The foreign minister of Sao Tome and Principe has resigned after coming under widespread criticism for spending nearly US $500,000 of aid from Morocco without reference to other members of the government. Meanwhile, a group of disgruntled police officers firing guns in the air has seized the main police station in the capital to protest at unpaid salaries and poor working conditions, according to the Portuguese news agency Lusa.

The Attorney General’s Office of Sao Tome and Principe says it has found “serious flaws” in the way that contracts were awarded to oil companies to explore offshore waters shared with Nigeria. It said in a report published on December 9 that several of the companies chosen six months ago to explore the Joint Development Zone (JDZ) shared by Sao Tome and Nigeria lacked the technical know-how and the financial muscle necessary to carry out the work.

Take profits from billions of barrels of offshore oil, divide them among a population of just 150,000, and this dirt-poor archipelago of flimsy wooden shacks could be transformed into one of the world's affluent petro-states. Factor in the potential for war, conflict or corruption - painful realities in many oil-rich African nations - and the dream of development can quickly become a nightmare, reports Associated Press.

Arlindo Carvalho has resigned as Minister of Natural Resources of the tiny island state of Sao Tome and Principe amid allegations of irregular procedure and high-level corruption in the award of offshore oil exploration rights. This row is continuing to delay the award of fresh acreage in offshore waters shared with Nigeria.

The Nigerian Senate this week declared the $45million loan granted to Ghana and Sao Tome by President Obasanjo as illegal, noting that the money was taken out of public funds without satisfying the requirements of the 1999 constitution. Obasanjo was also found to be in breach of the due process necessary in such transactions.