How Health and Education Pay the Price for Self-Dealing in Equatorial Guinea

The president of Equatorial Guinea, Teodoro Obiang Nguema Mbasogo, once described the discovery of oil in the 1990s off the coast of the small Central African nation as “manna from heaven,” the Biblical life-saving bread that God sent Israelites as they wandered in the desert. Ravaged by almost six centuries of colonialism followed by an eleven-year brutal dictatorship, the country was one of the world’s poorest and most poorly governed in 1979 when Obiang deposed his uncle and took power.

The discovery of oil in 1991 had the potential to change the fortunes of Equatorial Guinea, and it did, in many ways. Before the discovery of oil the country’s total income was US$132 million, or $330 per capita. Within the next decade per capita gross domestic product (GDP) rose significantly, comparable to that of many industrialized nations—peaking in 2012 at $19 billion ($24,304 per capita). However, oil production has been in decline since 2012, and oil is expected to run dry by 2035 unless new reserves are found.

Equatorial Guinea’s mismanagement of its oil wealth has contributed to chronic underfunding of its public health and education systems in violation of its human rights obligations.

Suddenly the small country of about one million people occupying 28,050 square kilometers had a great but fleeting opportunity to deliver exemplary social services to its citizens in line with its human rights obligations. Obiang raised expectations, repeatedly saying he would prioritize health services and education, but budgetary allocations to health and education have in fact been dismal: in 2011, the most recent year for which there is data, the government spent three percent of its budget on education and less than two percent on health, according to the International Monetary Fund (IMF). Forty-five other countries in Equatorial Guinea’s per capita GDP range spent at least four times as much on health and education during the same period. Instead the country invested heavily in large-scale infrastructure projects, which comprised 82 percent of its total budget in 2011, an approach the IMF and World Bank have repeatedly criticized.

Map of Equatorial Guinea
Equatorial Guinea is one the smallest countries in Africa, with a population of around 1 million and a total landmass of just over 28,000 square kilometers.

Obiang, the world’s longest-serving president, justifies the huge investment in infrastructure as part of a strategy to lay the groundwork for a modern economy. Undoubtedly this investment has improved the country’s transportation infrastructure, which includes a network of more than 2,000 kilometers of roads, five airports, and eight ports, as well as several modern hospitals and a national university campus. But, according to the IMF, such an approach “contribut[es] to low provisions for health and education service delivery.” It also found that “costs and wastage have been high” for infrastructure projects, “because of limitations in oversight and pressure for prestige projects.”

This report shows how the government of Equatorial Guinea has for two decades paved the way for this reality, squandering the promise afforded by its discovery of oil by grossly underspending on social welfare and overspending on wasteful and corruption-riddled infrastructure projects. In the process, it has not fulfilled its human rights obligations to progressively realize the right to affordable and decent health care and education for its people. The report describes how, though upper middle-income on paper, Equatorial Guinea faces severe challenges that commonly affect low-income countries, especially in health and education. It documents how companies, fully or partially owned by the president, members of his family, or senior government officials, have been awarded large public contracts. In some cases, businesspeople allege that they were encouraged by government officials to submit inflated contracts so that the officials could collect considerable kickbacks.

In addition, this research adds to a significant body of work on corruption in Equatorial Guinea, including numerous international investigations that have uncovered evidence of high-level corruption. A 2004 United States Senate investigation into Riggs Bank, a Washington, DC-based commercial bank, for example, revealed direct transfers of millions of dollars from accounts holding the country’s oil wealth into accounts believed to be controlled by the president. Money-laundering investigations into the president’s eldest son, who was appointed vice president in June 2016, allege how within a period of about five years, he spent $110 million in the United States and €175 million (US$189 million at current exchange rate) in France. The French prosecutor alleged that €110 million was transferred from Equatorial Guinea’s public treasury to Teodorin’s personal accounts, part of which funded his French spending spree.

There is an ongoing trial in Spain based on evidence that senior government officials purchased mansions in the country with funds transferred from the Riggs Bank oil account. In Italy, the financial police, when investigating one of the largest construction companies operating in the country, found millions of dollars linked to a network of international bank accounts owned by the president and his son.

All of this contributes to the government’s woeful underinvestment in health and education, at great human cost.

Neglecting the Right to Health

With the discovery of oil, Equatorial Guinea had a great opportunity to improve healthcare by investing in the provision of potable water, adequate sanitation, infection control, and other key determinants of health, as well as in the strengthening of its public healthcare system.

For two decades it has largely failed to seize this chance due to underinvestment in the social sector, when compared to other countries in its income bracket, and misspending on capital projects, such as the sophisticated new La Paz hospitals in Malabo and Bata that appear to be almost exclusively for the benefit of elites—rather than on primary healthcare that benefits most citizens.

A graphic showing health indicators in Equatorial Guinea versus Africa

While a lack of data makes it hard to fully assess Equatorial Guinea’s performance on key health indicators, available data suggest that despite having far superior resources compared to other countries in the region, there has been little progress. For example:

  • Equatorial Guinea ranks 138 out of 188 countries in the United Nations Development Programme’s (UNDP) Human Development Index, a measure of social and economic development. Its score is similar to those of Ghana and Zambia, despite boasting a per capita income that is more than five times as high.
  • More than half of Equatorial Guinea’s population lacks access to safe drinking water in the vicinity, a rate that has not changed since 1995.
  • Vaccination rates for children have fallen dramatically since the late 1990s and are among the worst in the world. For example, the reported rate for tuberculosis vaccination for newborns and infants was 99 percent in 1997; 64 percent in 2014; and 35 percent in 2015, the last year for which data is available.

Additionally, a 2011 household survey studies found that one in four children are physically stunted due to poor nutrition, and two-thirds are anemic, as are half of women. The World Bank estimates that 60 percent of deaths are the result of communicable diseases or preventable maternal, prenatal, or malnutrition-related illnesses. Maternal mortality is one health indicator on which Equatorial Guinea has apparently made progress at a greater rate than most other countries in the region, with such deaths down from 1,050 per 100,000 live births in 1995 to 342 in 2015, according to the United Nations.

Despite being considered an upper middle-income country, Equatorial Guinea’s healthcare system continues to suffer from many of the ailments that typically afflict healthcare systems in low-income countries: inadequate staffing, long waiting times, stock-outs of basic medications and medical supplies, and frequent misdiagnoses. Doctors, nurses and patients told Human Rights Watch that Malabo General Hospital required out-of-pocket payment up front for any service, and that those who are unable to pay upfront are regularly turned away. “If people [in critical condition] don’t have money, they die,” a doctor who worked in the General Hospital in Bata said.

With the limited funds allocated to the health sector, the government has heavily invested La Paz, the two modern hospitals in Malabo and Bata staffed largely by foreigners. Both hospitals are well-equipped and charge fees that are well beyond what ordinary Equatoguineans can afford to pay.

Neglecting the Right to Education

Government neglect of education is reflected in the poor condition of facilities and quality of services, as well as outcomes that frequently lag behind regional averages and, in some cases, are even worse than the situation prior to the oil boom. For example:

  • In 2012 42 percent of primary school-aged children—46,000 children—were not in school, the seventh worst enrollment rate in the world, mostly topped by war-torn countries.
  • Half of children who begin primary school never complete it, and less than one-quarter who do go on to middle school.
  • Late starts and high repetition rates mean that the ages in any given class can vary widely. In 2012 only 57 percent of students were in the correct grade for their age, a ten percentage point decline from 2000, according to the United Nations Educational, Scientific and Cultural Organization (UNESCO), a specialized UN agency.

Equatoguinean law provides for free primary school, in line with international human rights law, which also requires Equatorial Guinea to work toward eliminating fees for secondary school as available resources allow. Yet local partners and education specialists said that public primary schools charge at least some fees to enroll.

Many teachers are poorly trained or have no training at all, leading to poor quality in public schools. Since 2006 many teachers have received training through a 10-year program jointly funded by the government and Hess Oil, which operates in the country. According to UNESCO’s data, just under half of primary school teachers had some kind of training in 2011.

Equatorial Guinea has invested only a tiny fraction of its budget in its education system, and the bulk of the money spent on education has gone to the university level. A confidential 2016 government report allocated 64 percent of the budget for a multiyear “Education for All” program to higher education, even though it only represents only 2 percent of students, according to the World Bank.

Overspending and Self-Dealing on Infrastructure

Government underfunding of health and education stands in marked contrast to lavish spending on large-scale infrastructure projects, many of which are of questionable social utility and risk being a key conduit for corruption and mismanagement. Human Rights Watch found evidence that senior government officials have stakes in companies that receive public construction contracts, including the president and his family.

Government investment in social sector vs transportation infrastructure

After spending huge sums of money on buildings in both the island capital of Malabo and the largest city, Bata, which is located on the mainland and functions as an alternate capital, the government is now constructing a new administrative capital, Oyala, in the middle of the jungle. Although the total cost of Oyala is not known, it is expected to account for half of all public investment in 2016, according to an unpublished report by the IMF. Local content rules that require all companies operating in the country to have at least 35 percent local ownership appear to have been misused to steer business to companies that serve primarily to fill the pockets of politically connected people. The IMF notes the high spending on Oyala in the context of “limited movement on structural reforms, and weak governance and corruption [that] remain a serious impediment.”

After having spent hundreds of millions of dollars on government buildings in the capital of Malabo and economic center of the mainland, Bata, Equatorial Guinea is pouring billions of dollars into building a new administrative capital, Oyala.

After having spent hundreds of millions of dollars on government buildings in the capital of Malabo and economic center of the mainland, Bata, Equatorial Guinea is pouring billions of dollars into building a new administrative capital, Oyala, in the middle of the jungle. The IMF estimated that spending on Oyala would consume half the national budget in 2016. Above is a satellite image of the city under construction on January 12,2015.

 Satellite imagery © 2017 NASA

A US State Department cable made public by WikiLeaks alleged that the country’s sole cement importer, Abayak, is “partially owned by the president and first lady.” An Italian businessman, Roberto Berardi, founded a construction company with the president’s eldest son and putative successor, Teodoro Nguema Obiang Mangue (“Teodorin”), who was then the minister of forestry but was appointed vice president in 2016. Berardi wrote in a formal statement that Teodorin did not contribute any capital or time to the company, and his sole function was to secure subcontracts from lucrative public projects awarded to ABC Construction, at least partly owned by the first lady.

A US Department of Justice investigation, which ultimately settled in 2014, into alleged money laundering by Teodorin revealed allegations that he directed one of the largest construction companies operating in Equatorial Guinea to submit grossly inflated bills to the government, many of the funds from which were then transferred to his personal account.

The US investigation settled in October 2014 when Teodorin agreed to forfeit $30 million —approximately the value of his mansion in Malibu, California—to be given to a charitable organization and used for the benefit of the Equatoguinean people. A French court investigated Teodorin’s spending more than €175 million euro on a Paris mansion, fleet of luxury cars, designer goods, and other extravagances. Teodorin maintains that the money came from legitimate businesses, but on May 25, 2016, the three judges presiding over the case found sufficient evidence of suspected money laundering and diversion of public resources to order Teodorin to stand trial, expected to take place on June 19, 2017.

By squandering enormous wealth the government has already missed opportunities to invest in health and education. The long-term decline and inevitable demise of the oil sector now leaves the government very little time to correct course and invest significantly and sustainably in these sectors. The fall in oil production and historically low oil prices have already caused Equatorial Guinea’s GDP to shrink by 29 percent between its high in 2012 and 2016; the IMF expects future contraction.

De nombreuses zones résidentielles ne bénéficient que de peu d'investissements gouvernementaux, voire d’aucune assistance financière, alors que des budgets colossaux sont consacrés à des dépenses liées à des bâtiments gouvernementaux et à divers projets.

De nombreuses zones résidentielles en Guinée équatoriale, comme ce quartier de la capitale, Malabo, ne bénéficient que de peu d’investissements gouvernementaux, voire d’aucune assistance financière, alors que des budgets colossaux sont consacrés à des dépenses liées à des bâtiments gouvernementaux et à divers projets prestigieux.

 © 2016 Human Rights Watch

To meet its human rights obligation to progressively realize its citizens’ rights to affordable and decent health care and education, the government should immediately shift investment priorities and undertake comprehensive reform to stem corruption, regulate conflicts of interest, and make the public procurement process transparent and competitive.

Given the country’s small size even modest social investment could go a long way. It is not too late to take urgent measures that would put the country’s oil wealth to work for the good of all Equatoguineans, but the window of possibility is closing fast.

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