Houston Chronicle: Oil equals influence, Africa finds

Despite poverty and strife, demand opens doors with China, the West

By EDWARD HARRIS
Associated Press

PORT HARCOURT, NIGERIA — Europe’s great powers once scrambled for dominance across vast, underdeveloped African lands rich in raw resources including the scarlet palm oil used to grease the first cogs of the industrial revolution.

A century later, a new group of nations are competing for a different valuable, viscous material, with sub-Saharan Africa closing in on the Persian Gulf as the prime overseas supplier of oil to the last remaining superpower.

The continent has its greatest international influence in decades as China and India increasingly prospect for resources in Africa, terrorism concerns rise and the U.S. military seeks a permanent military presence. Whether Africa can use its newfound might to end its longtime blight is a separate issue.

“There’s a new dynamic in play” for African nations, says Antony Goldman, an independent risk-analysis consultant based in London. “And the challenge for those countries is how to manage that.”

Growing reliance

In 1993, the earliest year for which there are full figures, the main African oil-producing countries — Nigeria, Angola, Cameroon, Chad, Equatorial Guinea and Gabon — shipped 494,000 barrels per day of oil to the United States, data from the official Energy Information Administration show. That’s about 7 percent of total U.S. imports. In the same year, the Persian Gulf nations averaged 1.6 million barrels per day, or about a quarter of all U.S. imports.

By 2006, sub-Saharan African oil constituted about 18 percent of all U.S. imports, or about 1.8 million barrels per day; the Persian Gulf made up 2.2 million barrels per day, or 21 percent of total daily imports.

But the oil producers are among the sickest countries in Africa. While poorer nations have made democratic advancements, the oil countries are still mostly run by weak or illegitimate leaders.

Angola is emerging from one of the continent’s longest-running civil wars. Chad is in the depths of one. Oil-rich Cameroon’s president has been in power for a quarter of a century.

Next door is Equatorial Guinea, where per-capita gross domestic product is among the highest in the world, while its ranking on the United Nations human-development index is near the bottom.

And then there is Nigeria, where the challenges facing Africa, and particularly its petroleum producers, are on desperate display. Nigeria is Africa’s biggest producer of oil and among the top three outside suppliers of crude to America.

A tragic history

Despite hundreds of billions of dollars of oil revenues, some 70 percent of Nigeria’s population of 140 million live on less than $2 per day, U.N. figures show. Much of the oil money has been stolen by corrupt leaders or misspent on wasteful government boondoggles. In Nigeria alone, the World Bank estimates about $300 billion of government oil funds are unaccounted for.

Today, none of Nigeria’s main oil refineries are operable, leaving one of the world’s top oil producers completely reliant on fuel imports.

Military leaders or weak corrupt administrations have racked up tens of billions of dollars in loans, many by Western countries or their funding bodies hoping to set up bulwarks against communism in Africa.

As the Cold War ground to a halt in the 1980s, the easy loan money stopped flowing, and markers were called in. Overseas governments began insisting good governance be linked to aid.

While few Africans lived in multiparty democracies in the 1970s, most do today. But in many of those countries that hasn’t translated into better daily existences for the people.

Democracy encouraged by the West hasn’t made much improvement in his life, says John Isah-Aaron, a 32-year-old fisherman constructing his new home next to open latrines on a riverbank in wetland region where militant attacks have cut oil output by nearly one-third. Nigeria’s civilian leaders have proved as corrupt as the military junta they replaced.

“They’re saying democracy is government for the people, by the people. But we’re not seeing any dividends,” he said recently in his village just outside a compound run by the Italian oil-company Agip.

New chances

Nigeria’s oil industry, like those of many other African countries, is primarily run by Western energy concerns, including Royal Dutch Shell, Total, Eni and Chevron Corp.

But increasingly, China and India have been moving in, too. Much of Africa’s estimated 5.5 percent economic growth last year was attributed to China’s near-insatiable demand for the continent’s oil, gas, timber, copper and other natural resources. At the same time, the United States is ramping up in Africa. After the terrorist attacks on Sept. 11, 2001, diminishing reliance on oil from the Middle East has become a stated goal of the U.S. government.

Washington recently announced it intended locate a permanent military command for Africa on the continent.

“Overall, Africa is growing in global strategic importance, and setting up this command allows us to help them help themselves in enhancing security in their countries, and across the continent writ large,” said Navy Rear Adm. Bob Moeller, who’s helping arrange the new command, in a recent telephone interview with the Associated Press.

Analysts say all this gives Africa a new shot at ending decades of disease, wars, corruption and, above all, the poverty that drives it all.

While graft, poorer educated populaces and inter-community strife still typify many African nations, they are looking better each day for the West compared with other oil-rich nations, like Iran and Venezuela.

“Before, on a day-to-day basis, places like Nigeria seemed like a bad bet,” said Goldman, the London-based analyst. “Now people would prefer the day-to-day problems of Nigeria compared with those of the Middle East.”

Peter Pham, a professor of international relations at James Madison University in Harrisonburg, Va., said, “If 9/11 taught us anything, it’s that weak nations can cause threats,” he said. “There’s an interest in building up the capacity of African states to handle their own problems, provide services for its people.”

It all adds up to a rare moment of potential influence for Africa, he says, but only if African leaders can at last end their own self-enrichment at the expense of their people.

July 7, 2007, 12:02AM

http://www.chron.com/disp/story.mpl/business/4949862.html