The 2018 Annual Meetings of the African Development Bank Group will be held on May 21-25, 2018 in Busan, Korea. Find out more
Measuring the pulse of Economic Transformation in West Africa
Pietro Toigo is Chief Macroeconomist at the African Natural Resource Center. Before joining the ANRC he served as Chief Macroeconomist in the AfDB’s Governance, Economic and Financial Reforms Department, working on Public Financial Management, private sector development and governance of the extractive sector. Pietro’s experience include six years as Senior Economist in Zimbabwe and Sierra Leone and as Country Representative in Libya for the UK Department of International Development, where he designed and managed a portfolio of programmes covering economic management, public sector reform and management of the extractive sector. Pietro previously worked as Head of the Budget Preparation team in the Coalition Provisional Authority and as adviser to the Minister of Finance during the post-conflict transition of power in Iraq and served in a number of positions in the UK Treasury and in the European Commission, DG Economic and Financial Affairs. He holds an MSc Economics from the London School of Economics.
In previous blog posts, I wrote about the revenues that are likely to materialise from new projects coming online in West Africa; the macroeconomic choices to ensure that these revenues do not have negative macroeconomic impacts and are enjoyed by future generations; and how those revenues can help to bridge the funding gap in health and education.
My previous posts discussed how much revenues West African countries can expect from new discoveries of extractive resources, and what are the choices facing policymakers in utilising these revenues. In this piece, I will try to focus on how these revenues can be used specifically for investments in health, education skills and other tangible development outcomes. What can really been achieved, and how?
My previous blog gave a sense of the estimated likely magnitude and timing for revenues from new natural resources in Ghana, Sierra Leone and Liberia. Figures suggest that over the next 30 years, these new revenues would provide some extra room for spending to governments: over 20% on top of existing revenues in Liberia and Sierra Leone, and around 15% extra for Ghana.
Extractive resources come with a heavy baggage and very high expectations – if history shows that abundance of natural resources does not necessarily improve a country’s citizens lives, announcements of new mineral riches often unleashes expectations of immediate gains for citizens. This is very much the dynamics triggered when, at the peak of the commodity prices cycle, new discoveries in a number of West African countries promised to deliver a game-changing boost to their economies.