'Curse of oil' sees corruption soar in Nigeria

A leading candidate in Nigeria's upcoming presidential elections has attacked the country's foreign-dominated oil industry for fuelling corruption in the country.

"Corruption has been worse with oil because oil has brought more money," said the former Nigerian military strongman General Muhammadu Buhari, who is running a presidential campaign based on an anti-corruption platform.

"Now corruption has eaten away at our industries and society generally."

The landmark elections in April are expected to consolidate a fragile democracy in sub-Saharan Africa's largest oil exporter after the Senate defeated an attempt last year by the current President, Olusegun Obasanjo, to extend his term in office.

"Oil has been a disappointment," General Buhari said. "Infrastructure has been allowed to rot away since [it was] found. Obasanjo has done the same thing... the President ignores it."

President Obasanjo has been feted by the British Government for his perceived fight against corruption, which has claimed several high-profile scalps, including a former chief of police, a government minister and a state governor. But critics say corruption inquiries have only been used to indict political enemies.

With Mr Obasanjo due to retire to his chicken farm in May, the election will represent the first full democratic transition of presidential power in the country's history - and boost hopes for meaningful development. General Buhari said: "We are looking forward to free and fair elections - if things get worse than they are, the population won't stand it."

Africa's most populous state pumps some 2.4 million barrels a day of crude and is already a key supplier of oil to the United States, which imports 17 per cent of its petroleum from west Africa - due to rise to 25 per cent by 2015. But despite the potential of oil to change the lives of ordinary people, most Nigerians continue to subsist on less than US$1 (51p) a day.

Successive military dictatorships have been accused by Nigeria's anti- corruption commission of embezzling $400bn in oil windfalls .

According to the Berlin-based anti-corruption watchdog Transparency International, Nigeria is one of the most corrupt countries in the world - where graft is seen as "rampant".

Against the backdrop of endemic corruption, Nigeria is sitting on the brink of a west African oil boom that will see billions of pounds flow into government coffers - and could see the situation becoming even worse. "Oil tends to supercharge corruption," said Nicholas Shaxson, a fellow of Chatham House think-tank and author of the forthcoming book Poisoned Wells: The Dirty Politics of Africa's Oil. "Governments don't tax their citizens, so there's no accountability - it's part of the 'oil curse'."

An estimated $200bn in revenues will go to African treasuries in the next 10 years as new oilfields open throughout west Africa's Gulf of Guinea seaboard - including Nigeria, Angola and Equatorial Guinea. Oil will bring the largest influx of revenue in the continent's history, and more than 10 times the amount Western donors give each year in aid. British companies - which some campaigners accuse of complicity in government corruption - are heavily involved in the oil bonanza.

"The companies are guilty of a lack of engagement with reformers," said Gavin Hayman, an Africa oil analyst at the London-based NGO Global Witness. "They were obscuring oil revenue [figures] in the past, creating a predatory environment which has led to problems down the line. Revenues are [now] going up, so there will be more opportunities for corruption."

The oil giant Shell produces over one million barrels per day in Nigeria - much of it from the troubled Delta region in the south.

Since January last year a group calling itself the Movement for the Emancipation of the Niger Delta (Mend) has launched guerrilla attacks on oil installations around the area's maze of swamps, forcing companies to scale back production. Mend alleges that both the government and the oil companies have defrauded them out of oil royalties which has left their homeland perilously underdeveloped. General Buhari said: "The unrest in the Delta started from incompetence - if the revenue was used for good schools and potable water, the youths would not be there."

Oil companies deny the charge, pointing to millions of pounds of social investments. But there are fears that the April elections could be a flashpoint for violence in the Delta, where elected office comes with a hefty slice of the petrodollar pie. Given such high stakes, many expect politicians to arm supporters to gain sway at the polls.