Natural Resource Governance
-Africa’s unspoken phenomenon

(Part 1)

Africa, the continent best known for its riches in natural resources, continues to rank as the poorest continent in the World in terms of livelihood of its citizens. Infrastructure, economies, and human development are still at rock bottom in most part of the continent. Much of the rich-filled continent today struggle with systems that will enable optimal management of the region’s natural wealth, and have yet to reach the peak in determining the most effective way to use its resource exploitation to the advantage of its citizenry. For example, the GDP per capital in oil-rich Equatorial Guinea is $27,000, but yet 75% of the population still lives on less than $2 a day.

Some theories from schools of thoughts ascribe this strange phenomenon to years of mismanagement of resources, corruption and failed leaderships, while others point accusingly at the West for being too influential in Africa’s affairs, thus causing its underlying problems. Current trends however in recent times show promising economic growth a projection for Africa in coming years and there is much optimism that the continent will see a positive jump in economic viability. The continent’s economic outlook for 2013 and 2014 is promising, confirming its healthy resilience to internal and external shocks and its role as a growth pole in an ailing global economy. Africa’s economy is projected to grow by 4.8% in 2013 and accelerate further to 5.3% in 2014 (source: Africa economic outlook). However, if effective systems are not put in place to manage this growth, and measures instilled to ensure the livelihood of its citizenry is improved, this change will have minimal impact for Africans.

The developing world has made some strive in tackling poverty and has already attained the first Millennium Development Goal (MDG) target of halving the 1990 poverty rate by 2015. The 1990 extreme poverty rate—$1.25 a day (in 2005 prices)—was halved in 2010, according to the new provisional estimates by World Bank. The proportion of people in the developing world living on less than $1.25 a day was 20.6 percent in 2010, down from 43.1 percent in 1990 and 52.2 percent in 1981. That is, 1.22 billion people lived on less than $1.25 a day in 2010, compared with 1.91 billion in 1990, and 1.94 billion in 1981. Notwithstanding this achievement, even if the current rate of progress is to be maintained, about 1 billion people will still live in extreme poverty in 2015. The international line of $1.25 a day is the average of the national poverty lines in the poorest 10-20 countries. (source: Africa economic outlook)

In recent times much pressure have been put on African governments to develop better governing systems and stronger models to manage natural resources and improve human development. Despite some countries in Africa who are suffering from the “resource curse”, there are still others who have managed to put into place effective governing systems. Botswana, Ghana, Kenya, Morocco, and South Africa are a few of several countries that have relatively high standards of living that other countries could well model. Even though the continent does not contain an evenly spread of gold and diamond resources, with some nations having more or less (such as oil in Nigeria but desert in Chad), categorically speaking, the continent would be far well off today than it is if more and more of the countries were feeding of the examples of the few successful ones, and developing these models for good governance. This means governments’ prioritizing citizens and the private sector as active partners in managing resources, developing infrastructure, and curtailing corruption. The less suspicious citizens are of their governments, the less the likelihood of conflicts. As Dr. Mo Ibrahim puts it, “The effectiveness of government will invariably be measured by its ability to create economic opportunity from natural wealth and making citizens a part of the process. Effective government should be about and for the people – all the people.” Most Africans want clearer policies, transparent processes and the need to feel a part of the decision making processes. This includes honestly knowing how their resources are being managed and how the benefits will better their lives. Clearer communications between people and government is also a great foundation to active democratic participation and collective decentralized management of state resources. Many African countries will also strive for nationalism, and Africanism, but unless a stable, transparent, and democratic political environment is created, and honest investment opportunities, jobs, trainings, better health care and education are prioritized, Africa will continue to see much of capital flight and uneven distribution of wealth. The average score of an African country on the 2012 Mo Ibrahim index of Good Governance is 50.3%, which is relatively low, with Mauritius scoring the highest 83.8% and Somalia the least with only 7.2%.This puts much pressure on both government and people to work hand in hand to ensure that the continent remains on the trajectory to improvement. A stronger government will well equal a better economy, and more transparent judicial systems will play a very key role in reducing corruption even further. Africa may learn a couple of useful strategies from the West in harnessing the judicial process to create legally binding resource management regulations. In July 2010, the United States passed the Dodd-Frank Financial Reform Act which includes as one of its provisions (the Cardin-Lugar Amendment) a requirement that all US-listed oil, gas and mining companies publish their payments to foreign governments on a project- and country-specific basis. In October 2011, the European Commission (EC) published a similar legislative proposal that included the forestry sector. If passed, this legislation could unlock millions of dollars in domestic resources for development in resource-rich countries. (source: one.org)

In order to protect the natural resources for generations to come and to ensure that no single person selfishly benefits from a public good, strong judicial reforms and very transparent governing systems that respect civic participation and the rule of law must be introduced.

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