Seneral's president calls for more equitable distribution of profits
Fund Africa's poor or face expulsion, oil firms told
November 15, 2006
By Pascal Fletcher
Dakar - Oil companies operating in Africa must plough part of their profits into fighting poverty there or risk being expelled from the continent by unrest and turmoil fuelled by inequality, Senegal's president said this week.
President Abdoulaye Wade said it was "indecent [and] immoral" that oil majors should be raking in multibillion-dollar profits from higher oil prices while poor, oil importing African states saw their energy bills increase by tens of millions of dollars.
He said he was proposing a formula to distribute oil profits more equitably between oil companies, oil producing African countries and non-oil producing states on the continent. "We can create a system where everyone wins."
Wade, who faces an energy crunch in oil-importing Senegal, where summer power cuts have badly hit economic activity and home consumers, said he presented his plan in the US last month to executives of Chevron and Exxon Mobil, which have extensive operations in sub-Saharan Africa.
He said he warned them about the dangers of ignoring poverty in Africa while reaping huge profits from its oil. "I said to the oilmen, you're free to carry on like that if you want. But in the long term, you'll be expelled from Africa."
The Senegalese president said the societies of some African oil producers were already showing signs of violent rejection of energy companies that failed to sufficiently share their oil profits. "It's started; bit by bit it will spread."
He gave no examples, but communities in Nigeria's oil-rich Niger delta have stepped up attacks and kidnappings, targeting foreign oil firms and their staff as part of a campaign to try to gain more benefits from oil production.
Wade said the US oil executives had accepted his argument and were willing to see how more could be done to fight poverty in Africa, using its oil.
He added that the continent needed massive investments in strategic infrastructure projects, such as a plan for a transcontinental railway linking Johannesburg to Dakar. Other suggested projects included a road and rail link stretching from Dakar in the west to Djibouti in the eastern Horn of Africa.
"The world has the means to do it; our partners have the means to do it," Wade said, pointing out that the US had completed such transcontinental rail projects across its own huge territory in the 19th century.
Wade also urged governments in Africa not to view the growing political and economic competition for the continent's trade and resources between China and the West as a threat, but as an opportunity to reap material benefits for their countries.
He rejected comparisons with the Cold War battle over Africa between the US and the Soviet Union in past decades, which spawned several proxy wars on the continent.
"Nobody's playing that game any more," he said, adding that commercial competition in Africa between the West and China was positive.
"It's up to Africa to manage that."
He praised what he called China's global, multifaceted approach to trade and co-operation, which he said was based on non-interference in domestic affairs and mutual benefit.
Asked about criticism that China turned a blind eye to bad government, corruption and human rights in its growing relations with Africa, Wade said he opposed human rights violations, but added: "That polemic is one thing, and our economic relation with China is another." - Reuters
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