Opinion - News Analysis   

The continuing scramble for Africa

Mandy Turner

TOWARDS THE end of last year, at Cape Town's swanky Victoria and Alfred Waterfront, businessmen and African politicians networked and closed deals. They were attending Africa Oil Week, a key annual event that attracts the energy sector's biggest players, such as ExxonMobil, Shell, and Chevron. One candidly named conference session, The Scramble for Africa, suggested the motives of those attending: to profit from the continent's wealth of natural resources.

With oil, gas, timber, diamonds, gold, coltan, and bauxite, Africa is home to some of the largest deposits of natural resources in the world. Revenues from their extraction should provide funds for badly needed development, but instead have fuelled state corruption, environmental degradation, poverty, and violence. Rather than being a blessing, Africa's natural resources have largely been a curse.

The 19th-century scramble for Africa saw the great powers rush to control land so they could exploit natural resources. Today, the scramble continues — the continent still a vital arena of strategic and geopolitical competition among the United States, France, Britain, China, and India. The key question for many is: will the exploitation of Africa's rich resources benefit anyone other than the continent's elites?

Most important lure

Oil is perhaps the most important lure, with competition between foreign states and companies to secure resources so intense it attracts more than 50 per cent of all foreign direct investment. Last year, annual foreign direct investment (FDI) rose to a historic high of $38.8 billion, exceeding record levels of 2005 — a growth of 78 per cent from 2004.

According to the U.N. World Investment Report, FDI cash was concentrated in a few industries, notably oil, gas and mining. And six oil-producing countries — Algeria, Chad, Egypt, Equatorial Guinea, Nigeria, and Sudan — hogged around 48 per cent of it. So, who's investing?

European firms represent roughly two-thirds of the total FDI in Africa. More than half of European investment originates from the U.K. and France, going mainly to countries with which they have historic ties. French oil companies such as Total, locked out of the Middle East through France's opposition to the Iraq war, have made large investments in Francophone countries such as Cameroon, Chad, and Gabon.

The U.S. is interested in the region as a cheap and reliable alternative to the increasingly volatile Persian Gulf. West Africa already supplies about 12 per cent of U.S. crude oil imports, and America's National Intelligence Council predicts that this share will rise to 25 per cent by 2015. As is often the case with oil, military involvement follows behind trade. In February this year the U.S. set up an Africa command (Africom). It has established bases in and signed access agreements with Senegal, Mali, Ghana, Gabon, and Namibia. Africa is becoming strategically important to the U.S. because of its oil production and China's increasing regional influence.

Despite its own big backyard, as it were, China is generally resource-poor and Africa offers the natural resources vital to fuel its rapidly growing economy. China looks to the Democratic Republic of Congo (DRC) and Zambia for copper and cobalt, to South Africa for iron ore and platinum, and to Gabon, Cameroon and the Republic of the Congo (Congo-Brazzaville) for timber. For oil, it has been wooing Nigeria, Angola, Sudan, and Equatorial Guinea. China is now the second largest consumer of crude oil after the U.S., and was responsible for 40 per cent of the global increase in demand between 2001 and 2005. It imports 25 per cent of its crude oil from Africa.

Beijing has charmed African rulers with a triple whammy of arms sales, cancelled debt, and soft loans. Last year, President Hu Jintao and Prime Minister Wen Jiabao visited 10 African countries, and this increasingly intimate relationship was consummated at the China-Africa summit in October, when Beijing rolled out the red carpet to almost 50 African heads of state and Ministers.

The global demand for natural resources will bring benefits to Africa — increased FDI and, as exports grow, improving balance of trade figures — but one of the main concerns is that the scramble for Africa is fuelling corruption, environmental degradation, and internal dissent. Salil Tripathi, senior policy adviser at International Alert, a peace-building NGO, says: "Unless properly managed, the windfall gains from resource extraction cause more problems. It reduces a state's incentive to impose a free and just taxation system, and encourages corruption and acquisition of weaponry."

Those problems include human rights abuses, which the great powers scrambling for African resources seem happy to tolerate. In Equatorial Guinea — where U.S. companies such as ExxonMobil and Chevron are active — the regime of President Teodoro Obiang Nguema has been accused of torture, electoral fraud, and corruption. Despite this, President Nguema was welcomed at the U.S. State Department by Secretary of State Condoleezza Rice in April last year and described as a "good friend."

The environmental impact is also alarming. The clearing of forests for timber exports increases vulnerability to erosion, river silting, landslides, flooding, and loss of habitat for plant and animal species. Gas flaring from oil production, where unusable waste gas is burned off, pumps large amounts of carbon dioxide into the atmosphere. It is estimated that flaring in the Niger delta emits 70 million tonnes of CO2 a year. (Sweden emitted 69.9 million tonnes of CO2 in 2004.)

The environmental and social impact of extractive industries is already acknowledged as a key factor in conflicts in Sudan and Nigeria. There is a fear among NGOs that access to natural resources will fuel the kind of violent conflict seen recently in Sierra Leone, the DRC, and Liberia.

A number of initiatives have recently been launched in an attempt to deal with the "resource curse," including the U.N.'s Global Compact and the Extractive Industry Transparency Initiative (EITI). Such moves are welcome, says Sarah Wykes, a senior campaigner at Global Witness, an NGO that campaigns for better natural resource governance, but they are voluntary codes of conduct, and many companies and countries have not signed up to them — notably China.

"Northern transnational corporations may not themselves always be shining champions of corporate best behaviour, but it is clear that Asian state-owned companies do not have the same corporate governance regulations," Ms. Wykes says. "China's Africa policy explicitly states that economic assistance will be given with `no strings attached.'"

Charities and NGOs working on the issue believe that even governments that are members of the Organisation for Economic Cooperation and Development (OECD) are reluctant to investigate allegations against western companies of corruption or complicity in human rights abuses. What is needed, says Mr. Tripathi, are more effective regulatory mechanisms. "We need identifiable universal standards, and law, if necessary, to regulate the conduct of companies, particularly to prevent grave abuses of human rights," he says.

So far, there's not much evidence that it is taking place — so this century's scramble for Africa could be as undignified, and as deadly, as the last.

(Mandy Turner is an honorary visiting research fellow in peace studies at Bradford University, U.K.)

— © Guardian Newspapers Limited 2006

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