Africa Debate: Will Africa ever benefit from its natural resources?

Posted: November 14, 2012 in Africa, Politics

Whether Africa will ever benefit from its natural resources is a question that is more relevant now than ever, as new discoveries of coal, oil and gas across East Africa look set to transform global energy markets and – people hope – the economies of those countries.

But can the likes of Kenya, Tanzania, Mozambique and Uganda really turn their newfound riches into tangible wealth for ordinary people?

“On average, resource-rich countries have done even more poorly than countries without resources,” according to Joseph Stiglitz, former chief economist at the World Bank and professor of economics at Columbia University, in the United States.

There are greater economic inequalities in resource-rich countries than elsewhere – as perhaps indicated by on-going miners’ strikes in South Africa, considered one of the most unequal countries in the world – and too often there is also endemic corruption.

In Nigeria, the continent’s biggest oil producer, at least $400bn (£250bn) of oil revenue has been stolen or misspent since independence in 1960, according to estimates by former World Bank vice-president for Africa, Oby Ezekwesili. That is 12 times the country’s national budget for 2011. Meanwhile, 90% of people live on less than $2 per day.

There has been violence between Sudan and South Sudan over oil this year, and Malawi and Tanzania have yet to resolve their dispute over who owns the oil and gas in Lake Malawi.

A different story?

Ghana started producing oil in December 2010 and there is further exploration all along the West African coastline. Only five of Africa’s 54 countries are not either producing or looking for oil.

From Algeria to Angola – and from petroleum to platinum, iron ore to oceans – the scramble for Africa’s resources has often caused problems rather than created prosperity.

A diamond cutter in Gaborone, BotswanaBotswana is the world’s largest producer of diamonds and the trade has transformed it into a middle-income nation

Meanwhile, much of the profits from resource exploitation leave the continent entirely in the hands of foreign-owned companies which pay low rates of tax.

Few African countries process their own raw materials – rather, the value is added elsewhere, to the benefit of others.

Foreign-owned resource extraction companies are often criticised for providing little in the way of local employment and contribution to local economies.

But could there be a different story?

Diamond-rich Botswana has been praised as a country doing things right, experiencing relatively stable and transparent economic growth for decades.

It has also managed to retain some of the profits from processing its raw materials – something most African countries have failed to do.

A once poor European country, Norway, also proves it can be done – distributing its oil wealth so equally that it heads the United Nations Human Development Index (Nigeria comes in 156th place).

So why have so many African countries failed to turn natural riches into benefits for the masses? Who is to blame for the foreign exploitation, and whose responsibility is it to put things right? What about possible solutions – renegotiation of contracts, better transparency mechanisms, higher taxation, resource nationalism?

Should the likes of Mozambique and Ghana be celebrating their resource discoveries – and what do they need to do to make the most of them? Will Africa ever benefit from its natural riches?

Join the debate by leaving your comments here.
Source: BBC

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Comments
  1. Reblogged this on bafricabotswana and commented:
    ha ha

  2. I really do not know much about things like this, but common sense and history alone will tell …. , it will take apples from heaven for most of the African countries to ever fully benefit from their own naturally resources.

    It is a combination of many things. Starting with our own culture , fear , politics, our mentality and stupidity , corruption and lack of strong unselfish leadership multiplied by first class greed and above all the mess created and left behind by the colonial era in Africa. FACT!!!!! ( different subjct anyways)

    When talking about simply greed and stupidity , the first country to mind is Nigeria… What a waste of riches!!!

    I have never seen a country so rich. ,filled with the most educated people, likely the most innovative but yet so smart for their own good and benefit that they rob them selves staright to poverty…

    Nigeria has a potential of being a very rich country , but their level of corruption and dis-functionality as far as their oil is concerned is heart breaking. The level of greed and just mind blowing scams in Nigeria lives me speechless.

    If the people of Nigeria spent more time investing in their country and finding more transparent and intelligent ways of profiting from their oils , i bet their country will be one of the richest in Africa if not the whole world .This people are smart and can negotiate their way in to anything and make money.

    Then we have countries that are unfortunately still trying to recover from the colonial era and civil wars , how can we expect them to benefit from their natural resource when there is no order ? Natural resources are great power and envy , and with great power comes great responsibilities…

    This countries have been torn apart by those that once ruled them with bride and for the glory of it. To mention the amount of exploitation and injustice done , will take the sun to rise from the west.

    More cruel is , after all this was done, they left !!! And behind were uneducated people , laws running wild to self fit and the born of civil wars and every man for him self trying to survive… What good can possibly come out of this ?

    I like the comments about Botswana. I also happen to be a very proud Motswana anyways.

    The success of Botswana doesn’t require Einstein and his rocket sciences . Botswana was never a colony but rather a simply British Protectorate which is very different from being a colony.

    Not that we could have not been , Botswana was condemned because of its dry conditions.The passing man didn’t think such a dry desert could possibly be one of today’s number one suppliers of diamonds in the whole world. Could have they known…. we will be in the statistics of poverty and civil wars too.

    I think the colonization of Africa was the biggest crime in mankind. It is not like it was needed.

    Who asked for it? Certainly not us.., but a man who happened to be passing by , with nothing to do but thirst for wealthy ,greed, and recognition. Fact.!

    I personally see no benefit of this era at all , it brought nothing but international conflict, apartheid, death and injustice upon people which the world at large could have done without.

    In my little mind , i find it very hard to think we can ever fully benefit from our own soils. The world we live in is very complicated and dirty .

    What i know for sure though is , Africa does not need a fancy report from some top notch institution and well paid classroom idots . Africa needs its own people , a common man that has seen it and lived through it.

    The African people need to change their ways of thinking and start to express more and to understand that what we do now is for us, by us and for our children and more generations to come. We need to change our attitudes ,we need to stop feeding in to our own pockets and expose corruption where we see it..

    BUT don’t tell because culture has never allowed or taught us to question authority…. we find that as insult…

    mind my english and grammer, ke motswana, ke bua setswana..

    • silvialb44 says:

      Perhaps you will feel that I have no right to reply as I am myself a “colonizer” descendant. However, I felt the compulsion to reply.

      Every single country in this world and in Human History, has been colonized, peoples enslaved, cultures raped and distorted by many influences. The result has been a beautiful homogenety in many different spheres of human culture – from religion to living styles.

      Colonization has been for too long blamed for everything that goes wrong in Africa. Regretfully I strongly believe that until the African continent stop looking for excuses nothing will ever change.

      For how long will we blame corruption, poverty, crime, exploitation, on colonization? Kenya, for example, has been independent since 1963 – half a century ago! Can they still blame the colonization for everything that goes wrong there?

      It is as with anything else in life – until such time we take ownership and accountability, fully, of our actions we fail to learn, we fail to grow, we fail to evolve and become better beings…

      • You don’t really understand the effects of colonialism, do you?

      • HadToSaySomething says:

        Your ignorance is remarkable. England was never a colony. Neither was France, Russia, Denmark, Sweden, and I will stop there. So your arguments fails from the start. Your notion that every nation has dealt with conflict – YES – however, inner conflicts are a thing apart from genocide based slavery and mass murder. Africa was and still is being stripped of people and resources. Unlike in Europe, where your colonizing descendants hail, Africa’s countries are not one African block. Therefore one independent nation may have genuine conflicts with the other simply based on what Country colonized them. That of course destroys any immediate hope of trade and cooperation. ….You offer simple generalsist ideas such as if another country can do it then the same principle should apply for African countries. That is false, the concept of trade relies on the value of a countries currency. That is controlled by the same colonizing nations who while have removed their guns and still maintain a vast amount of economic controll.

        If you need a recent example of how Africa does not work simply refer to the US when it was a bunch of bickering States and not a unified country, It took a Civil War and the death of thousands to get the US into shape. Africa is not at that point. However, if you are going to offer an opinion offer an educated and honest one.

    • Baraka J says:

      real!
      its africa

  3. dg says:

    I’m very glad that I found this post. Thanks veryproudtobe for leading me here. I am an expat working in an African country, in an industry related to oil and gas. The company I work for employs local people, and has invested significantly in those local nationals who show the most promise – I’m talking long-term, game-changing skill development for those people, training being conducted in Europe and N. America. That’s what Africa needs more of. That, and greater emphasis by the host governments on ploughing resource profits into capacity building at the local level.

    The expat companies – which is a misnomer, actually, because in most countries in Africa, as elsewhere in the world, foreign companies are required to register in the host nation or partner with a local company – are profit motivated. Therefore they will do what they are obligated to do. The onus, then, rests on the host government. At the end of the day, Africa is ruled by Africans. YOU have to stand your ground and create the policies that foment local development.

    • KASA says:

      very well put DG. Africa needs to wise up and start making intelligent decisions about our resources and how best to harness that to develop our people. Problem is our politics are choked with politicians of old who have continued to sell our continent to the highest bidder…Slowly I hope we can infiltrate our governments with people who think about modern and selfless ways of bettering the livelihoods of their people. Still a long way to go…

      • dg says:

        You can say that…but I cannot, because I’m a visitor. 😉 For the record, I love working here. There’s no place I’d rather be.

      • KASA says:

        Glad u do because Africa’s a good place to be…Hope u stay much longer DG 🙂 btw I’ll be keeping a close eye on your blog DG…lol..love some of your one liners..Can I ask which African country u are based in?

      • dg says:

        E.G., previously Liberia. Also (very briefly) Mozambique.

      • KASA says:

        Nice! I am ashamed as to admit that I’ve not been to more than two African countries my entire life..Sad but true.Envy u now. 🙂

    • Solomon Appiah says:

      @DG I fully agree with you that the onus rests on African nations and their leaders to stand their ground. A German ambassador told me and a group the same thing saying, if you guys do not stand for your people, we’ll take advantage of you. That is raw international relations. Nevertheless we have to also understand that global trade is not controlled by the global south and in all negotiations, the side with the greater bargaining power has never been African countries. It has been the West who are quick to say …”This is what we are offering…take it or leave it”. The extractive industries take advantage of the bad trade regimes and unevean trade policies to exploit leaving polluted lands in their wake. The solution to such a dilemma is much bigger and complicated than just standing one’s ground. Its a start but the entire world trade regime needs a revolution. As Thomas Pogge and other have alluded to, a simple reform will simply not do. We need a revolution…and its on the way.

  4. Metty Markwei says:

    Reblogged this on The Kente Weaver and commented:
    Good question to ask. More solutions. More ideas need to be generated. #WeCanDoThis.

  5. silvialb44 says:

    Born in Mozambique, living in South Africa… been to many different countries in Africa, but particularly often to Angola and Zimbabwe.

    What a post! I wish that all of us in Africa, actually, or at least in this tip of Africa, we should continue to write and write, and talk and talk, and perhaps one day there will be a great leader that will change it all…

    • Solomon Appiah says:

      Dear silvialb44, about your earlier comment, it is not about having a right to contribute or not. As long as you find yourself on the WWW and in social space, you can contribute but honestly, the statement you made about colonization being blamed for everything does show that you have not taken the time to review any scholarly research about the effects of colonization. Being born in Africa does not mean you have adequately studied or understood the effects of what transpired a mere 50 something years ago. 50 years is not that long ago for the massive trauma caused not to talk of the hellish harm caused to ethnicities which’s effect the continent is still reeling from. If you are honestly interested in constructive analysis or criticism (which i think you are), then please first educate yourself with materials such as the 2011 Yale study accessible here:

      http://www.yale.edu/leitner/resources/papers/scramble_africa_stelios_elias.pdf

      and try to take an objective look at blogs like :

      http://righteousandjustgovernance.wordpress.com/2012/10/30/hopeful-africa/ and http://righteousandjustgovernance.wordpress.com/2012/09/28/appraising-africa-rightly-and-justly/

      After that study if you still stand by your opinion (which is your right) then fine. If these stdies do not interest you, that is also fine but then know that your analysis of the colonization period will always be insensitive and at best faulty. In my opinion (which is also my right), you comment was a bit insensitive and frankly devoid of a solid grasp of history. That is my opinion. I recognize you also have a right to yours. Do have a blessed week.

  6. Solomon Appiah says:

    With regards to Africa’s resources, he is a fair article by Kofi Annan. At lest this is his take on the matter.

  7. Glorious Nkem Bush says:

    I believe dat it can b done. In Nigeria n in most africa countries. But not until the masses rise up wit one accord n put aside there differences. And say no to corruption n corrupt practices. Especially vote out corrupt public office holders. To demand transparency,, accountability from its public office holder n those in position of any form of power.

  8. Glorious Nkem Bush says:

    Neo colonialism is still prevalent in Africa. However it is worrrisome to note that. We are comfortable wit our lot. Hence d non farez attitude to bad governance. A country like china was able to com e out of poverty n as a result of genuine love n determination, n sheer force of will. China never much bothered about wat other countries of d world thought or how they would react wen they closed their borders to foreigners n almost everything foreign. They were determined to do wat is necessary to rise above their state. The government, n the masses. The result of their dexterity, determination n will power to rise above corruption, corrupt government n governance, mediocrity, n refusing to b trampled upon by d so called superpower countries n their babaric idea of civilization. And today they are a better, stronger ,econically vibrant nation though they do not hav half the natural resourses Africa n its countries boast of. What we need is a radical change. What we need is people with vision as leaders, those who are tired of being labelled failures. Those with love for their country. People willing to dies to see that the right thing is done. Neo-colonialism will end when we believe in ourselves n our abilities as a nation. We stop allowing foreigners to dictate how we rule ourselves, when we look deep inside of us n discover that we have wat it takes as a black nation to b the best. When we stop fooling around n see the problem, identify it n deal with it decisively. Africans n Nigeria do not as yet believe there is a problem. When they do ..only then can we begin to find solution.

  9. Maluba says:

    Africa wil never benefit becoz they are oppresed by developd nations in the name of providing jobs for the locals, but pollute the enviroment and get the raw materials to their countries.There is no political will in developing nations.

  10. Ibrahim hussaini kdangi says:

    No we are not benifitin from dis resource endorement dat we have but foriegners especially western are only benifiting from it

  11. Ally Athman says:

    I it’s time for Africa to walkup because every natural resource discovery in Africa we’re not benefits native but we’re benefits European big company. Good example is natural gas discovery southern east of Tanzania where by many people around on that gas source were living in horrible life.Look Tazanaite in Arusha Tanzania also were taken by big companywide. like Victoria has a fish native were not even buy small fish but were exported. So Africa with dream of benefit of natural resources will remain as story.

  12. Africa needs to take charge its destiny. Its high time started telling its own story to the world. African in the diaspora must be encouraged to invest in Africa
    .

  13. Neno nemes says:

    Africa will never benefit from it’s natural resouses, Becouse of the selfishines of our leaders.!

  14. trevor says:

    this what is happening in case of my country follow the link.http://www.youtube.com/watch?v=uamzirLswjk

  15. I really do not know much about most of africas countries products but looking at the issue at hand,whether africa will ever benefit from its natural resources to which i strongly propose that africa has a huge number of advantages that if looked or considered very well qualifies our continent to benefit from its natural resources.Let me not worst much time on highlighting the advintages instead how highlight the solution to making african countries benefit from their natural resources…3years ago we heard rummors of africa be turned into 1 country but with states in short united states of africa.Were is the idea?i mean if africa was to be one and being lead by one president and may be prime ministers i think africa would have benefited much from it natural resources becoz if anything went wrong one man was to blame,unlike a stuation were you 54 countries with 54 presidents and each president wants to make use of natural resources of his country alone.Lets make africa a country with a leader who shall stand for the pride of africa and not selfish leaders like Mugabe who wants all things alone..lets go africa,be one and benefit as one.

  16. bling west says:

    this real,its hapenin here in zambia.

  17. kija charles says:

    I appreciate your standing idea Solomon appiah, actually Africans as whole ranging from leaders to citizens as individuals have to play their role actively to get away the challenges we have. Its not just a matter of throwing the ball to the leaders stil the people have to punish the self centered leaders by voting them away. Unfortunatelly even the leaders who are being trusted wen they get into power they become the biggest betrayers. Who can actually stand for the mass?

  18. Toni says:

    To benefit from these resources, Africa need strong leaders who can stands for the interest and benefit of their people and countries.

  19. From what i know the problems originated from the colonialization done by European nations in which it started with mercantalism.
    Another problem was originated from our leaders after independence who were untrained, so they failed to manage and contol the remaining resources
    Also another problem is that we failed to control our nations through our own interests and willingnes but we copy every thing from them

    • kija charles says:

      Daison samwel I really don’t think if t TRUE that the African leaders are basically untrained, if you trace the history U will actually find that as people are being educated more and more things becoming more worse, look a simple example on the the first presidents of Africa like Mel nyerere(Tanzania), nkwame nkrummah(Ghana), nelson mandela(RSA) and many others were basically not much trained as most of todays leaders!!!!! They were actually patriots for their nations and people, they were not actually greedy as what our leaders are now. According to my narrowed thoughts the leaders today hav to be patriotic wen serving their nations,

  20. African country’s will never benefit from their own natural resouces,Due to unstable of many african leaders,whose benefit for their own.

  21. African country’s will never benefit from their own natural resources,Due to unstable of many african leaders,whose benefit for their own.

  22. thats true we keep on transporting our natura materials such as copper,gold,coal to mantion the few, why why not making our own vehicles and so on.let the nation look into this matter.

  23. patrick says:

    as for zambia we are heading some were though we are still having problems with taxation. we dont have the expertise to nicely monitor this companies who are stealing from us.

  24. Ekomo kibaji says:

    Africa will not ever benefiting from its natural resources if its leaders won’t be comittiment to his people and foreighn investers
    We Africans we should develop self sustainable and self reliance so as to everquit the grants and loans from external that all

  25. Solomon Mwale says:

    It’s a pipe dream…

  26. ABDULMALIK SAIDU SULE says:

    When we have the courage to speak out to voice our views well inspire the rest of MODERATE to speak out and creating,share the benefit of development its will drive us into development and sustainable life.

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