By OGJ editors
HOUSTON, Jan. 10 -- Sao Tome and Principe, an island country that shares a joint development zone (JDZ) with Nigeria, has enacted a law governing the receipt, investment, and use of its oil revenues.
The Nigeria-Sao Tome JDZ, established by treaty in 2001, is in the Gulf of Guinea off West Africa (see map, OGJ, Sept. 8, 2003, p. 38).
President Fradique de Menezes said that "nothing will be hidden, nothing will be wasted," regarding oil revenues. Late last month, he signed the law establishing an oil fund to be held by an international bank into which all oil revenue will be deposited. The law limits the amount of withdrawals and restricts expenditures to national development, poverty reduction, and strengthening of good governance.
The fund's activities are to be transparent, with records open to the public. Part of it will be held in permanent reserve to foster development, the law stipulates.
The Earth Institute at Columbia University, New York, assisted Sao Tome and Principe in its year-long effort to develop and enact the law.
Jeffrey D. Sachs, Earth Institute director, said, "All too often, oil resources have been misused. This law, by creating new standards of transparency and accountability, can help Sao Tome and Principe avoid the pitfalls of being an oil exporter and ensure that its potential oil resources are used for sustainable economic development."