As South Africa prepares to get under the covers with Equatorial Guinea, the extent of corruption in that oil-rich Central African state has been highlighted in a scandal involving an influential Washington bank.
Minister of Foreign Affairs Nkosazana Dlamini-Zuma announced recently that South Africa would soon be opening an embassy in Malabo in Equatorial Guinea.
She said a delegation led by Minister of Minerals and Energy Pumzile Mlambo-Ngcuka would visit Malabo shortly “to ensure the consolidation and strengthening of economic cooperation between the two countries”.
President Teodoro Obiang Nguema Mbasogo was here early this month for consultation with President Thabo Mbeki. As the major driving force of the continental socio-economic rescue plan, the New Partnership for Africa’s Development (Nepad), Mbeki will have his work cut out justifying cosying up to a leader whose political and economic actions are the antithesis of what Nepad stands for.
South Africa is actually a little late in beating a path to Equatorial Guinea, whose recently discovered oil wealth makes it the fastest growing economy in the world at 20% a year.
But a report in the United States Congress last week shows it would be virtually impossible for South Africa to become involved in any enterprise that does not enrich Nguema or his family.
The Equatorial Guinean leader, who came to power in 1979 after having
his uncle (the late president) killed by his Moroccan security guards, has emerged as a kleptocrat in the Mobutu Sese Seko mould.
The US Senate permanent sub-committee on investigations probed the affairs of the Washington-based Riggs bank, which revels in the slogan of being “the most important bank in the most important city in the world”.
The Senate report found the bank was involved in money laundering and corrupt payments to top Saudi Arabian officials, Chile’s Augusto Pinochet and Nguema.
The investigation determined that “from 1995 until 2004, Riggs bank administered more than 60 accounts and certificates of deposit [CDs] for the government of Equatorial Guinea, Equatorial Guinea government officials, or their family members.
“By 2003 the Equatorial Guinea accounts represented the largest relationship at Riggs bank, with aggregate deposits ranging from $400-million to $700-million at a time.
“The investigation has determined that Riggs bank serviced the Equatorial Guinea accounts with little or no attention to the bank’s anti-money laundering obligations, turned a blind eye to evidence suggesting the bank was handling the proceeds of foreign corruption, and allowed numerous suspicious transactions to take place without notifying law enforcement.”
The London-based Africa Confidential quotes Equatorial Guinea official spokesperson Alfonso Nsue as saying: “The investigation that led the American Senate to Riggs bank has nothing to do with our government nor with our dignitaries …
“Consequently, there is no problem between the State of Equatorial Guinea, the Senate and the Congress of the United States of America.”
Foreign Affairs spokesperson Ronnie Mamoepa said the South African government has “not seen the report to enable us to comment intelligently.
“We would have to get access to the report before we can comment on it. Nevertheless, we remain committed to deepening our political and economic relations with Equatorial Guinea. Obviously, we are guided by the values of our Constitution in pursuing political and economic relations.”
The corruption is of concern to the US, which receives 14% of its oil imports from the Gulf of Guinea and is looking to increase this slice to 20%.
In the Scotsman this week, Fred Bridgland said “the US changed tack just over three years ago after Exxon Mobil, Chevron Texaco and Dallas-based Triton Energy, a company with close ties to President George W Bush, had invested more than $5-billion in Equatorial Guinea’s oil production”.
“The companies lobbied for strengthened US relations with the Nguema family. The US Embassy in Malabo was reopened in December 2001.”
Nguema’s human rights record is poor, with his major rival Severo Moto — the man said to be behind the abortive coup bid by South African-based mercenaries — accusing him of being “a demon who systematically eats his political rivals”. Moto maintains that Nguema ate the testicles and brain of a police commissioner who crossed him.