Gabon to get $4.5bn Asian investment
By Tom Burgis in Lagos
Published: August 15 2010 23:19 | Last updated: August 15 2010 23:19
Gabon, a small west African oil-producer seeking to emerge from decades of dictatorship, is planning $4.5bn of agriculture and infrastructure ventures in what would rank among the biggest investment packages by Asian powers in Africa.
In an announcement timed to coincide with the celebrations of the 50th anniversary of Gabon's independence from France, the government said Indian and Singaporean groups would invest in timber, palm oil, housing and road-building projects as well as constructing a special economic zone.
Gabon was ruled for 41 years by Omar Bongo – Africa's longest-serving ruler at his death last year. While most of the country languished in penury, Gabon's thirsty elite made the country the world's highest per capita consumer of champagne.
None could match Mr Bongo's personal fortune, among the largest anywhere. He became a prime mover in the politics of France, the former colonial power.
Since succeeding his late father, Ali Ben Bongo Ondimba, previously defence minister, has sought to project a different image.
The investment plans would create tens of thousands of jobs in the nation of 1.5m people, Mr Bongo said.
The plans "demonstrate the recognition of Gabon, its stability, the credibility of its head of state … at a moment when the African continent is positioning itself as a significant pole of international growth," the government said.
Asian groups have dramatically increased their investments in Africa over the past decade, led by Chinese state-owned companies seeking to secure resources and infrastructure contracts.
The Gabonese plan, however, falls outside the sectors that have garnered the most attention: oil, minerals, telecoms and banking.
The government said Olam, a Singapore-based agriculture multinational, would lead the development of a special economic zone designed to spur the timber industry.
Olam would also be the main investor in a venture designed to make Gabon one of the continent's leading producers of palm oil, a commodity produced across west Africa and used in food-processing.
M3M of India would build 5,000 low-cost houses while its compatriot Ramky Infrastructure would lay 1,000km of roads, the government said.
Olam, M3M and Ramky could not immediately be reached for comment.
The plans were designed with an eye to Gabon's "after-oil" economy, the government said.
Gabon's oil output, which has given it a gross domestic product per head far above the regional average, has dwindled to about 240,000 barrels a day last year and will run out as soon as 2025, according to some estimates.
World Bank Group's role in illegal African rainforest destruction is exposed: company implicated in Congo forest plunder posts rising profits
Washington, USA - The World Bank's International Finance Corporation (IFC) is financing a Singapore-based trading group OLAM International Ltd. which provincial Forestry Minister Coco Pembe has accused OLAM of trading in illegal timber in one of the world's last intact rainforests in the Democratic Republic of Congo (DRC).
The timber being traded by OLAM is sourced from local companies in the province of Bandundu whose logging permits have expired. Local authorities have seized shipments from OLAM, claiming the company didn't pay taxes and underreported their timber volumes. OLAM is expected to announce a 29 percent rise in net profits today.
In 2005, OLAM was awarded logging titles covering over 300,000 hectares in the Bandundu region, in violation of a 2002 moratorium on the allocation of new logging titles, and DRC's Forest Code, both of which were introduced with the support of the World Bank in an attempt to tackle uncontrolled logging in the DRC.
In December 2003, the IFC invested $15 million in OLAM and, during 2004, a partial guarantee of $50 million was approved for the company. World Bank records show that, as of fiscal year 2006, IFC held $11.2 million in OLAM loans and guarantees. Meanwhile, the World Bank denies any IFC involvement in the DRC forest sector, stating on their website that 'the Bank does not fund logging anywhere in Africa and our main advice to the Government of DRC is not to expand industrial logging.'
'This is an example of the World Bank's double standards when it comes to using international finance to help save the DRC's forests. While the left hand of the Bank claims to save the Congo forests, its right hand helps destroy them,' said Susanne Breitkopf, Greenpeace forest campaigner. 'Rather than financing the plunder of the world's second largest rainforest, the World Bank should invest in strengthening forest law enforcement in the DRC, to control the wanton and illegal destruction being perpetrated by logging companies.'
In April 2007, Greenpeace published a report detailing how OLAM trades in timber from third parties whose destructive logging operations cause social conflicts, massive environmental damage and significant loss of state revenue. In May, Greenpeace wrote to the IFC asking that it divest from OLAM on the basis that the group's existing logging titles, awarded illegally after a 2002 moratorium on new titles, should be considered illegal and cancelled. At the end of July, the IFC rejected this request, claiming that the group only works with suppliers who hold valid logging permits and that OLAM is committed to sustainable forestry.
OLAM's operations have already faced legal issues elsewhere in Africa, and in 2004 the company was fined $20,000 by the U.S. Commodity Futures Trading Commission for illegal practices in the United States.
'There are serious questions about the effectiveness of the IFC's Performance Standards. The World Bank Group should ensure its funds are used to improve governance and to alleviate poverty, not to fund forest destruction. Despite capacity building talks about the DRC forest sector since 2002, international logging companies continue to operate with impunity and the government has no means to control them,' concluded Breitkopf.
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Dr Sarah Wykes