An oil platform off the Angolan coast AFP/Getty Images
Supply and demand
By Adam Green | Published: 07 July, 2009
The Organisation for Petroleum Exporting Countries has become a consistent contributor of development assistance to Africa, but its independence is being called into question.
Since March, the Opec Fund for International Development has disbursed $76.6m in aid to Africa, funding infrastructure and energy projects, including a natural gas distribution system in Tunisia, an airport in The Gambia, and road construction in Madagascar. The fund – formed in 1976 and devoted to “the poorest of the poor countries” – directs 50 percent of its public sector allocations to Africa.
In the current environment of declining public sector revenues on the continent, coupled with wavering commitments from European development actors, the temptation to view Ofid’s activities as purely philanthropic is strong. However, Ofid’s distribution appears transparently to support Opec’s interests. Between 2002 and 2008, four nations dominated the top fraction of Ofid public sector disbursements; Sudan and Egypt - Africa’s largest potential Opec members by proved oil reserves - and Tunisia and Morocco, politically moderate Arab-African nations hardly in the poorest bracket but exercising a stabilising effect in the Maghreb and North Africa.
Ofid links Opec to new oil producers and consumers in developing regions. Benjamin Auge from Africa Energy Intelligence considers Africa vital to the former. “If Opec wants to regain its clout it must enrol other producer countries in Africa” he says, adding that current members Libya, Algeria, Nigeria, and Angola are playing “an increasing role” in the organisation. Yet the cartel has struggled to gain a greater foothold in recent years, acquiring only one new permanent signature in almost four decades.
A major barrier remains the presence of numerous powerful non-Opec actors discouraging Africa’s oil producers from joining the cartel because of the limitations imposed by its production quotas. “China, which imports most of Sudan’s oil, doesn’t want to see its purchases subject to Opec quotas, and is turning up the heat on Khartoum to stay out of the organisation,” Mr Auge says. Rumours circulated in 2002 that Nigeria would pull out, for the same reason. State-owned oil groups in India and Russia are of similar mind, and strengthen their case by offering multi-sector aid packages not dissimilar to Ofid’s.
By prioritising energy poverty and transportation infrastructure, Ofid helps developing countries advance their energy consumption, bringing them to Opec as consumers. Ofid director-general Suleiman Al-Herbish acknowledges the fund’s role in this process, saying “a major share of future incremental oil demand will be assumed by developing countries. This will increase the interdependence between those countries and Opec states. When we add the Opec Fund to the equation, with its mandate to foster the social and economic advancement of developing countries, there is a further convergence of interests.”
Tunisia and Morocco also dominate Ofid funds despite their relative affluence, an apparent break from the “poorest of the poor” mandate. Viewed through an Opec lens, there is a certain sense to this, given the regional political role these nations have.
The Maghreb and the Horn of Africa host radical Islamic groups such as al-Qaeda and its affiliates, the Moroccan and Libyan Islamic Fighting Groups, Hamas, al-Shabaab, the Salafist Group for Preaching and Combat and numerous others capable of jeopardising oil price stability. There is also the potential for the export of violence into the Gulf states, in response to their trade with the West, incremental softening of Shariah law and perceived passivity to US and Israeli aggression on Muslim populations.
