We now know how Nigeria loses so much money in oil revenues

It has long been a mystery exactly how Nigeria could be rich with oil yet so very poor. We know corruption within government to be the culprit, but we have little evidence as to how all the money is stolen. A leader in the Nigerian government who has had success in tackling corruption was charged with investigating what happens to oil revenues. Nuhu Ribadu, head of the Financial Crimes commission has completed his work and we finally have some evidence on the graft. Already politicians from both sides who are suspected of being the thieves are trying to discredit the report.

From the Guardian, writer Simon Allison details some of the corruption that Ribadu uncovered. 

Some of the highlights include: the state oil firm selling oil to itself at ridiculously low prices, short-changing the treasury to the tune of $5-billion; failing to collect royalties from the likes of Shell and Sinopec, creating a $3-billion black hole in accounts; "losing" hundreds of millions of dollars owed to the government as signatures bonuses on new deals; and allowing oil ministers to award contracts at their own discretion, without even an attempt at a tender process.

The most damaging allegation involved the state oil firm and oil companies Shell, Total and Eni, which together owned a subsidiary company called Nigeria LNG. This company acted as a middle man, buying oil on the cheap from the government and selling it on to international markets at a vastly inflated price. Ribadu's report estimates that if the government had just sold the oil at market price, they would have made an additional $29-billion.

Predictably, Ribadu's report was not exactly met with enthusiasm by other officials in the Nigerian government. Particularly harsh criticism has come from two members of the committee that helped draft it. They say the report is based on incomplete, unverified data and that Ribadu makes claims that cannot be sustained by evidence. Unfortunately for the credibility of these two critics – Steve Oronsaye and Bernard Otti, both senior government officials – they were both offered and accepted lucrative positions on the board of the state oil firm while continuing to sit on the committee investigating it. Nigerian media has largely dismissed their criticisms as a failed attempt at damage control.

"The reservations of some members of the Task Force must not be allowed to cast any shadow over the urgent need for the security agencies to bring all those indicted to justice," wrote the influential Leadership newspaper. "We thank the Ribadu committee for showing the nation some of the reasons why Nigeria is a rich nation with poor people."

Having received the report, Jonathan is now under increasing pressure to act on its findings. Whether he can do so – and whether he can in turn make a Nigeria a rich nation with moderately less poor people – will be the ultimate test of his administration.

The handicapped smugglers of Benin

The tiny African nation of Benin has poorly secured borders. This makes smuggling goods out Nigeria a major problem for both countries. Nigeria is one of the biggest producers of oil in the continent. They also subside the price of oil so it is about half of the price as it is in Benin. So it is oil and gas that is often smuggled over.

A story from the Guardian this morning tells us that the handicapped of Benin have used the situation to their advantage. They hack their wheelchairs so they can store oil within them or with attached trailers. Because they are disabled, the border agents don't hassle them. The smuggling provides good income for the handicapped in a country where they have little else to do.

Guardian writer Monica Mark describes this practice. 

A childhood polio survivor, Isaac chose one of the few careers available to wheelchair users in Benin: smuggling.

When night falls, a host of ingenious home-made vehicles emerge on the sandy roads that connect this little lick of land with its giant oil-producing neighbour, Nigeria. From rusting trays on wheels to wagons cobbled together from spare parts, each is designed to lug as much fuel as possible.

Among the improbable vehicles are modified scooters designed to be driven by disabled people – and hide four 50-litre jerrycans at the same time. They provide a financial lifeline for thousands in a country where disabled people face social exclusion as well as one of the world's highest rates of poverty.

"Because of our handicapped condition, the border agencies don't bother us. Nobody asks us any questions, and we can cross the borders easily," said Isaac one recent evening as a friend helped him on to his Vespa near the frontier.

Tiny west African neighbours Benin and Togo have long been havens for smugglers, who slip easily through poorly policed frontiers and shorelines. Cocoa, frozen poultry and second-hand clothes are the main trafficked goods, border agencies say. But the trail is dominated by a network of illicit fuel traders. They fill up on cheap, subsidised Nigerian fuel before returning to sell it at a rate that undercuts official prices in Benin's filling stations.

"So many do it that recently the customs officers have started asking even [disabled people] for a cut of our profits," Isaac said as an uninterested border guard waved him through the first checkpoint.

 .....

Most nights of the week, Isaac will make a two-hour round trip to a Nigerian border town, jostle his way to the front of large crowds at fuel stations and return with enough fuel to fill up four 4x4s. Three nightly trips brings in around $75 profit.

Mineral wealth leads to slower economic growth for some African nations

One of the sad paradoxes of Africa's oil producing countries is that there can be great wealth under ground, but very little for the people above it. Oil producing nations can pump a lot of oil, but all of that money never seems to change poverty levels.

A new report from the World Bank shows that economic growth in oil producing nations is actually slower that African countries without it. From the Guardian, writer Mark Tran unpacks the report.

Africa's Pulse, a twice-yearly analysis of Africa's economic prospects, noted that the decline in poverty rates in resource-rich countries has generally lagged behind that of countries without riches in the ground. Some countries, such as Angola, Congo-Brazzaville and Gabon, have witnessed an increase in the percentage of the population living in extreme poverty.

The report confirms the common perception that, to a large extent, the benefits of growth have not reached the poorest segments of society. It raises questions for aid donors and African governments on how to deal with the "resource curse", with strikes in South African mines providing a stark illustration of what is at stake.

"Resource-rich African countries have to make the conscious choice to invest in better health, education, and jobs, and less poverty for their people, because it will not happen automatically when countries strike it rich," said Shantayanan Devarajan, the World Bank's chief economist for Africa, and lead author of Africa's Pulse. "Gabon, for example, with a per-capita income of $10,000 (£6,200) has one of the lowest child immunisation rates in Africa."

How to ensure that natural resources benefit the general population, not just the elite, is a question likely to grow more acute as discoveries of oil, gas and other minerals in African countries are expected to generate considerable wealth in the future.

...

Africa's Pulse underlines the continent's heavy dependence on commodities for its recent growth, although domestic demand has played its part. Sub-Saharan Africa is expected to grow at 4.8% in 2012, broadly unchanged from 4.9% growth in 2011, and is largely on track despite setbacks in the global economy. Excluding South Africa, the continent's largest economy, growth in sub-Saharan Africa is forecast to rise to 6%.

While African economies have not been immune to the crisis in the eurozone, the World Bank said consistently high commodity prices and strong export growth in countries with mineral discoveries in recent years have fuelled economic activity and are expected to underpin economic growth for the rest of the year.

Inflation in South Sudan makes life harder for female farmers

Inflation has been rising rapidly in South Sudan throughout the year. The cause of the inflation is blamed on an oil production shutdown. South Sudan stopped producing oil because of their ongoing conflict with "North" Sudan. This inflation has crippled the ability of South Sudan's poor to earn a decent wage. Pile this on top of floods and drought for the poor farmer.

From this Sudan Tribune article that we found at All Africa, writer Bonifacio Toban Kuich profiles some women trying to earn a wage at a farmers market.   

Rebecca Nyamuoka Kuay a 25-year-old vegetable seller in Kalibalek market says that her small business is helping her family survive, despite high levels of inflation.

Kuay says she and her fellow women often have to sit in the sun, waiting for customers to buy their vegetables.

"Before the prices increase, women use to get 50 SSP per day in the process of selling vegetables. But due to recent inflation women find it hard for 50 SSP to buy 5Kg of sorghum in the market as the market price increase every day", said Kuay.

Kuay called on the government to control the high increases in food prices in the market by limiting taxes on traders so that citizens can afford to eat.

Nyakuoth Kuol walked 20 miles each day to Bentiu town to sell milk in Kalibalek market in order to afford health care for her sick 5-year-old daughter who is in hospital. However, she told Sudan Tribune that thieves stole 200 SSP (approx. $65) while she was selling her milk.

Kuol says she is giving up selling milk in the town after she lost her money.

"I came here yesterday upon my arrive, some guys came and steal my money, I got discourage with the business, my present here was to rise up money, this is really making me very shame as I thought my coming was to solve my problem with my children", Kuol added.

Resource curse precedes oil production in Uganda

Oil well digging has begun in Uganda. What lies underneath the land could bring riches to those above. Already there are allegations of bribes to senior ministers of the government. Before a single barrel of oil is produced the term "Resource Curse" is being used to describe Uganda, just as it is in Niger Delta.

From IRIN, this analysis takes a look at curse that could come with oil drilling in Uganda.

Prime Minister Amama Mbabazi has been accused of receiving funds to lobby for oil production rights on behalf of the Italian oil firm ENI, which eventually lost its bid for exploration rights to British firm Tullow Oil. Along with Mbabazi, Foreign Affairs Minister Sam Kutesa and Internal Affairs Minister Hilary Onek are both accused of taking bribes from Tullow Oil worth over US$23 million and $8 million respectively.

The ministers and Tullow Oil deny all the allegations, but MPs on 11 October demanded the ministers' resignations and formed an ad hoc parliamentary committee to investigate them; Kutesa has now stepped aside from his ministerial position to allow investigations into separate charges of abuse of office and causing financial loss relating to the Commonwealth Heads of Government Meeting held in Uganda in 2007.

Oil exploration began in Uganda’s northwestern Lake Albert basin nearly a decade ago; the Energy Ministry estimates the country has over two billion barrels of oil; Tullow operates three oil blocks in the region, and had sold off part of its stake to Total and China's CNOOC. However, following the allegations of bribery, parliament has halted the sale.

The revelations of possible large-scale graft have caused outrage in the population. The discovery of oil had given hope to a country that despite more than 25 years of relative stability, remains poor. The UN Development Programme reports that 51 percent of the population lives below the poverty line.

“We were so excited when we heard about oil, we knew we would at least get roads, better electricity supply and better hospitals but now it seems that, as usual, all the money is going into the pockets of a few,” said Asuman Kasule, a taxi driver in the capital, Kampala.

No regulatory framework

Analysts say that while the allegations of corruption are troubling and must be addressed, Uganda has bigger problems when it comes to its nascent oil industry. Oil production is due to begin as early as 2013, but the country has not put in place a regulatory framework for the oil industry; the existing legislation on oil and gas exploration was passed in 1993, and analysts say it is not sufficient to deal with the current dynamics.

In addition, the country has not put in place measures to ensure transparency, inclusion of local communities, revenue management and the mitigation of environmental damage. A 2008 National Oil and Gas Policy was intended as a road map for the handling and use of the oil, but critics say many of its recommendations have not been followed.

"As of today, Uganda does not have an oil revenue management framework," Richard Businge, senior manager at International Alert, a peace and conflict NGO, told IRIN. "Government’s argument is that the country has sufficient income and tax laws, which is not necessarily the case because the oil industry is a unique one, which requires a more specific revenue management law. The oil development process has been shrouded in secrecy, breeding confusion and suspicion."

Transparency

Parliamentarians say oil production sharing agreements dating as far back as 2001 were only shared with them in September 2011. Attorney-General Peter Nyombi Thembo has said the agreements contain confidentiality clauses that prevent the government and parliament from disclosing their contents to third parties.

During a heated debate on 11 October, parliament passed a resolution banning confidentiality clauses in any future oil contracts with foreign companies.

"A lot has gone on in the oil industry without the knowledge of the Ugandan public, and a lot is still going on,” Tony Otoa, a researcher with Advocates Coalition for Development and Environment (ACODE), a public policy think-tank, told IRIN. "This sort of secrecy - which covered up patronage, corruption - is what preceded the problems Nigeria had in the early stages of its industry."

Otoa said it would be crucial for Uganda to join international mechanisms for transparency in the oil and gas sector such as the Extractive Industries Transparency Initiative (EITI), an international scheme that attempts to set a global standards for transparency in oil, gas and mining. Implementation of EITI would mean regular, accessible publication of all payments by oil companies to governments and all revenues received by governments from oil companies. The National Oil and Gas Policy recommends that Uganda participate in EITI.

Another such mechanism is Publish What You Pay (PWYP), an international network of civil society organizations that call for oil, gas and mining revenues to form the basis for development and improve the lives of ordinary citizens in resource-rich countries.

"The oil industry is still young, but payments in the millions of dollars have already been made to the government in signing bonuses, licensing fees and so on, but the government has so far been unwilling to share the amounts that have been paid nor the way the money has been spent," said Winfred Ngabiirwe, of PWYP's Uganda chapter. "There has been some flip-flopping by the government on whether it will join EITI, but so far there has been no firm commitment."

Local communities

Ngabiirwe said transparency and open revenue management would be key to ensuring that the local populations in the oil producing areas were able to benefit from the proceeds of the production and lift themselves out of poverty. "As it is, the local populations are not really informed of their rights and we are often blocked by politicians from visiting these areas to enlighten them," she said.

In the areas where PWYP has been allowed to operate, they have set up grassroots chapters of the organization to allow communities to understand and communicate their needs and demand that the oil revenues be used for the development of their areas.

"It’s true that fishing and farming have been interrupted; some communities... have been asked to relocate while others... were notified to prepare to leave," said International Alert's Businge. "The compensation given to them is inadequate - this is determined by government - while those who have to put up with oil activity have to regulate their activities either on farm or on lake. Most of the corporate social responsibility work that companies are doing to kind of buy the `social ticket’ is on infrastructure development and not necessarily responsive to key pressing survival needs of the local communities."

According to a study by Uganda's Makerere University on managing oil expectations, local communities have "expressed hope that oil revenues will result in a better road and railway network, high quality education and health care, a regional technical and university infrastructure, and considerable employment opportunities". However, the study also found that local communities were not involved in the drafting of the National Oil and Gas Policy and were not informed of the oil companies' activities in their region.

And according to ACODE’s Otoa, while it is important for parliament to go after corrupt individuals, it is equally important that they stand up for the rights of local communities and urge environmental caution.

“Our parliamentarians are largely uninformed about the oil sector, so we regularly hold workshops to try and ensure that when the time comes for them to debate an oil bill, they are aware of the key issues that need to be taken into consideration,” he said. “Bodies like the National Environment Management Authority also need their capacity boosted, because they too are inexperienced in the type of environmental damage caused by the oil industry.”

Another important area, according to Henry Banyenzaki, minister for economic monitoring, would be ensuring that Ugandans are trained and employed in various aspects of the oil industry, and that local businesses are geared towards supplying the oil industry.

“We are not moving as fast as we should in government because of bureaucracy, but we need to prepare the private sector as well so that they can get the maximum benefit from the industry,” he said.

Banyenzaki said the government would need to ensure that other key resources - including agriculture and tourism - did not suffer as a result of the focus on oil, a concept known as “Dutch disease”.

"Uganda’s oil wealth can be transformational for Uganda’s economy but this largely depends on how well it is managed... [but] in the absence of proper revenue management and critical forward thinking, the exploitation of oil does not necessarily translate into sustainable socio-economic transformation," said Businge. "

Video: Oil and democracy in Niger Delta

From Al Jazeera, a video about the effects of oil on the environment and the people in the Niger delta.

Sudan and the oil resource curse

From Al Jazerra, this video shows Sudan's version of the oil resource curse.

How does Ghana avoid the oil curse?

Ghana begins drilling for oil today. An oil field called Jubilee should produce 120,000 barrels a day for the next 20 years.

We have seen oil be a curse more so than a blessing in other parts of Africa. Bad governance has sucked all of the oil revenues away into a few corrupt pockets instead of being used to bless the people. The country of Ghana is often held up as a good example of governance by the western world. So how does Ghana avoid from falling into the same curse?

We have two different perspectives on this topic. First the website The Africa Report has an exhaustive study on the Ghana oil. One sidebar to the study concentrates on the how to avoid the oil curse.

This time it must be different. That is the oft-heard demand from 
activists, politicians and business-people when discussing oil’s potential in Ghana. The discovery of the Jubilee field – with about 1.8bn barrels – is different from its African counterparts. It is the first time substantial amounts of oil and
gas have been found in one of Africa’s established democracies.


Estimates on the quantum of Ghana’s oil wealth vary hugely. The common starting point is that Jubilee will produce about 120,000 barrels per day and some $1.2bn in government revenue a year for 20 years. The adjacent Tweneboa field is reckoned to be as big as Jubilee’s, but industry experts forecast the biggest finds will be onshore in the Keta basin. With companies like Exxon Mobil, BP, ENI and Sinopec
vying to buy equity in the Jubilee field, the assumption is that Ghana has several billion barrels of reserves. 


A key imperative, according to the World Bank’s Sébastien Dessus, is revenue transparency. That means signing up to full disclosure under the Extractive Industries Transparency Initiative and working with civil society groups on the analysis of contracts and the monitoring of environmental impact. Then there are the corrosive effects of revenue accruing to an over-centralised government. Worst of all is the ‘Dutch disease’, under which the currency appreciates as oil revenues flow. Bank of Ghana Governor Kwesi Bekoe Amissah-Arthur says he is determined to hold down the value of the cedi against the US dollar to maintain the
competitiveness of exports.

Next, this Oxfam press release points to the lack of transparency that they already find in Ghana's oil production.

On Wednesday, December 15, Ghana will celebrate the start of oil production at the major offshore “Jubilee” field, kicking off an oil boom expected to bring billions of dollars into the country. As Ghana prepares to “turn on the tap” with an elaborate inauguration ceremony, international humanitarian organization Oxfam America urges the government to quickly address large gaps in the legal framework needed to make the most of the billions in government revenue Ghana will receive from the sector.

“The start of oil production represents an important opportunity for Ghana. However, we are concerned that three-and-a- half years after discovery of the Jubilee field, there is still no oil revenue management law in place and no independent regulator established for the sector. Ghana has an enviable recent track record of progress on fighting poverty and improving democratic accountability, but the sudden onset of oil wealth often comes at the expense of good governance and effective development. Ghana’s challenge as an ‘oil hot spot’ will be to manage this industry with transparent and accountable policies and practices, so the people of Ghana can truly benefit over the long term,” said Ian Gary, Oxfam America’s Senior Policy Manager for Extractive Industries and author of the Oxfam report, Ghana’s Big Test: Oil’s Challenge to Democratic Accountability.

By early 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day. The Jubilee field has 500 million barrels of proven reserves and a potential for over 1 billion barrels. The production rate is expected to supply more than $400 million to the government’s 2011 budget and around $1 billion per year into the country in the early years. Promising indications from adjacent exploration oil wells could mean even higher levels of production and reviews in the next few years.

The Ghanaian government must establish a legal framework that ensures transparent publication of oil payments received, open and competitive contract bidding and contract disclosure, and active monitoring and participation by civil society. While there have been some positive signs – Ghanaian President John Atta Mills promised disclosure of oil contracts in March 2009 and a petroleum revenue management bill tabled in the Ghanaian Parliament in July contained important transparency and safeguard provisions – with first oil right around the corner, the necessary laws and systems have not been put in place. Despite government commitments, oil contracts remain unavailable to the public.

“The Ghanaian Parliament is currently debating an oil revenue bill, and important provisions – such as a prohibition against using oil revenue as collateral for loans – have already been stripped out of the bill. A Petroleum Exploration and Production Bill, which had numerous weaknesses, has been shelved. Celebrations of first oil are clouded by the fact that the government has yet to establish an independent regulator since the Jubilee discovery was announced in 2007,” said Richard Hato-Kuevor, Oxfam America’s Extractive Industries Advocacy Officer in Accra, Ghana. “These oil laws involve national questions that require national consensus. There is simply too much at stake for Ghana to adopt inadequate laws to manage this massive industry.”

The removal of a ban on using future oil revenues as collateral for loans is particularly worrying. Many oil producers around the world – such as Nigeria, Angola and Congo-Brazzaville – have gone deep into debt due to unsustainable oil-backed borrowing. Such loans, with steep interest rates and short repayment terms, are often taken out in secret with little or no parliamentary or public scrutiny. Recent press reports have noted that the state oil company, the Ghana National Petroleum Corporation, is working with Deutsche Bank and other private banks to secure a $500 million loan. The terms and purpose of the loan are not clear.

Ghana is one of the most peaceful and relatively prosperous countries in West Africa but remains poor with the majority of Ghanaians living on less than $2 a day. While poverty needs are pressing, stabilization and savings funds must be established and funded to avoid the price shocks and wasteful spending in the early years of an oil boom, which have bedeviled other countries.

Historically, the exploitation of natural resources in Africa has far too often led to increased poverty and conflict, a phenomenon often referred to as “resource curse.” In 2009, Africa produced 13 percent of the world’s oil with great investment and exploration throughout the continent, but this has yet to translate into tangible benefits for Africa’s poor. In fact, resource-rich countries in Africa have actually experienced lower growth rates than countries with scarce resources.

“Oil wealth threatens the growing democratic accountability that has been built in Ghana’s recent history,” said Mohammed Amin Adam, convener of Ghana’s Civil Society Platform on Oil and Gas. “This industry presents very real risks to Ghana’s fragile economy, including incurring too much debt through oil-backed loans. We as Ghanaians need to see December 15th as a day to wake up to these challenges and hold our government accountable for the management of this enormous opportunity for the country.”

In March 2011, Oxfam will publish a “Readiness Report Card” analyzing Ghana’s efforts to prepare its oil boom.

Oil unrest in the Cambinda region of Angola

The Cambinda portion of Angola is an oil rich region, and similar to neighboring country Nigeria it causes a lot of unrest. People are tired of not seeing any benefits from all of the oil-production, so some have even resorted to violence. However, there is little reason for the oil companies to be concerned about the unrest, because most of the oil drilling is offshore, beyond the reach of any militants.

From Reuters India, writer Henrique Almeida profiles the Cambinda region of Angola.

For the half a million residents of the impoverished territory, the oil has brought few benefits. The region caught international attention in early January when FLEC rebels ambushed the bus of Togo's visiting soccer team, killing two.

"Cabindans are tired of not seeing the oil money," said Martinho Nombo, a former vice-governor of Cabinda who is now a lawyer and university professor. "Ever since FLEC carried out the attack in January tensions have been rising."

FLEC, or Front for the Liberation of the Enclave of Cabinda, has been locked in three decades of mostly low-level insurgency against the government.

Heavily armed police have been seen patrolling the streets of Cabinda months after the rebel attack.

"We don't want to speak about FLEC. That is being treated within the realm of international terrorism," Mawete Joao Baptista, the governor of Cabinda, told Reuters.

"Our attention at the moment is focused on the economy and improving the lives of Cabindans."

His urgency has a reason: both FLEC rebels and ordinary Cabindans claim to see little of the money that comes from their land.

The oil curse of Angola and Nigeria

As US Secretary of State Hillary Clinton visits Angola and Nigeria, it's worth another look at how oil does little to improve the lives of people there. Politicians take all of the money from oil revenues for themselves. The money and the oil make the keep the politicians from having to court voters to keep their jobs, as the two countries are democracies only in name.

Clinton is visiting the area in an effort to improve relations with the two countries. The US hopes to purchase more oil from Africa instead of relying on the Middle East.

From this Associated Press article that is hosted at Google News, Katharine Houreld does another piece on the curse of oil.

Nigeria has a history of coups and the last elections here were marred by voting irregularities and police firing tear gas at lines of voters. In Angola's last parliamentary election, money, alcohol and even cars were dished out and many polling stations didn't open for lack of materials, international observers found. Angola was in civil war from the 1970s to 2002. It has not held presidential elections since the war ended.

Just last week, Global Witness, a London-based watchdog group, reported that several shareholders of a private firm authorized by Angola's state oil company to bid for lucrative contracts have the same names as top current and former Angolan officials, including the state oil company chairman. The officials have not responded to repeated requests from Global Witness and reporters for a response.

"Despite the widespread perception that government corruption at all levels was endemic, there were no public investigations or prosecutions of government officials during the year," said a report this year by the U.S. State Department.

More than two-thirds of 12 million Angolans and more than four-fifths of 150 million Nigerians live on less than $2 a day. Many feel neglected by their leaders.

"They don't care about the small man. Not at all," said Sam Olufemi, selling phone cards amid one of Lagos' perennial traffic jams. "It's pay-as-you-go politics."

Angola has suffered unrest in Cabinda, the main oil-producing region. Human rights groups have accused the military of atrocities and claim government officials have embezzled millions of dollars in oil revenue. The government has denied the charges.

Thousands have been killed over the years in Nigeria's oil-rich Delta, where the military battles criminal gangs by firing into slums from helicopter gunships and militant groups bomb pipelines and kidnap foreigners.

Oil producers 'must do more to fight poverty'

from The Gulf News

By Emmanuelle Landais, Staff Reporter

Dubai: An international organisation has called on oil producing countries to do more to eradicate poverty in rural areas.

The International Fund for Agricultural Development (IFAD) said more than 800 million people are living on less than a dollar a day in rural areas of Asia and Africa yet only 100 million of them get international aid.

Mona Bishay, director of IFAD's Near East and North Africa division, said rural poverty is a phen-omenon with the number of people living on a dollar a day or less estimated at 59 million.

Bishay said funds and grants have been given to countries in the Middle East for technological development.

Iraq, Syria, Palestine, Turkey, Yemen, Sudan, Egypt and North African countries are some of the countries where IFAD projects target the poorest residents and the agriculture sector.

"We don't target irrigated areas, it is only dry areas with minimal rain, mountainous areas and isolated areas.

"Unemployment among young people has reached 35 per cent in North Africa. This is a very serious problem," said Bishay.

She said poor rural areas had been surveyed to gather information.

"Our dream is to create innovative models so bigger organisations can adopt them. We have to go through the government, we cannot just do it by ourselves," said Bishay.

Lennart Bage, president of IFAD, said countries in the Organisation of Petro-leum Exporting Countries (Opec) were giving support but some countries had increased their donations while others had not.

"The possibility exists for higher contributions. Higher oil prices helped some countries and allowed them to contribute more," said Bage.

"We want to enable the rural poor to support themselves. Some of the projects are temporary but we hope that once it is finished the community will be able keep going," he said.

The six Gulf Cooperation Council (GCC) members except Bahrain are founding members of IFAD when it was established in 1977.

A cooperation agreement was signed by the GCC and IFAD in 1989 to jointly pursue shared development goals.

Bage is scheduled to attend the annual meeting of the heads of the Arab Funds Coordination Group, which will bring together the eight most important aid agencies of the Arab world in Kuwait on February 4.