Oil fails to enrich Equatorial Guinea

The shiny four-wheel-drive cars cruising Malabo’s streets are a daily reminder to Balbina Asie Peliko that oil has brought wealth to some in Equatorial Guinea.

The US is the largest investor in Equatorial Guinea
The US is the largest investor in Equatorial Guinea

To her, oil has just brought more misery.

“What used to be cheap, has doubled in price,” she said, squatting beside banana bunches and cocoyam stacked in the market of the tiny central African state’s island capital.

Asie Peliko has waited for hours under the blazing sun, hoping to sell fruit from her village. With the money she hopes to get soap, rice or some second-hand clothes for her children.

“We feel abandoned to poverty. While people talk about oil wealth we do not see anything for our children,” she said.

Massive offshore oil discoveries in the last decade have boosted Equatorial Guinea‘s production from next to nothing to about 350,000 barrels per day, making it sub-Saharan Africa’s third largest producer after Nigeria and Angola.

With prices soaring, oil exports are bringing a flood of money to the former Spanish colony.

Last year, Equatorial Guinea grew by 34%, according to the International Monetary Fund, making it the world’s fastest growing economy.

But many of the country’s 500,000 inhabitants feel they have yet to reap the rewards.

Failure to curb poverty

Equatorial Guinea slid down the United Nation’s development list this year by 12 places to 121 – a measure of President Teodoro Obiang Nguema Mbasogo’s failure to curb poverty.

“What used to be cheap, has doubled in price. We feel abandoned to poverty. While people talk about oil wealth we do not see anything for our children”

Balbina Asie Peliko,

That may change. In July, Obiang approved the creation of a fund meant to earmark a tenth of oil revenues for priority social spending.

The government says it is already spending more on health care, education and infrastructure, but that Malabo‘s booming population has frustrated efforts to improve conditions.

The capital has doubled in size during the oil boom, as people have flocked from the mountainous jungle mainland to the lush volcanic island of Bioko where Malabo is located.

For those seeking a share of the oil riches, the city’s sprawling slums are a bitter disappointment.

A short distance from the centre, the shacks of the Ela Nguema shantytown often have mud floors and no running water or electricity.

No grassroots effect

“We are being left to fate, as we have no way of benefiting from the oil boom,” said Fabiola Mbasogo, a market seller who travelled to Malabo in a raft from the mainland.

Obiang and his family have kept a firm grip on power since he deposed and executed his despotic uncle in 1979.

Dissent has been suppressed and security services are guilty of serious human rights abuses, including beatings and torture, according to the US State Department and rights groups such as Amnesty International.

The authorities blamed oil wealth for triggering a coup attempt in March 2004.

Dozens of foreigners were accused of being involved, including the son of former British Prime Minister Margaret Thatcher.

The subject of corruption is taboo in Equatorial Guinea‘s tightly controlled media. But Obiang’s administration has been criticised abroad for misusing the country’s oil riches.

The Transparency International watchdog ranked Equatorial Guinea as the seventh most corrupt country in the world, in its 2005 survey of 159 countries.


Obiang’s administration has launched a lobbying campaign in Washington to improve its image after a 2004 Senate report found that the president and his family received huge payments from US oil companies like Exxon Mobil and Amerada Hess.

“The oil companies in Equatorial Guinea are using Guinean houses, Guinean vehicles, and Guinean land and naturally these are services they are paying for,” said Miguel Oyono Ndong, the deputy prime minister who is close to Obiang.

The findings emerged from an inquiry into Washington-based Riggs Bank, which held accounts from Equatorial Guinea in excess of $700 million, making it the bank’s biggest account holder.

“We have called on the US Senate to prove where the acts of fraud are,” Oyono Ndong told Reuters, saying funds from Riggs Bank had been moved to the Bank of Central African States and would be used for infrastructure projects.

Margaret Thatcher’s son, Mark,was involved in the failed coup

Margaret Thatcher’s son, Mark,
was involved in the failed coup

While the IMF criticised Equatorial Guinea for spending only 1% of its budget on health care in the five years to 2002, the government says health now accounts for a tenth of the budget – meeting the World Health Organisation’s requirements.

The IMF accepts that the government has made steps towards making clear how oil revenues are being spent.

World Bank President Paul Wolfowitz recently praised Obiang’s government for seeking advice on how best to spend its new-found oil wealth.

US oil interests

Despite concerns over rights abuses and graft, Washington reopened its embassy in Equatorial Guinea in 2003 after an eight year-break.

The United States, which is the largest investor in Equatorial Guinea, hopes the Gulf of Guinea will supply a quarter of its energy requirements within a decade, versus 14% now.

But for many ordinary people in Equatorial Guinea just finding enough food has become a daily struggle.

As oil dollars have flooded in, the country is relying more and more on food imports from neighbouring Cameroon.

Three-quarters of the people suffer from malnutrition and the average life expectancy is 49, according to London-based charity War on Want.

“We all hear of Equatorial Guinea as a rich country, but in reality only a few people enjoy this common wealth,” said Juan Obiang, a public sector official.

Source: Reuters

More from News
Most Read