Ethiopia’s Prime Minister Says Natural Resources Can Catalyze Africa’s Development

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Mineral resources are a catalyst for development in sub-Saharan Africa, whose share of global gross domestic product is a minuscule two per cent, Ethiopia’s new Prime Minister, Hailemariam Desalegn, said Tuesday.

In a keynote speech at the ongoing African Development Forum in Addis Ababa, Prime Minister Hailemariam said that a situation where bountiful resources exist side-by-side with abject poverty was unacceptable, noting that the argument that natural resources cannot lead to development was untenable.

“We have to reverse irrevocably the idea that resources are curse.”

After all, he added, resource-rich countries such as Norway and resource-poor countries such as Korea have both achieved development.

He argued that the idea behind the resource curse was a fundamental misdiagnosis of Africa’s problem, which was like arguing that rich people’s children could never be good.

“Resources are as valuable and beneficial to our economies as we make them to be,” he said.

The Prime Minister cited exploitation as one of the problems that have prevented Africa from benefiting from the sector for economic development and transformation, noting that the continent’s exploitation has not improved much from the way it happened during colonial times.

“There is seldom any value added to natural resources,” Mr. Hailemariam said, “and few linkages to other sectors of our economies.”

This scenario has not only lowered earnings from the sector, but “we are missing out on possibilities for the growth of our economies.”

Among absurdities in Africa’s mineral resources exploitation, Hailemariam said, were that Antwerp is the world’s leading diamond-cutting centre, although the diamonds come from Africa. He also noted that some African countries export crude oil and import refined oil.

He cited Botswana, which has built a middle-income economy using its diamond resources, as an example for other African countries to emulate.

Mr. Hailemariam said that sub-Saharan African countries need to adopt a transparent, ethical and long-term perspective to exploit their mineral resources. They also need to encourage public-private partnerships, ensure that resources are exploited sustainably, and that agriculture and rural communities were not relegated to the periphery of Africa’s plans.

He said that Ethiopia was investing proceeds from its natural resources in modernizing and leveraging its agriculture value chain by linking it with the food and beverage industries. Despite challenges yet to be overcome, he added, Ethiopia has generated US $500 million from the mining sector in the current fiscal year.

He expressed hope that the deliberations of the AFD VIII would suggest how the knowledge gap could be filled and come up with innovative ideas for better livelihood.

Mr. Hailemariam paid tribute to his predecessor, Prime Minister Meles Zenawi, who passed away in August, for laying the foundation for Ethiopia’s growth and transformation. Participants at the forum also observed a minute of silence for the late Prime Minister, who was known to have participated in all previous AFD forums.