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Africa: Fossil Fuels

International Development written question – answered on 24th January 2008.

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Photo of Andrew Smith Andrew Smith Labour, Oxford East

To ask the Secretary of State for International Development what research his Department has (a) undertaken and (b) evaluated on the effect on poverty levels of his Department's expenditure relating to the oil and gas extractive industries in Africa.

Photo of Gareth Thomas Gareth Thomas Parliamentary Under-Secretary(Department for International Development) (Trade Policy) (also Business, Enterprise and Regulatory Reform), Parliamentary Under-Secretary (Department for Business, Enterprise and Regulatory Reform) (Trade and Consumer Affairs) (also Department for International Development), Party Chair, Co-operative Party

The Department for International Development (DFID) has no direct investments in the oil and gas industry in Africa. DFID does provide assistance to governments to improve their capacity to make best use of oil and gas revenues, though most of this investment is not in Africa. Recent expenditure in Africa includes Sudan, where DFID looked at the impact of oil and gas development on the war and its impact on peace and the social and economic situation.

DFID supports the Extractive Industries Transparency Initiative (EITI) which aims to increase the potential of extractive industries as an engine for economic growth and sustainable development. It seeks to improve transparency over payments made to governments by extractives companies and revenues received by governments in resource rich developing countries and also works on building mechanisms to hold governments accountable for these revenues. We have measured impacts to date in terms of the number of countries signed up to implement EITI, of which nine are African countries. DFID has also provided approximately £2.4 million in bilateral support to the Nigerian Government. Evidence of EITI's success is currently anecdotal. For instance, over 90 per cent. of Nigeria's revenue comes from oil and gas. Since its inception in 2001 the Nigerian Extractive Industries Transparency Initiative (NEITI) has carried out technical studies which so far have led to the recovery of £500 million in otherwise forgone revenues. The new independent EITI Secretariat will conduct impact reviews and qualitative evaluation work as part of their annual review. These will be presented at the next EITI Conference which will take place in the autumn.

To date DFID has spent approximately £6.9 million to support EITI work. The majority of this support has been in the form of contributions to the EITI Multi Donor Trust fund (MDTF) (about £3.32 million) which supports resource rich developing country governments to implement EITI.

Nine African countries that have been assessed by the EITI Board to be successfully implementing EITI are Cameroon, Gabon, Ghana, Guinea, Liberia, Mali, Mauritania, Niger and Nigeria. These countries have now been assessed as candidate countries.

Seven African countries that are implementing EITI and will be assessed in 2008 by the EITI Board are Chad, the Republic of Congo, the Democratic Republic of the Congo, Equatorial Guinea, Madagascar, Sao Tome and Principe, and Sierra Leone.

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