More often than not, however, oil wealth is mismanaged, Charles McPherson, Senior Advisor in the World Bank Group’s Oil, Gas, Mining and Chemicals Department said yesterday.
In the case of Nigeria, which is emblematic of many oil-producing developing countries, GDP per capita remains at less than $1 a day, despite the fact that $300 billion in oil rents have been generated over the past 25 years.
"Proper management of petroleum revenues depends on a number of factors, including institutional capacity and more importantly, the quality of governance. Where governance is poor, there is little chance that sound policies will be implemented. Furthermore, in weak institutional environments, petroleum revenues are associated with the further erosion of governance," said Peter Woicke, Managing Director of the World Bank Group and Executive Vice President of the International Finance Corporation (IFC).
The link between oil revenues and governance taken up at a recent two-day workshop convened at headquarters by the Oil, Gas, Mining and Chemicals Department along with the Energy Sector Management Assistance Programme (ESMAP). The 150 participants came from governments, major oil corporations, nongovernmental organizations, and multilateral organizations to debate the merits of existing and proposed methods of revenue collection, management and distribution.
Much of the discussion on revenue collection focused on the importance of transparency for companies, governments and civil society directly and indirectly involved in revenue collection. In his opening address, Woicke called on natural resource companies to adopt a new standard of transparency by disclosing net taxes, fees, royalties, and other payments to host governments. "This level of transparency would in turn introduce a new level of accountability. The public at large would know just what governments have received. Governments would then have to address the issue of what they ultimately do with their revenues".
Karin Lissakers, Senior Advisor to George Soros, underscored the importance of disclosure in her keynote address in presenting Publish What You Pay, a transparency initiative led by the Open Society Institute and Global Witness that targets disclosure for natural resource companies in G8 countries.
Yet full disclosure by companies is not sufficient. Representatives of the governments of Angola and Nigeria and of NGOs noted that weak institutional capacity precludes host countries from using information effectively—regardless of how complete and accessible it may be. "You must view Angola in the proper context; we are emerging from 26 years of war…we simply lack capacity," explained Josefina Perp
EMAIL THIS ARTICLE SAVE THIS ARTICLE FEEDBACK
To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
