King Mswati III of Swaziland has done a deal with the President of Equatorial Guinea to import crude oil into his kingdom.
The oil will be refined into consumer products such as petrol, kerosene, asphalt and chemical reagents.
But, Swaziland has no oil refineries and no history of any heavy industrial development. So, the crude oil will be transported from Swaziland to South Africa where it will be refined and the processed products will be sent back to Swaziland.
The Times of Swaziland, the kingdom’s only independent newspaper, today (12 January 2012) reports that the King has been entertaining the President of Equatorial Guinea Obiang Nguema Mbasogo in Swaziland this week. He has been trying to impress upon the President that his kingdom is a place worth investing in.
Thembinkosi Mamba, Principal Secretary in the Ministry of Natural Resources and Energy, told the newspaper the Swazi Government had plans to build its own refinery so that, in future, the crude oil would be brought directly to Swaziland for refinement and separation, thereby, cutting down on costs.
According to the Times the oil deal is ‘separate from all the other bilateral agreements which will be signed this afternoon’.
Although the Times doesn’t say this, it looks like this deal is something special the King has dreamt up. In the past, as with the notorious US$5 billion power plant deal that turned out to be a con-trick, the King has bypassed his parliament and made deals on his own imitative.
Clearly, Swaziland has no need to import the crude oil and doesn’t have the capacity – nor can it develop the capacity in the foreseeable future – to process the oil once it receives it. Considering the dire state of the economy, Mamba’s claim that Swaziland will be able to build its own refinery is a fantasy.
The deal is pointless - why doesn’t Equatorial Guinea just send the crude oil to South Africa for refinement, bypassing Swaziland altogether?
The deal is also too costly. Mamba told the Times, ‘There are costs involved in the acquisition of the oil, like the cost of transporting it to South Africa where it will be refined, and the charges that we will have to pay for refining it in that country.’
Looks like King Mswati is about to enter a bad deal that will cost his subjects a great deal of money, rather than save them some.
So what’s going on? Obiang’s regime has been labelled one of the world’s most corrupt by international rights groups. Transparency International has ranked Equatorial Guinea 168th out of 178 countries for its efforts in tackling corruption.
Only last month (December 2011), the UK International Development Secretary Andrew Mitchell told his parliament that oil wealth was being stolen from Equatorial Guinea ‘for the corrupt and personal use of an unaccountable and self-serving elite’.
The US Justice Department said in October 2011 it was looking to seize assets worth more than US$70 million from Obiang’s son, Teodoro Nguema Obiang Mangue, including a US$30 million home in Malibu.
In September 2011 the president’s son visited Swaziland. While he stayed at the five-star Royal Villas Resort (where the president has been staying this week) he had his bag stolen – containing US$2.5 million in bank notes. We still don’t know why he came to Swaziland with so much cash in his case, but it is hard to believe it was for legitimate reasons.
Now, three months later his father is in town and a needless oil deal is signed with the King.
$5bn SWAZI POWER PLANT WAS A CON