›August 26, 2015 // By Josh Feng
Isabel dos Santos, the daughter of Angolan President José Eduardo dos Santos and the richest woman in Africa, owes her wealth to the oil industry. Delfina Fernandes, a woman living in abject poverty in the village of Kibanga, uses gasoline as an anesthetic to dull the sheering pain of her rotting teeth.
One in five African states produce hydrocarbons, and most of these are heavily dependent on oil and gas revenues to finance their governments and generate foreign exchange. Further, an emerging group of East African states are waiting on international oil companies to develop new oil and gas reserves. But Africa’s record using non-renewable oil and gas resources to trigger economic and social development is poor – and plummeting prices may portend more instability to come.
It’s not often that a change in accounting rules could reduce the probability of war. But that’s exactly what happened at the U.S. Securities and Exchange Commission (SEC) last month.
On August 22, the SEC finally enacted long-overdue regulations requiring any oil company that is publicly listed on a U.S. stock exchange to report the tax, royalty, and other payments it shells out to foreign governments where it operates. Previously, companies were able to conceal this information, enabling a culture of corrupt payoffs that kept the petrodollars flowing into authoritarian leaders’ coffers – even where it directly contravened U.S. interests.
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