IV. Impact of Corruption and Oil Revenue Mismanagement on Economic and Social Rights in Equatorial Guinea

Equatorial Guinea was an extremely poor country in the decades following its independence from Spain in 1968. In 1991, the year before any oil production started, the country’s gross domestic product was approximately US$147 million.[192] Substantial oil revenues started flowing in 1997. As noted above, the country’s GDP was estimated at $18.5 billion by 2008—an increase of 5,272 percent between 1992 and 2008—almost completely from oil revenue.[193] In 2009, GDP per capita was estimated by the Economist Intelligence Unit (EIU)at a staggering $39,916 dollars in purchasing power parity (PPP) terms, which is among the highest in the world and on par with Spain and Italy.[194]

Given Equatorial Guinea’s enormous oil wealth and its relatively small population of approximately 527,000 people,[195] the country should be a model of development. In 1991 Equatorial Guinea had some of the worst socioeconomic indicators in the world, but given the dramatic growth in GDP it would be reasonable to expect a commensurate improvement in social indicators. Sadly, that is not the case. According to the United Nations Development Programme, as of 2009 Equatorial Guinea had the third-largest gap between its per capita GDP and its Human Development Index (HDI) score, ahead of only Botswana and South Africa.[196] Life expectancy is low at 52 years,[197] and infant mortality is high at 124 deaths per 1,000 live births.[198] More than 35 percent of Equatorial Guinea’s citizens do not survive past age 40. Nineteen percent of children under age five are moderately to severely malnourished,[199] while only 43 percent of the population uses safe water.[200] Almost 77 percent of the population falls below the poverty line, while, according to the UN, levels of severe poverty are on par with those of Haiti.[201]

Inadequate Funding of Health, Education, and Social Services

In Equatorial Guinea, the evidence of a link between financial mismanagement and underfunding of essential social services is so stark that it compels the conclusion that funds have been needlessly diverted away from services and institutions critical to the fulfillment of Equatoguineans’ economic and social rights. A comparison between Equatorial Guinea’s pre-oil social indicators and its most recent ones provides telling evidence of the government’s underinvestment in its own population’s well-being and its failure to adequately utilize the massive amount of revenue the country has earned as a result of its oil boom. In the decade since oil revenues started to come in, the population remained relatively stable, and social indicators did not markedly improve. In 1991, prior to the onset of oil production, the UNDP ranked the country 130 out of 160 countries in the HDI.[202] In 2008 Equatorial Guinea ranked 115out of 177 countries in the HDI.[203]  The country’s 2008 ranking also represented a decline from prior years; in 2004 it was ranked 109 in the HDI. These rankings are worrisome on their own, but are especially troubling given the country’s high per capita GDP.

According to the IMF, government expenditures on health from 1992 to 1996 averaged 6.43 percent of total outlays.[204] But between 1997—when oil revenues started flowing—and 2002 government expenditure on health declined to an average of 1.23 percent.[205] A similar downward trend occurred in government spending on education during the same period. Education expenditures averaged 6.79 percent of total outlays from 1992 to 1996, while from 1997 to 2002 the average dropped to only 1.67 percent.[206] A year later, in 2003, the US Department of State was critical of Equatorial Guinea’s spending on social services, saying that “[t]here is little evidence that the country’s oil wealth is being devoted to the public good.”[207]

As of 2005, the latest year for which this information is available, estimates of government spending on health and education as percentages of GDP had barely changed or, in some cases, had decreased. The World Health Organization (WHO) estimates that as of 2005 the government spent 1.6 percent of GDP, or $114 million, on health.[208] The World Bank, meanwhile, estimated that government spending on education as of 2005 was only 0.6 percent of GDP, or approximately $43 million.[209] The IMF noted in 2005 that “[t]he country’s social indicators have not improved” commensurate to the growth in per capita GDP,[210] while the World Bank reported that although “[o]il discoveries and rapid expansion of oil exports have caused a striking improvement in economic indicators, there has been no impact on the country’s dismal social indicators.”[211]

In 2004 the government launched a Public Investment Program (PIP) that was intended for investments in infrastructure, public administration, and other “productive” activities. The original budget allocated approximately $1.2 billion for social spending, including health, education, and housing, out of a total PIP budget of about $3.2 billion from 2005 to 2007.[212] However, while the actual total PIP spending was 36 percent greater ($4.4 billion) than the budgeted total, actual social spending declined by 43 percent—only $693 million was used for social spending from 2005 to 2007. Moreover, only 15 percent of the total budget was actually spent on social projects, a figure the IMF termed “low.”[213]

UNESCO

In a troubling and ironic development considering the Equatoguinean government’s lack of investment on its own citizens’ well being, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) announced the establishment of the UNESCO-Obiang Nguema Mbasogo International Prize for Research in the Life Sciences. The prize is funded by a $3 million grant from the Obiang Nguema Mbasogo Foundation for the Preservation of Life and is intended to provide a cash prize of $300,000 to the annual recipient as well as another  $300,000 per year for the administration of the prize.[220]

The Rights to Health and Education Under International Law

The International Covenant on Economic, Social and Cultural Rights acknowledges that different countries have different levels of resources available to them and does not unrealistically require countries to immediately devote more resources than they have to fulfill their obligations. Rather, the covenant calls upon governments to progressively implement those rights commensurate with the amount of resources available.

However, gross misallocation of resources to the detriment of the enjoyment of economic and social rights can constitute a human rights violation. The unjustified diversion of funds from health services and facilities is an illustrative example. Article 12 of the ICESCR requires that states “recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.”  This includes “provision for the reduction of the stillbirth-rate and of infant mortality ... prevention, treatment and control of epidemic, endemic, occupational and other diseases,” and “creation of the conditions which would assure to all medical service and medical attention in the event of sickness.”[221] 

The UN Committee on Economic, Social and Cultural Rights, the authoritative interpretive body for the ICESCR, has said that a “violation of the obligation to fulfill” requirements under article 12 can occur when there is “insufficient expenditure or misallocation of public resources which results in the non-enjoyment of the right to health by individuals or groups.”[222]  Similarly, the Maastricht Guidelines on Violations of Economic, Social, and Cultural Rights state that a violation “through the acts of commission” of the ICESCR can occur if a government engages in the “reduction or diversion of specific public expenditure, when such reduction or diversion results in the non-enjoyment of such rights and is not accompanied by adequate measures to ensure the minimum subsistence rights for everyone.”[223]

Equatorial Guinea’s Efforts to Fight Poverty

Due to increasing pressure from other governments and companies, the Equatorial Guinean government admitted that its National Development Plan for 1997 through 2001, drawn up at the first National Economic Conference in 1997, did not significantly achieve poverty reduction. Therefore, the government committed to preparing an interim poverty reduction strategy paper that could provide a template for a second national conference. With funding from the US Department of State, a social needs assessment of health and education was conducted for the government by independent consultants, and a mechanism to speed up investment in those sectors was proposed.[224]

As a result, the 2005 national budget, passed by parliament in September 2004, allocated increased expenditures for education. On July 7, 2005, in Malabo, President Obiang launched a Social Development Funding Mechanism designed to “speed up the execution of social outlays.”[225] The measure provided for both a comprehensive needs assessment and a mechanism through which the assessment would be implemented. The mechanism has four essential elements:

1. A capacity-building component to improve operations in relevant ministries (health, education, women’s affairs, and the environment);
2. A governing board comprised of President Obiang and three eminent international experts, mandated to oversee the Fund’s operation;
3. A consultative mechanism designed to provide donor coordination and input to relevant ministries; and
4. A streamlined disbursement process to ensure priority projects were funded immediately and transparently.[226]

The program was to be funded wholly by the Equatoguinean government and subject to yearly audits accessible to the public (though, to date, these are not available).

In October 2005 parliament approved a government provision of $1 million in 2006 for this project. President Obiang further endorsed the social program in Washington, DC, on April 11, 2006, and committed to make a $15 million contribution to the Social Development Fund by signing a memorandum of understanding with USAID that was valid until December 30, 2008. USAID provided technical assistance to support implementation of the fund, and Development Alternatives International, Inc. (DAI), won a competitive bid put out by USAID and agreed to help manage the team. In-country activities of the Technical Support Project for Social Investment and Capacity Building in Equatorial Guinea did not begin until September 11, 2006, with the arrival of the design team, and there were difficulties such as the government’s desire to have control over the selection of any long-term appointments.[227] The project became fully operational only in late 2007.[228]

The government appears to have lost enthusiasm for the project after its launch and blamed DAI for squandering funds on the design phase. Although the authorities decided in April 2008 to disburse funds to 10 of 15 projects,[229] as of October 2008 the government had yet to approve the release of the funds so that the projects could begin. The IMF calls this delay “worrisome” and commented in the most recent Article IV consultation that “[c]ontinued delay would raise questions about whether the government’s commitment [to poverty alleviation] is genuine.”[230] Thus, while the US Department of State talks of this project expanding to be worth “$60 million in the next few years,”[231] it has yet to come close to realizing its goals. To the knowledge of Human Rights Watch, neither the USAID program nor the DAI contract have been renewed.

A Second National Economic Development Conference, held in Bata on November 12 to 14, 2007, was billed to chart Equatorial Guinea’s development up to 2020. In his opening speech President Obiang stated that “[t]he elimination of poverty is a two step process because there are two types of poverty: material poverty and poverty of the spirit [mind].” The President continued, “The government will focus its attention on the development of a social infrastructure that will be the envy of the continent and the world.”[232]