The 2019 Annual Meetings of the African Development Bank Group will be held from 11-14 June 2019, in Malabo, Republic of Equatorial Guinea. Find out more
Political leaders, finance experts have expressed the need to give priority to Africa’s premier resource, its people through good governance and the use of proceeds from natural resources to train and build capacity for sustainable development.
The African Development Bank (AfDB), holding its Annual Meetings in Marrakech from 27-31 May, devoted the 28th of May to two seminars on natural resources, agriculture, mining and energy production and human development, as well as the use of income they generate. The discussions were organized around the theme: “Africa's natural resources, what is the agenda?” and “Maximizing Gains from Natural Resources .”
In his remarks at the opening of the high level-level seminar, Rwanda’s President, Paul Kagamé, said “we must refuse the notion of the so-called resources curse,” stressing that role of the State and governments is to set up an agenda, adapted to each country’s situation. “Management and resources exploitation on the continent should be in the interest of Africa and its citizens “he said.
The natural resources question remains complex. Africa has recorded very high growth thanks to the high prices fetched by agriculture and mining of raw materials. This growth however, has not benefitted the people as expected especially with regards to income and employment creation.
“Almost everywhere in Africa, we witness the discovery and exploitation of vast quantities of natural resources. These are basic and precious metals, oil and gas,” AfDB President, Donald Kaberuka, said during session.
The natural resource boom will generate the means to support Africa’s infrastructure development such as the construction of railway lines and sea ports. But this would require the design of economic models for the mining sector, natural resources governance.
Several strategies have already been adopted by African governments that have resulted in increased revenue. The establishment of sovereign funds in Gabon and in Nigeria, investments in major infrastructure projects and the setting up funds for future generations, are part of the emerging strategy.
Jeffrey Herbst, lecturer at Oxford University says Africa should take advantage of the current situation as prices of natural resources and in particular, mining and agricultural resources could fall again depending on the economic situation.
“There is no such thing as governance of natural resources. There is good governance. African countries should have to develop strategies, think about future generations and engage national debates. This is not something that others can do for them. They are highly political questions,” he added, emphasizing the need for investments in infrastructure and education.
Sheila Khama, Director of extractive resources at the African Center for Economic Transformation, (ACET) and member of the Africa Progress Panel, felt that Africa should regain control of the exploitation and extraction of its resources and not to allow investors dictate the terms and conditions.
For Africa, “there is a great window of opportunity to capitalize on our resources,” she said, urging the civil society, decision-makers and the academia in Africa to work in concert on this issue.
For most of the experts who participated in the discussions, Africa is in dire need of human resources able to engineer the natural resources boom for the good of the countries in particular, and African economies in general. In this respect, Africa lacks the expertise required to evaluate mining resources and legal experts to negotiate contracts with multi-nationals in the sector.
The control of revenue accruing from mining operations is an ordeal for most tax authorities and speculation on concessions is for the most part unreported to African States.
In its annual report published on 29th of May in Marrakech, the AfDB is of the opinion that « agriculture, mining and energy resources have the potential to boost the continent’s economic growth and thus speed up human development.”
“The African Development Bank and sister institutions in Addis-Abeba are presently preparing analyses of the various scenarios for submission tor our leaders during their next summit to be held at the beginning of the new year,” Mr. Kaberuka said.
“The primary sector requires sound land management, balanced and effective tax systems and the right mechanisms and incentives to cause an acceleration and diversification of the sources of growth”, the report stated.
In other words, for most experts, wealth accruing from natural resources and their exploitation should be invested in education, infrastructure, and transformation industries in order to guarantee improved living conditions for future generations.