Natural Resource Management: Africa’s unspoken phenomenon
The Resource Curse: Part 2
Can better natural resource management bring about effective change in developing countries?
At present, an estimated $1 trillion every year is lost in illicit financial outflows from developing countries. Imagine how much change this could do for the poor communities if effective systems are put into place to curb corruption and strengthen fairer international trades and exports! Currently, Africa holds almost 15% of the world’s population but its overall contribution to the world’s GDP is only 3%, according to World Bank reports. The United Nations Human Development Indicators, incorporating health, education and living standards, show rock-bottom scores for most African countries, yet the value of Africa’s natural resource exports in 2010 was 333 billion, nearly 7 times the value of international aid the continent received that year.
One-third of the world’s poorest people still live in resource-rich countries. Better management of the resources will not only bring about more wealth, but it will also greatly contribute to stability in the region. Currently, the gas, mining and oil sectors represent one of the largest sources of revenues for resource-rich countries in Africa. The correlation between economic growth and natural resource revenue is, all things constant, positive. Increase in the flow of revenue from resource extraction will also see an increase in GDP. However, most developing countries find it difficult to enjoy this benefit for long as parts of the revenues are paid off in foreign debt. This pattern is often difficult to break out of and only lead to developing countries sourcing out even more aid from richer countries. On the flip side of the coin, developing countries will probably be better off if richer countries paid off all the ecological debt owed the continent for the exploitation of its resources.
Why Monitoring and Evaluation is important for natural resource management
Effectively managing natural resources is a two way street that requires the active participation of both citizens and government. There must be key milestones to measure progress on efficient use of resources to ensure that the benefits are decentralized in all parts of the country. A measurable and effective monitoring and evaluation system in every aspect of the government’s expenditure and constant revision and improvement overtime will gradually put a country on the path to attain full equilibrium of all natural and human resources. M&E processes in such countries as South Africa has shown immense improvement in decentralizing natural resource benefits in both rural and urban settlements. Many governments in Africa are now slowly moving away from quick impact development phases to a much more sustainable infrastructure platform. Much spotlight is now on using revenues from resource exports for rural development. This will mean strongly monitoring and evaluating how the local governments or municipalities use these funds for sustainable projects. Better roads, bridges, and rejuvenation of power supplies in rural areas will directly lead to investment and development being decentralized, thus enabling rural or urban dwellers to enjoy a harmonized benefit. A government who has the vision for an effective M&E system must firstly seek to reform programs that are at the very root of the economic problems.
Sources: Worldbank, One.org, IFAD, ISSA, African economic outlook