- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Can Africa Turn Its Rich Natural Resources Into Wealth?

Posted By Brett Schaefer On November 11, 2008 @ 10:49 am In International | Comments Disabled

African Resource Bank [1]

MOMBASA, Kenya — The sixth African Resource Bank meeting is focused on the important question of why Africa, blessed with rich natural resources, has failed in most of the continent to turn that advantage into wealth and increase living standards for its people. It is an old question, one that has been asked for decades after seeing Nigeria, Angola, Zambia and other countries squander vast wealth gleaned from resources. However, it has gained renewed urgency as the fight over resources becomes a source of conflict.

Dozens of experts and interested parties, nearly all African, have traveled here to attend the conference and discuss ways to address this problem. There is a division between those who would have the government involve itself heavily in natural resource exploitation to increase revenues and those who see government involvement as anathema and an invitation for corruption.

The most fervent supporters of the first point of view, which I am sure will surprise no one, are the members of parliament and other government officials participating in the conference.

My own opinion is closely aligned with the latter view. Essentially, the tendency of African governments to control tightly natural resources and other means for generating wealth serves to concentrate power and wealth in the government and those who control it which facilitates corruption. It also fundamentally weakens the political process.

Worse, with rare exceptions like Botswana’s involvement in the diamond sector, government control of resources tends to degrade their value over time because governments fail to exploit them in the most expert manner or fail to make investments necessary to maintain peak efficiency and withstand market downturns. The decline of Zambia’s copper sector is a case in point.

Tying wealth generation to the government increases the rewards and costs of winning elections. Losing the election is more than a political defeat; it deprives the loser of the means for enriching himself, his family, his tribe and his allies through jobs, patronage or corruption. This situation helps explain why electoral loss can devolve to violence.

Indeed, the recent electoral violence in Kenya was driven in part by a perception from excluded ethnic groups that it was their turn to enjoy the “national cake.”

In other cases, long-standing mismanagement of resources or government corruption has spurred violence and conflict in places like the Niger Delta, Chad, the Central African Republic and the Congo between those in power and those who feel they are being unfairly denied their share of the benefits or simply wish to seize control of the resources for their own benefit.

While it would not resolve all issues, including the perception that foreign investors do not give enough back to the people when they make a profit, lessening involvement of the state in the economy would decrease the costs of political loss and, thereby, increase the likelihood of a civil transition of power.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/11/11/can-africa-turn-its-rich-natural-resources-into-wealth/

URLs in this post:

[1] Image: http://www.foundry.org/tag/african-resource-bank/

Copyright © 2011 The Heritage Foundation. All rights reserved.