Transparency and accountability must be at the heart of natural resource policies, Kofi Annan tells Statoil


Mr. Annan’s Remarks at the 2014 Statoil Annual Conference

“Business Leaders and Africa’s Agenda for Sustainable Development.”


Distinguished guests, ladies and gentlemen

Thank you for your warm welcome.

Norway has long been a friend, both as a staunch supporter of the values and principles of the United Nations, and as a partner in several initiatives of my Foundation.

So I am grateful for this opportunity to exchange views on the progress and prospects for our global community, particularly in Africa.

These are exciting times for the continent, the most exciting, perhaps, for half a century.

I remember vividly the optimism with which African countries gained independence; and the hope that came with the chance to forge their own futures for the first time.

As we know, in too many countries, and for a variety of reasons, these hopes were unfulfilled.

But, once again we have the opportunity to build a better life for all of Africa’s citizens.

Ladies and gentlemen, in our fluid and interconnected world, we face complex challenges and incredible opportunities.

For many across the world, including in Africa, there has never been a better time to live.

We enjoy greater prosperity and can expect to live longer and healthier than previous generations.

But inequality, between countries and within societies, has rarely been greater.

Violence and instability, poverty and illness continue to cast a dark shadow over the lives of many.

In a world where food is plentiful, more than one in nine people will go to bed hungry tonight.

And the Ebola outbreak which is devastating some West African countries reminds us that progress is fragile.

These challenges transcend borders; no government, no country, no matter how successful or wealthy, can hope to tackle them alone.

These challenges will only be met through increased cooperation between nations, and across every sector of society.

Your invitation to me reveals an understanding that business, particularly the energy sector, can be a crucial partner in this endeavor.

The private sector has a major influence over people’s lives and the wellbeing of local communities.

With this influence comes the responsibility to look beyond the bottom line; to look beyond economic growth to see how this growth is shared.

To consider what you can to do to improve access to food and clean water, to sanitation, healthcare and education, as well as raising income levels.

With your reach, resources and expertise, you can help tackle global challenges while improving the lives of millions.

And by building local capacity and markets, you can expand your consumer base and create new demand for goods or services.

I know you appreciate why this is in your interest; after all, business cannot succeed in societies which fail.

And Africa needs partners with a long-term vision who understand their responsibility to invest in communities, as well to as increase profits.

As I am sure you are aware, Africa’s economic performance in recent years has been impressive.

While growth rates across the world have been low, sub-Saharan economies have enjoyed an average annual growth rate of five per cent.

The confidence of an expanding middle class and the dynamism of Africa’s youth combine to drive private sector growth and entrepreneurship.

Across the continent, citizens are becoming more engaged, and more demanding of their leaders and governing institutions

Civil society is becoming stronger, informing debate, widening participation and helping set the agenda.

Yet serious challenges remain.

Despite significant progress towards achieving the Millennium Development Goals, millions of Africans remain trapped by disease, hunger, and insecurity.

Africa remains the only continent which fails to produce enough food to feed its own people; today, almost a quarter of the population of sub-Saharan Africa is undernourished.

While governance is improving in many countries, recent unrest and political transition in Burkina Faso demonstrates the need to further embed democratic principles.

Despite impressive growth, unemployment remains unacceptably high, especially amongst young people.

Africa’s wealth of natural resources reveals the continent to be richer than was perhaps ever envisioned.

Revenue from these resources is driving growth, and with the right policies, and effective management, could deliver transformative results for human development.

Unfortunately, this growth has not brought comparable improvements in health, education or nutrition for the general population, and yet their welfare should be at the center of government programmes.

The question of how best to manage Africa’s natural resources was the focus of two recent reports by the Africa Progress Panel, which I am privileged to chair.

‘Equity in Extractives: Stewarding Africa’s natural resources for all’ proposed a series of recommendations for African governments, the private sector, and the international community, to ensure that Africa is the prime beneficiary of its own resources.

The report argued that African governments had failed to secure fair deals for their citizens, and that transparency and accountability- the twin pillars of good governance- must be at the heart of natural resource policies.

Both are crucial to building trust between governments and citizens, and facilitate discussion on how to best manage a country’s natural wealth.

Thankfully, as more stakeholders appreciate the benefits of openness, transparency is increasing across the sector, amongst governments and business.

In Tanzania for example, the government has taken the commendable decision to disclose the real, beneficial, owners of oil and gas and mining companies.

The Democratic Republic of the Congo is seeking to improve the management of its national oil company by publishing figures of oil sales and revenues.

And twenty-four countries across Sub-Saharan Africa are now implementing the rigorous standards set by the Extractive Industry Transparency Initiative.

This is the type of political leadership necessary to strengthen revenue collection and build trust in oil, gas and mining industries.

There is of course, a crucial role for the private sector, and energy companies with the reach and influence of Statoil.

Business must follow best practices on transparency and accountability in order to build ties with local communities and ensure the sustainability of operations.

Concerted efforts must be made to overcome tax avoidance and trade mispricing, which carry an annual loss to Africa of roughly 38.4 billion dollars.

Extensive use of tax havens, shell companies, and multi-layered corporate structures create an impenetrable barrier of secrecy.

Such efforts to minimize tax liability are reprehensible, and particularly detrimental to Africa, where authorities struggle to maintain tax bases.

We therefore need business to take a leading role in developing a multilateral tax regime which shuts down unethical tax avoidance and evasion.

Business must also merge economic and sustainable development agendas with steps that are morally right and commercially sensible, such as the development of renewable energy sources and the adoption of low carbon technology.

The expertise and resources of the energy sector are particularly needed in the fight against climate change, which poses an all-encompassing threat to the health and stability of our planet.

Africa, despite accounting for just three percent of global greenhouse gas emissions, is pays the highest price of our changing climate.

Power generation is a major driver of climate change, but also a vital catalyst for economic growth, job creation, and poverty reduction.

We must be realistic therefore and accept that Africa’s future growth will be driven by a mix of both renewable and traditional energy options.

Norway of course, can provide many examples of how to best balance short-term necessity with long-term vision.

Here, revenue from offshore oil deposits is used to promote and support the development of renewable energy sources.

By 2020, you aim to reduce emissions of greenhouses gases by 30 percent and to increase the renewable share of total energy consumption to almost seventy percent.

Your progress in recent decades in driving innovation and transitioning towards a green economy is an example for countries around the world.

And I am delighted that Norwegian businesses have enthusiastically accepted their responsibility to develop more sustainable operations and to share expertise.

Just last month, Norwegian and African leaders from business, politics, and civil society met in Oslo for the fourth Norwegian-African Business Summit.

Such fora are crucial, and strengthen the partnerships that drive Africa’s development.

I look forward to hearing more about those discussions, and to a further exchange of ideas on the role of business across the continent.

Ladies and gentlemen, in closing allow me to share my conviction that healthy and sustainable societies are built on three interconnected pillars; peace and security, inclusive development, and rule of law and respect for human rights.

There can be no peace and security without development. There can be no long-term development without peace and security.

And neither are possible without respect for human rights and the rule of law.