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Equatorial Guinea: Oil wealth squandered and stolen

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Staff Writer | June 15, 2017
Equatorial Guinea’s mismanagement of its oil wealth has contributed to chronic underfunding of its public health and education systems in violation of its human rights obligations, Human Rights Watch said in a report.
Equatorial Guinea
Oil exploration   Manna From Heaven
Declining oil reserves mean that there is very little time left for the government to correct course and significantly invest in improving the country’s woeful health and education indicators.

he 85-page report, “‘Manna From Heaven’?: How Health and Education Pay the Price for Self-Dealing in Equatorial Guinea,” reveals that the government spent only 2 to 3 percent of its annual budget on health and education in 2008 and 2011, the years for which data is available, while devoting around 80 percent to sometimes questionable large-scale infrastructure projects.

The report also exposes how, according to evidence presented in money laundering investigations carried out by several countries, senior government officials reap enormous profits from public construction contracts awarded to companies they fully or partially own, in many cases in partnership with foreign companies, in an opaque and noncompetitive process.

“Ordinary people have paid the price for the ruling elite’s corruption,” said Sarah Saadoun, business and human rights researcher at Human Rights Watch.

“Now that the economy has been doubly hit by declining oil production and prices, it is more critical than ever for the government to invest public funds in social services instead of dubious infrastructure projects.”

Equatorial Guinea, a small central African nation of around 1 million people, took in approximately US$45 billion in oil revenues between 2000 and 2013, catapulting it from one of the world’s poorest countries to the one with the highest per capita income on the African continent.

But since 2012, its GDP has contracted by 29 percent and, according to the International Monetary Fund (IMF), oil reserves are expected to run dry by 2035 unless new ones are found.