HRW: Equatorial Guinea, the next member of OPEC, mismanaging wealth

The country is sub-Saharan Africa’s third-largest oil producer and party to a multilateral effort to stem the flow of oil to balance an oversupplied market.
By Daniel J. Graeber  |  June 15, 2017 at 6:30 AM
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June 15 (UPI) -- The next member of OPEC -- Equatorial Guinea -- is neglecting social welfare amid dwindling revenue and resources, Human Rights Watch said.

Before the discovery of oil in the early 1990s, the country had a total net income of around $130 million, though oil reserves brought that to a peak of $19 billion in 2012, when oil prices for this date were close to $115 per barrel.

With oil prices now below $50 per barrel, Human Rights Watch said oil wealth is mismanaged and a culture of corruption means "enormous profits" for senior government officials.

"Ordinary people have paid the price for the ruling elite's corruption," Sarah Saadoun, a business researcher at Human Rights Watch said in a statement. "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."

The rights group points to construction of an administrative capital with a target of $8 billion in spending as an example of mismanaged wealth. Spending on health services, meanwhile, is about $90 million.

The country has lobbied to join the Organization of Petroleum Exporting Countries at least since 2009 and advanced on its regional partnerships last year by hosting a joint African-Arab summit. In December, it joined OPEC efforts as a non-member state.

From the sidelines of a February oil and gas conference for Africa, the country's energy minister, Gabriel Mbaga Obiang Lima, submitted a formal request to join OPEC. The country, he said, has a "sterling track record" as a supplier.

According to the economists at OPEC, oil production from the country is expected to decline by 10,000 barrels per day this year. It joins OPEC officially in July.

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