Six Questions for Nicholas Shaxson on African Oil and American Foreign Policy

By Ken Silverstein

West Africa is now a major source of oil for the United States, and African-born journalist and researcher Nicholas Shaxson has made the oil-producing nations of west Africa his beat. Since 1993 he has written for publications such as the Financial Times, Reuters, The Economist, and Africa Confidential, and he is the author of the newly released Poisoned Wells: The Dirty Politics of African Oil.

1. What's driving the newfound American interest in African oil?

Angola and Nigeria alone will account for nearly half of all the growth in OPEC output this year, and America is currently importing as much oil from these two countries as it is from Saudi Arabia and Kuwait. Within five years or so, West Africa will probably account for a quarter of U.S. oil imports. Around the world, oil companies have been locked out of the best oil and gas provinces, from Venezuela to Russia to Iran. As Dick Cheney put it: “The good Lord didn't see fit to put oil and gas only where there are democratic regimes friendly to the United States.” West Africa is mostly friendlier than Iran or Venezuela; its oil is mostly light and sweet—ideal for making motor fuels—and production is surging. It's hardly surprising the region is attracting a lot of American interest now.

2. Has American government and corporate involvement had any positive effect in reducing corruption or poverty?

Attitudes are changing. There's growing awareness of environmental problems as well as rising interest in “corporate social responsibility,” so it's a bit harder for oil companies these days to behave like colonial overlords. We are also beginning to understand the reasons for the “oil curse”—countries that strike oil tend to get poorer and more violent over time. But are things really getting better? In 2004 I broke a story involving western mercenaries who had been caught trying to launch a coup in oil-rich Equatorial Guinea. Curiously the governments of the United States, Britain, and Spain all had advance warning of the plot, but seem not to have tried seriously to stop it. Despite this new interest in the “oil curse”, old habits and temptations will always remain, because of the lure of oil.

3. The new Chad-Cameroon pipeline, which was backed by the World Bank and is headed by an ExxonMobil-led consortium, was described as a model project that would set the standard for honest energy development. How has that worked out?

The World Bank gave the project its support, and built in safeguards to prevent mismanagement, calling it “an unprecedented framework to transform oil wealth into direct benefits for the poor.” People in Chad were hopeful too: one villager took a bath in beer to celebrate a compensation payment he received from the project. But now there is more conflict in Chad. This is a pattern in oil zones. Villagers fight each other for compensation or jobs, and politicians fight each other for access to the oil money. Rebel groups have recently been fighting the army, and the struggles are tangled up with the mess in Darfur province in neighboring oil-rich Sudan. A German parliamentary report in January concluded that the project had not solved the problems, but instead seems to have provoked “a creeping deterioration in living standards.” Western schemes to “guide” Africans to behave better often fail, because African rulers—especially oil-rich ones—tend to be quite good at mastering their own destinies nowadays. We can best help by making changes at home. One way is to curb our fuel consumption. Another matter cropped up repeatedly during my 14 years of research: the draining of Africa's wealth into rich-world tax havens. Current transparency initiatives don't touch this issue; but instead we pretend that it's only the Africans who are corrupt. Don't forget that New York and London, swimming in foreign dictators' loot, are two of the world's biggest tax havens.

4. The three biggest oil exporters in West Africa are three governments known to be corrupt: Nigeria, Angola and Equatorial Guinea. Can energy development in those countries realistically be expected to benefit regular citizens?

I met an old man once in a town called Kuito in Angola, which was badly smashed up by fighting, and asked if he'd seen benefits from the offshore Kuito oilfield, which Chevron had named after his town. The old man simply raised his hand above his head, palm down, to show how far out of his depth he was with my question. In America, the idea of “no taxation without representation” underpins democracy and capitalism. But in Angola, rulers tax oil companies, not citizens; so they can be as corrupt as they like, oppress or forget about their subjects, and still wallow in oil money. This is close to the heart of the problem with oil. There is a theoretical way around this—if oil money could be distributed directly and equally to everyone, then rulers would tax citizens, not oil companies, the old man in Kuito might be in a better position to demand representation in exchange for his taxes, and people would have less reason to fight for the spoils. This system works well in Alaska, but could it work in Africa? Many people think it is impossible, but perhaps ways might be found one day.

5. A CIA official once told me that the consensus among Nigerians was that the country would have been better off if the oil was still in the ground. Has oil really been so detrimental to African countries that they'd be better off without it?

Angola's oil-laden budget this year is about the same size as all foreign aid to all of sub-Saharan Africa—but according to the United Nations, Angola's infant mortality is the second worst in the world, worse even than Afghanistan's. At the start of the last oil boom in 1970, one-third of Nigerians lived in poverty; now, four hundred billion dollars in oil and gas earnings later, two-thirds are poor. People often put the problem like this: oil money would be a blessing but politicians steal it, so people don't see the benefits. But it's much worse: the oil wealth not only doesn't reach ordinary people, but it actively makes them poorer. It took me years to really accept this counter-intuitive idea. But after all I've seen, I have no doubts.

6. You're clearly fascinated by President Omar Bongo of Gabon. Why do you find him so interesting?

For decades Bongo was a guardian of what was, in a sense, the biggest secret in Africa: a giant offshore slush fund, fed by African oil and hooked up to tax havens. It secretly financed and corrupted the main French political parties, the intelligence services, and provided bribes in pursuit of French diplomatic, economic and military objectives around the world. Several hundred French troops protected Bongo against coups, and his secret influence in French politics was staggering. Could anything like this happen elsewhere in the West? A secret system fed by foreign oil, underpinned by military links, corrupting national politics? When I contemplate America, Britain, and Saudi Arabia, I wonder. In fact, it is almost certain that several systems with some or all of these characteristics link rich Western countries with poor, oil-rich ones. The main difference is that magistrates cracked the French system open. The others remain submerged.