On Friday, October 10 2003, before African head of states and foreign dignitaries in Kome, Chad, President Idriss Deby symbolically turned the tap that opened the flow of 225 000 barrels of oil. The $3.7 billion crown jewel project of the World Bank (WB) is the biggest foreign investment in sub-Sahara Africa. For the next 25 years, approximately 900 million barrels of oil will be pumped from 300 oil wells drilled in Doba, south of Chad, along a 1070km pipeline to Cameroon on the Atlantic coast.

WB financing, which totalled just 4 percent of the cost, was crucial to the project. The oil consortium comprising of Exxon, Petronas, and Chevron considered the participation of WB as a necessary political risk insurance, which enabled them to raise more money on international capital markets. Meanwhile, the WB embraced the project as an unparalleled opportunity for land-locked Chad to lift its 6.5 million population out of acute poverty, and for ocean-bordered Cameroon to generate much needed revenues.

Some months after Chad, the world's fifth poorest country, entered the pantheon of Africa's petro-states, it is worth taking stock of the overall project impacts now that the exploitation phase has started. Has the project broken free from the traditional gap between expectations and dismal realities of oil exploitation? Better still, has the oil been a Weapon of Mass Poverty (WMP) or a Weapon of Mass Development (WMD) to Chad and Cameroon?

The background to any petroleum project is key in determining the development outcomes. In fact, the underlying development problems associated with the extraction of black gold are not inherent in the resource itself. However, there is little disagreement on the ability of oil to ratchet up pre-existing conflict in a society; oil can become the very rationale for starting war. In this light, the socio-political environment in which WB approved the project was a potent recipe for poor development outcomes.

There is an endemic mix of corruption and civil strife in Chad and Cameroon. For instance, Chad, since independence, has been marred by a vicious cycle of conflicts and war. Besides the absence of basic ingredients for the growth of civil society, elections are shamelessly rigged, fraud is rife, and the regimes have shown a predilection to violently repress dissenting voices.

For example, villagers were coerced to give their accord to the project in consultations prior to its approval. Tales in Kome, where villagers were consulted in the presence of government forces and rebels, are all too glaring. The village chief was imprisoned for his unfavourable attitude, and the oil company representative arrived accompanied with military police. Given this background, most people were too intimidated to speak out against the project.

Given that Cameroon has consecutively crowned Transparency International's rating of the most corrupt countries in the world, it was no surprise that a bellicose climate of non- information disclosure concerning the project was the norm.

International civil society organisations in 1997 argued for the project's postponement to ensure the two countries upgrade their governance capacities. Contrarily, WB in June 2000 discounted this burgeoning corruption and civil strife in Cameroon and Chad respectively to approve the project. Shortly after, civil society partners were proved right when the Chadian government, on receiving $25 million from the project consortium as a signature bonus, admitted to have used the money in procuring arms to quell a rebel insurgence in the north of the country.

More recently, soon after the project's official inauguration last October, the government closed down the country's only independent radio station, FM Liberté, which had close ties to the country's human rights organisations. Then residents of the capital city, Ndjamena, witnessed the first public executions in more than a decade after court trails which human rights groups described as a mockery of justice. Hence, a warning signal to critical voices in the country to stay quiet.

It is worth noting that the WB's own Operations and Evaluation Department (OED) review commissioned in 2001 finds the Bank wanting on issues of governance. The review points out that while the WB is aware of the underlying causes for the underperformance of resource-rich countries, it has yet to formulate and implement viable approaches to address them. The recently released report of the WB sponsored Extractive Industry Review, primed the role of governance in shaping development outcomes of oil projects. Unequivocally, it recommended the WB to stop support for petroleum projects in areas of conflict or at high risk of conflict.

Broken livelihoods and promises

Approximately 880 km of the pipeline traverses Cameroon's fragile ecological zones. These include one of Africa's unique coastal rainforests, home to several indigenous peoples. Before the commencement of the construction phase, thousands of affected peoples living in villages and communities along the route of the pipeline were identified for eventual compensations. One hundred and fifty families were singled out for resettlement. Many village lands were expropriated, crops and plants destroyed and water sources polluted. The compensation plan, that included individual and communal compensations, was very limited in scope and inadequate to restore or improve on broken livelihoods.

Despite compensation being paid to replace agricultural land, most of the funds did not go into agricultural production or reinvestment to make provision for the future. The affected communities have been left alone with little or no skills to face the long-term impacts: funds had no impact in terms of generating new livelihoods for villagers; prices have increased due to shortage of labour and agricultural goods on the market; rural-urban exodus has increased and conflicts between locals and migrants attracted by the new found wealth have also increased.

The communal compensation plan, which had as its objective to compensate communities with social development projects, was very limited. Communities, who were supposed to identify projects themselves through consultations, were instead constrained to choose from a restrictive list of options proposed by the consortium.

The project thus raises a crucial issue: that of balancing profits with ecological and social principles in petroleum exploitation. Driven by the ethos of cost minimisation, the consortium was motivated to fast-track its operations, while time-intensive social and environmental components such as capacity building lag on. To what extent therefore can multinational corporations be constrained to synchronise the evolution of their exploitation operations with that of social and environmental safeguards?

Turning oil revenue into long-term benefits for the masses is the most contentious issue in resource-rich countries, particularly in Africa. Ultimately, this depends on the quality of public policy. The WB prides the revenue oversight mechanism in the Chad-Cameroon pipeline as an innovation to the extractive industry.

Under pressure from WB, the Chadian government decreed a petroleum management law in 1998. The law provides for the following division of the $2 billion royalties and dividends that would accrue from the project in the next 25 years: 10 percent set aside in a future generation-fund to prepare Chad for a post-oil future; the remaining 90 percent would pass through an offshore petroleum revenue account; 80 percent of which would go to five priority sectors (health, rural development, education, infrastructure, and environmental and water resources); 5 percent would go to the Doba oil producing region; and the remaining would be used by the Chadian government to tackle pressing operational needs.

To mainstream transparency, accountability, and participation, an oversight committee, comprising representatives from civil society, government, administration, and the judiciary was created to monitors the flows and approve spending from the offshore account.

Undoubtedly, this initiative is laudable. However, there are some flaws, which incapacitate it. For instance, three months after Chad started to taste the oil revenues, the committee lacked basic office facilities. In addition, the 5 percent allocated to the Doba region is inadequate. Worst of all, the allocations contained in the law can be changed by the government unilaterally after five years.

In addition, the law covers only direct revenues generated from royalties while indirect revenues such as taxes and customs duties are precluded. These could account for up to 45 percent of the total oil revenues expected over the lifetime of the project.

Conclusion

Several conclusions about petroleum development in Africa become apparent from the Chad-Cameroon pipeline project.

Firstly, oil corporations cannot be transformed into development agencies even with the best of intentions and monitoring mechanisms. Secondly, global wielders of development outcomes like the WB cannot exercise sufficient clout on the penchant for profits of oil multinationals. Thirdly, WB is incapable of respecting even its own weakening safeguard policies, which are premised on controlling damage rather than avoiding harm.

Fourthly, the embryonic neoliberal governance structures in Africa are incapable of constraining Foreign Direct Investments, which are principally attracted by ground mineral resources, to respect ecological and social principles. The flawed contention of the WB is "one cannot eat omelettes without breaking some eggs'' but the eggs are more often the poor who end up with no livelihood opportunity and become even poorer.

Finally, Public Private Partnerships (PPP), the buzz paradigm of sustainable development, are fundamentally incapable of readdressing the unequal power relations between fattening multinationals, weakening states and the World Bank.

As it turns sixty, it is time therefore to pressure the Bank to retire from financing development and environmental disasters like the pipeline. In sum, just like the Weapons of Mass Destruction in Iraq, the Chad-Cameroon pipeline is an illusive Weapon of Mass Development. It is time to send some United Nations development experts to Chad and Cameroon to uncover Weapons of Mass Poverty.

* Akong Charles Ndika is an energy policy analyst with Global Village Cameroon

All over Cameroon, dark clouds are giving way to blue skies. But while the rains are ending, consumers are increasingly worried about their electricity supply and the anticipation of blackouts is a long way from becoming history. In the last three years, power supply has been very erratic. In this connection, the privatised utility, AES-SONEL, is talking-up prospects of investments that are afoot to turnaround the state of events. And amid the uncertainty, Sino-Cameroon relations are taking a twist towards dams. The head of state, Paul Biya, in September flew home with a baggage of dams ready for Chinese financing. These include the construction of three mini-hydropower plants by China International Water and Electrical Corporation (CWE) on the rivers Ntem, Nja, and Kadey. However, beyond government's interest in dams lies a minefield of equity and sustainability issues. Who are the actors and what are their true motives? Are their interests aligned with sustainable development?

The privatisation of electricity provides a background to comprehending some equity issues surrounding the proposed projects. The process, masterminded by the World Bank, was dispossessed of public scrutiny and participation. The recommendations of the International Finance Corporation's consultant - the private sector arm of the World Bank - blueprinted the privatisation of the National Electricity Co-operation (SONEL) in 2001. In the recommendations that were fleshed into a concession agreement, the construction of a big dam over the river Lom-Pangar was mandated to AES SIRROCO: a US based corporation. However, the Lom-Pangar issue predates privatisation. The French - enamoured by the project in 1990 - contracted the consultancy Coyne et Bellier, to carry out a feasibility study on the dam. The study was motivated by the relation between a quasi-owned French company, Alucam and SONEL. Alucam's intent to double its aluminium production capacity depended on cheap hydropower.

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In less than a year, the African Development Bank (AfDB) will be celebrating its 40th anniversary. This comes at a time when there is growing consensus all over the continent on the need for Africa to have ownership of its development. In tune with this, African heads of states in June 2003 committed their leadership to the New Economic Partnership for Africa's Development (NEPAD), which centres on African ownership and management of the agenda, strategy and process of the continent's development. In fact, the overarching goal is for “Africa to claim this millennium”.

The AfDB is tasked with co-ordinating and facilitating NEPAD. The African Development Bank (AfDB) is widely regarded as the premier financial and development institution of Africa. The Bank started operations in 1966 with a clear mandate to promote the economic and social development of its regional members and to promote international dialogue and understanding of development issues relevant to Africa. Within its general policies, the AfDB emphasised the importance of planning an energy sector for social and economic development, and indicated the intention to provide energy services to the maximum number of households at the least economic and environmental cost. This was to be done through loans, equity investments, and technical assistance to regional member countries. This envisaged regional leadership has remained a pipe dream, however, as institutions of global economic governance like the World Bank and International Monetary Fund provided external influences on Bank operations.

It is important to assess how far the Bank has lived up to its commitment to position Africa's infrastructure on the path to sustainable development. A look at the AfDB energy portfolio provides answers to these questions, while basic indicators of transparency between the AfDB and the World Bank are also worth looking at.

Energy policy and accessibility is a pillar of economic and human development. It is estimated that between 40-45 percent of Africa's 730 million people live in absolute poverty. Thirty percent are extremely poor and most of these are women. Energy poverty prevails. The availability of clean, safe energy services is vital for human livelihood and sustainable development. Poverty prevalence and health standards are inextricably linked to energy policy. Africa boasts an array of substantial renewable energy resource options, which if exploited intelligently could electrify rural areas. Solar, micro-hydro, wind and geothermal energy would bring power sooner and with lower environmental impact than conventional policies have done.

The Bank says lending in the traditional sector (i.e. fossil-fuel power plants) has significantly declined [and that] over the recent past, there has been a shift in the bank's lending from conventional energy projects to rural, decentralised projects incorporating renewables. Such a shift is overdue: in the year 2000, just one renewable energy project was funded by the Bank and typically, about 3 percent of AfDB energy investments went to such projects.

The importance of energy to development is acknowledged in the AfDB 1994-draft energy policy which even stated Bank support for the promotion of solar, wind and micro-hydro initiatives. Several small initiatives have helped to identify and promote viable renewable energy technologies but these have been temporary and marginal to the vast majority of energy spending. And the new energy policy of the AfDB borrows greatly from the World Bank programme of privatising publicly owned energy companies. This programme has not resulted in improved development or sustainable energy in developing countries around the world. In this light, AfDB would-be energy policies are highly unlikely to improve energy access in rural areas nor boost development.

Though the AfDB was founded by African governments holding a majority ownership on paper, they don't exert proportionate influence over the Bank. Fifty-three member countries are African while 24 are non-regional members. Within the Bank, the role of non-regional members is large and growing. Since 1999, the share of regional members has shrunk to 60 percent, down from 67 percent, while non-regional members own the remaining 40 percent, up from 33 percent.

Conventions that are upheld within the Bank provide clear possibilities for skewed priority setting. The non-African member countries that provide the capital and set policies in the World Bank also strongly influence the AfDB. So far, the AfDB has not developed viable Africa-relevant alternatives and more often abides by World Bank prescriptions, remaining silent on the negative aspects of the privatisation of public services and assets.

Though it has not assumed leadership in Africa's development, the AfDB is still an important influence over regional and domestic energy policy. Aside from direct spending influence, regional development banks can actually prescribe national policy reforms. The introduction of the Structural Adjustment Program (SAP) in the 1980s by the World Bank and the IMF prompted the AfDB to equally engage in policy based lending. Rather than alleviating poverty, these economic adjustment policies instead generated poverty in the sense that unemployment increased, real wages fell and governments cut social expenditures.

Through policy-based lending, International Financial Institutions (IFIs) facilitate the opening of emerging energy markets to foreign investment through privatisation and deregulation. Development bank sponsored energy sector restructuring and projects for the extraction, processing, transport and combustion of fuels for energy provision have enormous impacts on peoples livelihoods and health and on the environment as well as the affordability or otherwise of essential electricity and liquid fuels. At least in theory - through the resultant economic growth and exposure to market rules - this process facilitates competition and transparency. But in practice the transfer of control and ownership of resources and infrastructure is removing, rather than introducing opportunities for public oversight.

African Development Bank representatives reside in most client countries often with a skeleton staff for basic tasks excluding public liaison. The total absence of full resident missions in some countries of operation precludes the facilitation of information dissemination and public dialogue. AfDB units such as that in Cameroon, which is housed within UNDP offices, have as few as two staff to follow up Bank financed projects and who therefore do not provide information on general Bank operations. Most offices maintain only limited information on projects and are not always ready to release it to the public. The absence of functioning Bank structures in most member countries makes it difficult even for the Bank itself to evaluate the projects it finances, let alone for those operations to be transparent to others.

Public notification is not a requirement when a project comes up for internal consideration: the first step in the approval process. It is invariably difficult to obtain project information, especially project briefs for which access is limited to management and Board members. Project documents are only released once an internal evaluation of the project has taken place and even then, only at the Bank's headquarters in Abidjan. Even this after-the-fact information disclosure can be avoided when the Bank cites legal restrictions or practical constraints or deems the information sensitive or privileged in which case it may be classed as confidential, for official use only. When they are finally available to the public, project files contain the terms of reference and operational directives of the bank but not the financial aspects or information about private sector partners. At this point, the project-in-pipeline becomes available on the official web-site including country, sector and cost of project but has already reached an advanced stage of the approvals process with minimal stakeholder input. Even so, it is regarded as very difficult for an affected community to discuss a planned project with the bank once it appears publicly.

It is worth noting that, though the AfDB and World Bank shareholder constituencies are European and US dominated, the standard of Information Disclosure, Environmental Impact Assessment and Resettlement Policy are substantially lower in the AfDB.

Given the demonstrable power IFIs wield over development prospects and energy sector reform, and the urgent need for sustainable energy provision, transparency within International Financial Institutions is imperative. Because a projects value depends not only on its profitability to investors but its contribution, or at very least its absence of detriment, to the people that live most closely with the consequences, they must have a say over whether the project proceeds and under what terms. Effective public participation, in turn, relies on good information disclosure policy and practice on the part of the Bank. Even as lenders of last resort for many types of programmes, the African Development Bank could function better by aligning policies and projects more carefully with a broader spectrum of stakeholders, especially those directly affected by individual projects. Public funds should not be used for projects or policy reform exercises that affected people are not informed of prior to implementation nor for which no reasonable avenue of appeal exists.

As the controversies over bank reform priorities, policies and projects are broadcast from project-affected people and NGOs to a wider audience - including the major constituencies of Bank Executive Directors in the US, Japan and Europe, greater accountability is being demanded. Development banks and the private sector must exercise the principles and standards of operation that would be expected in their shareholder countries, starting with the basics of reasonable and consistent information disclosure standards across regions. To position Africa on the trajectory to sustainable development, AfDB should make its policies and project documents transparent and based on public input. This is the only path to true ownership of any development initiative for Africa. Until use of public funds is subject to public scrutiny, energy policy that reflects African needs, aspirations and sustainable development will remain elusive for this millennium.

* Akong Charles Ndika is an Energy Policy Analyst with Global Village Cameroon

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Couched in a new framework of interaction between Africa, industrialised countries, and multilateral organisations like the World Bank, the New Partnership for Africa's Development (Nepad) has been promoted at all major world economic gatherings since its launch in October 2001. At corporate globalisation forums like the G8 meetings, its advocates have likened Nepad to the Marshal Plan that resurrected Europe after World War Two, claiming that Africa's present development status is as a result of insufficient globalisation, and the therapy is to integrate Africa further into the global economy. By this strategy, can Africa truly claim this millennium? Nowhere is an answer more obvious than in the energy sector, the cornerstone of Nepad.

Energy is of premier importance for economic development in Africa. With global business opportunities totalling trillions of dollars, energy is one of the biggest businesses in the world. In particular, energy consumption in developed countries is expected to swell significantly in the years ahead. With these rosy business prospects, Nepad intends to use energy as a launch pad for Africa into the global economy. Against this, and despite the rich and diverse sources of energy on the continent, per capita consumption of energy in Africa is the least in the world, fronting energy poverty at the root cause of underdevelopment. With about 40 to 45% of the 730 million people in Africa living on less than a dollar a day, access, affordability, and efficiency are the tenets on which any strategy that will align Africa's energy economy on a path to sustainable development must be judged.

Although Nepad makes a token reference to the need to guarantee a sustainable supply of affordable energy as the cornerstone for poverty alleviation, projects envisaged to operationalise the goal run opposite to the energy needs of the majority of Africa's inhabitants. The short-term action plan to dually anchor sustainable energy development and serve as building blocks to the realisation of medium to long-term goals are power systems, and oil and gas transmission projects. The power projects include the Mepanda Uncua Hydro Power Plant, Ethiopia-Sudan Interconnection, West Africa Power Pool (WAAP) Program, Algeria-Morocco-Spain Interconnection, Algeria-Spain Interconnection, Algeria Gas-fired Power Station, and the Mozambique-Malawi Interconnection. The gas and oil transmission projects include: the Kenya-Uganda Oil Pipeline, West Africa Gas Pipeline (WAGP), and the Libya-Tunisia Gas Pipeline. Firmed on the profiteering devotion of multinational corporations, are these projects really relevant to Africa's development aspirations? Alternatively, will they actually meet the energy needs and aspirations of present and future generations? This article attempts an answer by calibrating the projects on the following sustainability scales:

AFFORDABILITY: PUTTING PROFITS AHEAD OF PEOPLE

The power projects mentioned highlight an unbowed agenda to centralise the supply of electricity in the continent. The seed capital for these projects is the sweeping wave of privatisation of State Owned Enterprises (SOE's) across Africa. Through policy-based lending, most African countries are subscribing to the dictates of international institutions like the World Bank to open the energy sector to foreign investment through privatisation and deregulation. In these circumstances, electricity is treated as a commodity rather than a public service. Hence, the hallmarks of SOE's such as universal service, non-discriminatory pricing between industrial and residential users, and cross-subsidies to urban poor and rural populations are substituted for full cost recovery, the credo of privatised utilities.

At the same time, and in order to maximise profits, multinational corporations are exploring opportunities to transcend geographical barriers. Anchored in neo-liberalism, the Nepad action plan facilitates the lifting of geographical restrictions on electricity trade across Africa. It is worth noting that this is inimical to the livelihoods of the majority of Africans living below two dollars a day. Besides paying the real cost for electricity, unreliable consumers will be priced out of the grid. In sum, markets and customers in the Nepad action plan take precedence over citizenship.

ACCESSIBILITY: NO ROOM FOR RURAL ELECTRIFICATION

Access to electricity services is a clear marker of the difference between the rich and the poor, between men and women. In fact, 80% of the 500 million Africans without access to electricity live in rural areas. In particular, the rural electrification rate of 16.9% in Africa is the least in the world. The lack of electricity correlates with many indicators of poverty such as poor education, inadequate health care, and hardships imposed on women and children. Electricity services can indeed enhance the quality of life of rural populations in countless ways. For instance: electric light extends the day, providing extra hours for reading and improving exam results in rural areas; refrigeration allows rural clinics to keep needed medicines such as vaccines; and solar dryers can lead to lower post-harvest losses and enable rural farmers to market their produce when prices are higher.

Because of the rates of poverty and low population density in rural areas, relying on grid solutions for lights on is a sure course for lights off. In fact, the energy needs of rural Africa are decentralised. Meeting the energy needs of rural populations requires the exploration of renewable energy sources. In contrast, the Nepad action plan prioritises the centralisation of power supply, the opposite of the decentralised energy needs of rural masses. Driven by profits, privatised utilities have no incentive to extend networks to rural areas, unless government subsidies make up for the financial loses and provide an attractive margin of profit. It is worth noting that the neo-liberal fountain from which Nepad draws its viability is at odds with subsidies. In fact, governments are compelled to shirk their social responsibilities thereby leaving rural populations permanently unconnected to the grid.

EFFICIENCY: PRIVATISATION OF BENEFITS AND SOCIALISATION OF RISKS

The Nepad action plan is based on a resource-led development approach which prioritises the extractive industry sector, paving the way for criss-crossing oil and gas transmission pipelines. The capital intensive nature of these projects is beyond the purse of African states; and the action plan intends to facilitate the establishment of policies and institutional framework favourable for multinational corporations to invest. This could include favourable contractual risk guarantees that profits are placed ahead of public concerns and generous tax exoneration provisions. But the fact is that oil mining does not equate with the prosperity the international financial institutions give it credit for. Even though Nigeria ranks seventh in terms of world oil production, she tailed the human development report in 2002. Another point that cannot escape attention, particularly in the context of the present US-led war against terrorism, is the potential millitarisation of pipeline routes and the inevitable impact on the human rights of nearby communities. Envisaged power projects will significantly impact on the livelihood development of communities. For example, the Mepanda Uncua Hydropower Project will lead to the construction of a 100 square kilometre reservoir that is going to displace 1400 people, while floods are expected to impact on further thousands.

I wouldn't like to conclude without resuscitating the focus of this article: Is Nepad worth its value in sustainable development? Calibrated on the aforementioned points, it is hard to answer in the affirmative. In addition, credence for this pessimism roots in Nepad's engagement with civil society organisations in Africa, international social labour, and environmental movements. In obviating the contributions of these actors, who in their struggle for socio-environmental and economic justice have been able to bring about a modicum of progressive global change, Nepad fails to differ from other multinational corporations' designs to mine Africa's resources and maim its people. Is this the price to be paid in order for Africa to claim this millennium?

* Akong Charles Ndika is an Energy Policy Analyst with Global Village Cameroon.

* Please send comments for publication in the Letters and Comments section of Pambazuka News to [email protected]