Washintgon — Governments in sub-Saharan Africa are selling crude petroleum in shadowy deals worth hundreds of billions of dollars without publicly accounting for the money, according to a new report.
A lack of transparency over staggering amounts of oil revenues is concerning from countries that have millions of people living in dire poverty, weak budgetary oversight, long track records of corruption, Institute said.
Its research found that sub-Saharan Africa’s top 10 oil-producing countries have sold more than $ 254 billion in crude through their state-owned oil companies over the past three years – equivalent to 56 percent of their combined government revenues, it said in its “” report released on Monday.
Among the biggest purchasers were mega Swiss commodity traders, including Glencore, Arcadia and Trafigura, which snapped up one-quarter of the sales between 2011 and 2013, the institute said in calling for new regulations for nationally owned oil companies and big trading firms to disclose their oil deals.
The sales to Swiss traders were worth an estimated $ 55 billion – more than twice as much money as these 10 countries – Angola, Cameroon, Chad, Côte d’Ivoire, Republic of Congo, Equatorial Guinea, Gabon, Ghana, Nigeria and South Sudan – received in net foreign aid, it said.
“The payments made by Swiss companies generate a significant portion of public revenues in some of the world’s poorest countries, and are subject to governance risks as they take place in environments of weak institutions and widespread corruption,” it said.
The push from Natural Resource Governance Institute is part of its broader efforts to expand the transparency rules for oil, gas and mining as it presses governments to account for how they spend their resource wealth. Currently, more than 1 billion people live in dire poverty in resource-rich countries.
PAYMENT DISCLOSURE
So far global regulations for resource extraction payments have focused on publicly traded companies. They do not cover all aspects of resource agreements with a government, including oil provided to a national company for future sale.
Switzerland is considering new regulations on extractives disclosure for natural resource companies, but the regulations are modeled after similar rules in the European Union and the United States and would not cover commodity trading firms and their deals with national oil companies.
