Recipes for Overturning Africa’s Resource Curse to Blessing

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The African agenda on governing and harnessing natural resources for development would have been unthinkable 10 years ago when many considered natural resources as curse, says Ethiopia’s Mines Minister, Sinkinesh Ejgu.

“Now, because of many interventions, we have reached the stage where we can use these non-renewable resources,” the Minister said on Tuesday during a roundtable discussion at the ongoing Eighth African Development Forum (AFD VIII) in Addis Ababa.

Ms. Ejgu echoed a point made by Prime Minister Hailemariam Desalegne earlier in a keynote address that the “resource curse” thinking had to be dropped in favour of “resource blessed.”

“In this meeting, we should declare something which will create a new image for Africa,” added Supachai Panitchpakdi, Secretary General of the United Nations Conference on Trade and Development (UNCTAD): “That Africa is not a resource-dependent, but resource-rich continent. We must dispel the resource curse thing, and change it to a continent with a resource blessing,” he emphasized.

Mr. Panitchpakdi noted that the latest Global Competitiveness Index was not dominated by resource-rich countries.

“There is no relation between the resources that you have and your competitiveness,” he said. “It all depends on the policies that you have.”

The roundtable, which discussed kinds of investment, the creation and distribution of wealth, intergenerational equity, and the commodities super cycle the world is in now, emphasized the significance of policies in African endeavours to enable the continent to benefit from its natural resources.

The commodities super cycle, which, according to Claire Short, former U.K. Development Secretary and Chair of the Extractive Industry Transparency Initiative (EITI), was largely caused by the high mineral demands from China and India, which had a massive opportunity to improve the livelihood of Africans.

“These resources are great wealth, but difficult to manage,” she said, stressing that more needed to be done to ensure that they would bring about more sustainable development.

Part of the problem, she said, was that contracts were signed in advance in the mining sector, forcing some countries which were eager to attract investors in the sector to settle for deals that were not beneficial to their economies.

Africa needs explicit policies that are consciously driven by the government, not just left to the market, Mr. Panitchpakdi added.

“This includes backward linkages that have to be implemented by the government,” he said.

Angola, which has exercised remarkable discipline in the use of resources from its trade relationship with China, its biggest partner in that respect; and Nigeria, which has introduced a Stability Fund to make sure that future generations benefited from its natural resource wealth, were some examples the UNCTAD Secretary General cited as good policy implementation.

Furthermore, Ms. Ejgu told the roundtable that Ethiopia had chosen to partner with artisanal miners to develop its mineral sector.

“Everybody had labelled them as criminal because they worked for their livelihoods,” she said. “We have partnered with them, and we have seen that we are right.”

Ethiopia also has a conducive environment for private investors, as long as they are development-oriented and exercise corporate social responsibility, she said.