26 January 2017

Equatorial Guinea: Why Poverty Plagues a High-Income Nation

Photo: Angela Stuesse
If rural families want their children to be educated beyond primary school, they typically have to send them to Malabo.
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The African Union's discussions about poverty have never focused on Equatorial Guinea, a small but oil-rich country boasting the highest per capita income on the continent. But with its foreign minister, Agapito Mba Mokuy, seeking the African Union Commission chairmanship, it is worth asking why the central African nation has done so poorly on social development despite the country's undeniable wealth.

In 2015, the most recent year for which there is data, only one out of four newborns in Equatorial Guinea were immunized for polio and measles and one out of three for tuberculosis - among the lowest rates in the world. Life expectancy and infant mortality are below the sub-Saharan African average. Roughly half the population lacks access to potable water.

In 2012, about four out of ten six-to-12 year olds in Equatorial Guinea were not in school, many more than in African countries with far fewer resources per capita. Half of children who begin primary school never complete it and fewer than one-quarter go on to middle school.

Part of the reason that Equatorial Guinea's health and education indicators often lag far behind its much poorer neighbors is the vast personal fortunes that senior government officials have amassed during the oil boom and because of how the country invests - or doesn't invest - in itself.

Overseas spending sprees by the son of President Teodoro Obiang Nguema have triggered money-laundering investigations that have uncovered a mountain of evidence suggesting systemic corruption across the country's government.

While there are many ways that officials siphon off public oil wealth, public infrastructure projects appear to be a major driver of corruption. The government pours nearly all its oil revenues into construction projects and often awards these contracts to companies that are at least partially owned by high-level officials, including the president. International Monetary Fund reports and high-level interviews conducted over the course of an American money-laundering investigation show that the conflicts of interest allegedly lead to inflated contract prices and dubious investments in "white elephant" projects with questionable social value.

The government, indefensibly, insists that there are no conflicts of interest when senior officials profit from the state. But the country's people pay dearly for this self-dealing, since stratospheric spending on infrastructure leaves little left over for health and education.

The government's budgets are not public and do not track health and education spending, so only selective data is available in reports by the International Monetary Fund (IMF) and World Bank. But here is what we know. Between 2009 and 2013, Equatorial Guinea took in an average of $4 billion annually in oil revenue, and spent $4.2 billion on things like roads, buildings, and airports. IMF data shows that in 2011 it spent only $140 million on education and $92 million on health. In 2008, the only other year for which such data is available, it spent $60 million on education and $90 million on health, according to the World Bank.

Overall, the government spends around $80 out of every $100 in its budget on infrastructure and $2 to $3 each on health and education.

These irresponsible budgets are at odds with the development model championed by the African Union, which prioritizes spending on health and education. By comparison, African governments now collectively spend a greater share of their budgets on education than any other region in the world - $1 for every $5, or twice as much as the mostly European Organisation for Economic Co-operation and Development (OECD) spends on education, according to one report. Uganda and Tanzania spend almost a third of their budgets on education, Ghana spends a quarter and Cameroon and Gabon spend $16 out of every $100 according to a 2010 World Bank report.

The extreme case of Equatorial Guinea shows that neither the African Union nor anyone else can eradicate poverty and promote inclusive growth--the first goal in the AU's Agenda 2063 plan--without tackling corruption. The AU should strengthen its Advisory Board on Corruption and pressure countries that haven't signed the AU Convention to Combat Corruption, such as Equatorial Guinea, to do so.

Perhaps the real tragedy is that after earning billions in oil wealth over the last three decades, Equatorial Guinea's known oil reserves are expected to run out by 2035. Unless new reserves are found, ordinary citizens could find themselves left behind despite their country's massive wealth. The clock is ticking.

Daniel Bekele is the senior director for Africa Advocacy at Human Rights Watch.

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