possibility of a runoff if candidates fail to secure more than 50% of the national vote plus at least 25% of the vote in 2/3 of Nigeria’s states (or 24 of 26 states).
Enter the analysis I’ve been reading to get smart on #NigeriaDecides:
In January, the National Democratic Institute and the International Republican Institute released a Statement of the Joint NDI/IRI Pre-Election Assessment Mission to Nigeria, detailing major issues affecting the political environment, challenges specific to the 2015 polls, and Nigerian-led initiatives to address these challenges.
After the elections were postponed, Nigerian novelist Chimamanda Ngozi Adichie penned Democracy, Deferred, and International Crisis Group posted and Nigeria’s Elections: A Perilous Postponement. (For additional background, see previous ICG reports Nigeria’s Dangerous 2015 Elections: Limiting the Violence and Curbing Violence in Nigeria (II): The Boko Haram Insurgency). In addition, in Democracy is Taking Root in Nigeria, Uchenna Ekwo argued that Nigeria’s democracy is challenged, but growing stronger.
African Arguments’ Nigeria Forum has been hosting a wide array of contributors, notably Incumbency and Opportunity: forecasting Nigeria’s 2015 elections by Zainab Usman and Oliver Owen and In the event of a Buhari win by Tolu Ogunlesi. Outside of African Arguments, Alex Thurston cautioned Don’t ignore Nigeria’s gubernatorial elections.
Some analyses tried to deconstruct the over-simplification of the country’s internal divisions, like Tolu Ogunlesi’s Nigeria’s Internal Struggles or unravel the dominant narratives on the primary presidential candidates Goodluck Jonathan and Muhammadu Buhari, such as Alex Thurston’s Nigeria’s Elections: Beyond “The Bumbler vs. the Thug”.
AfroBarometer released Nigeria’s pre-election pulse: Mixed views on democracy and accountability, with public opinion polling on Nigerians’ views on the quality of democracy in the country, support for legislative oversight, trust of elected leaders, religious leaders, and executives, and accountability of elected leaders.
Regarding Boko Haram and its connections to global jihadi movements, the Nigeria Security Network released Special report: The end of Boko Haram?, Hilary Matfess argued that Boko Haram is not al-Qaeda, and Obinna Anyadike (quoting Ryan Cummings and Jacob Zenn, who’ve written extensively on Boko Haram) tackled the question What does the Boko Haram/IS alliance mean?.
Regional security initiatives against Boko Haram are just getting off the ground, so I haven’t found assessments (aside from news articles) of ongoing operations. In the mean time, Celeste Hicks has written on Chad’s role in the region in Clay Feet: Chad’s Surprising Rise and Enduring Weaknesses.
Davin O’Regan has analyzed The Geography of Boko Haram: More Deadly but More Remote, while the following sources have been tracking violence in Nigeria:
- Nigerian Social Violence Project at SAIS
- Nigeria Security Tracker at CFR
- Armed Conflict Location and Event Dataset Conflict Trends Report
As 2014 drew to a close and most of the Chibok girls were still missing, Alexis Okeowo asked As the year ends, where are Nigeria’s kidnapped girls?. Chika Oduah also wrote on the human impact of Boko Haram in Executions, beatings and forced marriage: Life as a Boko Haram captive. See also the UN’s Office for the Coordinator of Humanitarian Affairs (OCHA) Nigeria: Displacement – Humanitarian Snapshot (as of 10 March 2015).
On U.S. policy in Nigeria in context of elections – including details on increasing support to the country’s Lake Chad Basin neighbors – see Nigeria’s 2015 Elections and the Boko Haram Crisis by Lauren Ploch Blanchard.
There’s many more analyses out there, but this is all I’ve had time to digest, so eat, read, and be merry.
On my About Me page, I alluded to the possibility of writing about my experience traveling in Africa – to add an entertaining counterweight to my more analytical rants and musings on the events unfolding on the continent. The following is a story about an awkward experience I had while trying to get an interview for a project some years ago:
In the District of Columbia, one normally needs an appropriate badge, or even an escort, to access some U.S. government facilities. This is the world with which I am most familiar – and the world that, for better or worse, I project on my experiences entering foreign government facilities.
It is for this reason that I failed to ask for directions when I was doing a drive by of a national security establishment in African Country X in an attempt to make an appointment to interview someone. After showing my passport and explaining to the front desk why I was there, I was directed to walk across the yard to my left and into one of the identical white buildings. I was like, you’re just going to let me wander around your premises? I don’t need a badge or an escort? And the guy was like, that sounds about right.
So wander I did.
I stopped at Ambiguous White Building #1. Looked for signage. Seeing none, I opened the door to what appeared to be a kitchen. I continued to Ambiguous White Building #2. Looked for signage. Seeing none, I opened the door to a non-descript storage area. Frustrated, I wandered around that upper left quadrant of the compound where the front desk guy had told me to go and weighed the merits of returning to him for idiot-proof directions.
Finally, an important looking guy and his entourage spotted me. From that distance, I couldn’t tell what he was saying, but I assumed it was the vernacular equivalent of “What the (insert expletive here) is she doing?!?” The entourage summoned me over and I explained why I was this random American wandering around their national security facility. They directed me to Ambiguous White Building #3, which was not a kitchen or a storage area, but the office of the minister I was
stalking attempting to interview.
This, my friends, is how I learned to always ask for an escort to avoid such shady appearances – even if one isn’t required.
This is a guest post by Christopher O’Connor, Assistant Program Officer for Nigeria at the National Endowment for Democracy. The views expressed are his own, and do not necessarily represent the views of the National Endowment of Democracy.
To the dismay of the opposition All Progressives Congress (APC) and a sizable portion of the electorate, Nigeria’s Independent National Electoral Commission (INEC) held a press conference on February 7 announcing that the federal elections originally scheduled for February 14 would be postponed for six weeks citing security concerns. To many, this eleventh-hour delay comes across as a gambit by the governing People’s Democratic Party (PDP) to improve their electoral chances, and one more likely to exacerbate, rather than improve, election security. Despite this setback, the 2015 elections have been shaping up to be the most competitive, and potentially the most democratic, since 1999. INEC’s decision to postpone the polls need not undermine this potential if civil society, the international community, and the Nigerian public demand that the political parties, the electoral management bodies, and the security services respect Nigeria’s democratic spirit and serve the needs of the people.
For the past year, Nigerians and the international community alike have debated the challenges that Nigeria needs to overcome to conduct free, fair, and credible elections in 2015. There are deep and warranted concerns about rampant corruption, elite factionalization, the electoral commission’s capability to conduct elections, and widespread insecurity that serve to undermine both Nigeria’s democracy and its electoral process. In particular, the Nigerian state has all but relinquished control of large portions of Adamawa, Borno, and Yobe states to the Boko Haram insurgency. So concerning is this security crisis that Chad has launched military offensives into Borno State in the past two weeks. Whether a proposed international task force will get off the ground, and if so, how it will impact security, is yet to be seen. Nevertheless, in 2015 Nigeria has three major preconditions for democratic elections in place: competitive political parties, an engaged electorate, and a competent and neutral electoral management body.
With the emergence of the APC, an amalgamation of several regionally based political parties, the ruling PDP has lost its monopoly on power at the federal level. Against all odds, the APC avoided the pitfalls of previous opposition alliances and successfully established a national campaign, with a presence in most states. It organized transparent primaries through which it nominated former military dictator Major General Muhammadu Buhari as its presidential candidate. The PDP has endorsed incumbent President Goodluck Jonathan. On the surface, the stage seems to be set for a rerun of the 2011 election, with Buhari carrying the Muslim-majority north and Jonathan carrying the Christian-majority south. The political calculus, however, has changed, because Buhari now has a southern support base.
Although identity politics still matters, Nigerians from all geopolitical zones are also asking who is more competent and who has better ideas, rather than who is from which state or who practices which religion. The electorate is better mobilized and informed in 2015. While the press and public have leveled sensational accusations at both sides, there have also been substantive debates about the candidates’ track records. Recent polling suggests that the electorate is roughly evenly divided between Buhari and Jonathan and their respective parties. As in all political systems, Nigerians may have reservations about the candidates on the ballot, but that has not prevented tens of millions from registering to cast their ballots. INEC has stated that over 45 million out of approximately 68 million registered voters have picked up their Permanent Voter Cards (PVCs). Whether in Lagos, Warri, Jos, or Kano, there is palpable excitement about the elections. For the first time, many Nigerians feel their votes will actually count, that their voices will influence the decisions made in Abuja, the federal capital city. In some cases, voters may feel they have even more of a say at the state level; however, this arguably depends on state.
By most accounts, including those of APC and PDP supporters, INEC is fulfilling its mandate in a capable and neutral manner. It has purged fraudulent names from the voter registries. PVCs and electronic card readers are making it more difficult to tamper with ballots. At times, civil society has expressed concern about INEC’s shortcomings, but INEC has proven itself responsive. It has worked hard to improve voter card distribution and to address the voter registration of internally displaced people, two of civil society’s biggest criticisms. In the past few weeks, INEC has also sought to improve communication with the broader Nigerian public to assure them of its ability to conduct free, fair, and credible elections.
While INEC abruptly postponed the elections at the behest of the security services only a day after it stated that it could conduct credible elections despite security concerns, the security of the Nigerian people during the elections is a valid concern for both INEC and the Nigerian government. Moreover, INEC is within its constitutional right to delay the election, and it needs the support of the security services to hold the elections. Motives aside, the government also played by the rules in pushing for a postponement.
The postponement does not have to irreparably damage the credibility of the elections, but it begs a few questions for which civil society and the international community need to push for answers:
- Why did INEC, or the Jonathan administration, wait until the week before the elections to announce a postponement?
- If security concerns are the main impetus for the delay, what happens if the security situation fails to improve prior to the new election date?
- How can INEC guarantee that elections will not be delayed again, or indefinitely?
INEC and PDP must provide credible answers to these questions. Regardless, civil society and the international community still have the opportunity and the responsibility to ensure that this postponement does not derail or undermine the elections. The United States has already criticized the delay, voicing its concern about potential future delays. It is imperative for civil society and international actors to guarantee an impartial INEC moving forward, one fully in control of the election process, without dissent from the political parties or the security forces. Additional delays or interference would significantly undermine the credibility of the elections.
Questions and criticisms aside however, the postponement has a silver lining. INEC now has additional time to ensure its electoral management is as strong and voter participation is as high as possible. The Jonathan administration has a chance to prove it can deliver on its security promises. A tempered response from the APC might strengthen its hand, painting the party as responsible and committed to the nation’s democratic structures, while a rash response would undermine its support. Civil society and the international community will be instrumental in urging restraint from Buhari’s camp. So far, it appears that APC is heeding calls for restraint.
Nigeria’s elections were never going to be easy, and they have just become more complicated. But postponed does not necessarily mean fraudulent, unfair, or undemocratic. It raises the specter of electoral malfeasance and violence, but it does not preordain it. Civil society, the international community, and the Nigerian public must work to ensure that today’s obstacles are overcome and transformed into opportunities, and that INEC can deliver elections wherein Nigerians chart their own democratic future. Nigeria is a resilient, pluralistic, and optimistic society. It is during times of adversity that Nigerians can reaffirm that tomorrow will be brighter.