Saving Africa through global extractive transparency crusade

NewsFlash:

Saving Africa through global extractive transparency crusade

Written by Sunny Oputa Tuesday, 11 January 2011 13:52

A popular African proverb says that it is unwise for one to use sputum to wash his face when he lives in the midst of an ocean. The proverb is synonymous to the poor living conditions of millions of Africans from resource – rich nations that wallow in abject poverty despite billions of dollars generated in their nations through oil, gas, and mining businesses. The aftermath of this condition which is classically known as “Dutch disease” and associated inequality in the distribution of wealth has been attributed to the increase in geopolitical risk and over all high cost of projects.

Increase geopolitical risk which sprouts from neo-revolutionary outlooks of the natives of producing nations and the culminating market volatility which often push the cost of projects beyond budget and sometimes fluctuate price of commodities has made it more apparent to all interested parties in the extractive business in Africa to know that it is no longer business as usual. It has become extremely germane for producing nations, foreign companies and investors to create plausible ways to make the extractive business attractive and beneficial to all stakeholders – communities, government, producers and investors.

It is no longer fictional to say that lack of transparency in the extractive industry on the part of governments of various nations, foreign companies, individuals (groups) caused the corruption stench that has been used severally to besmirch African business communities and the resultant deprivation of millions of Africans that wallow daily in poverty. The fusion of corrupt practices by various people, governments and some foreign operators is an absolute mark of inhumanity to man that has made countless millions mourn and nations ruined. When we talk about wealth of nations from the political economy prism of Adam Smith on the grounds of factors of production, we can as well consider the poverty of nations on the roles of some companies and individuals in diverting capitals meant for national developments to “unspecified” conduits.

The quest to do business at all cost without caring whose ox is gored and over ambitious latitude towards making humongous profits to satisfy shareholders instead of all stakeholders have made many foreign investors to jump the rope of ethics. When people prognosticate that it is sometimes very difficult to do business in Africa because of the corrupt leaders, they may not be far from the truth. However, in labeling the people and leaders of Africa to be corrupt and allow their foreign collaborators to wear the helmet of innocence is unjust and politically incorrect. This age long psychological warfare of dubbing most nations of Africa as corrupt without exposing the evil roles of their foreign collaborators allowed many companies to continue operating as angels of Africa, while they carted away profits beyond measure.

History has shown in various occasions that exploration and expedition has never been done for sake of charity. Adam Smith, the father of political economy in his wisdom said: “the butcher never went to the market because of the love of the consumer, but for profit.” Therefore, while blames are apportioned to corrupt regimes in Africa, the same blame should be apportioned to companies that collaborated with them in plundering the wealth. It is based on this that we should applaud the recent move to legally expose both government and companies that have engaged in various corrupt practices in the extractive industry to the detriment of the local population. And also the need to ensure that both governments and companies follow best practices in conducting business should be highly commended.

The move of most oil, gas and mining nations to become compliant with the Extractive Industries Transparency Initiative is a good sign, if they would live up to the EITI global standards for transparency in oil, gas and mining which are: “an effort to make national resources benefit all; a coalition of governments, companies and civil society, and a standard for companies to publish what they pay and for governments to disclose what they receive.” It sounds good, that almost all the big oil, gas and mining companies of the world and all rich nations of the world support EITI. Ironically, some of the companies that are been investigated for engaging or aiding corrupt practices are same Olympian companies from the supporting nations.

It is worthy for all hands to be on deck in the promotion of transparency in the extractive industry and all aspects of human endeavor. Corruption increases cost and pushes it back to the consumer. Bribery does not only jack-up the cost of operations; it ruins a nation in all aspects (politically, socially & economically). It also dents the global image of a country. It embellishes fairness and increase mediocrity. Corruption is an antithesis to quality. A corrupt mind is blind to the truth. A nation that cannot produce quality human capital, goods and services, is a doomed nation. To eradicate the world of poverty and heal Africa of “Dutch Disease” should be a global effort that should be done by seriously upholding the tenets of Extractive Industries Transparency Initiative and ensuring best practices in all we do.