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

 
A file photo taken on April 14, 2009 shows a worker inspecting facilities on an upstream oil drilling platform at the Total oil platform at Amenem, 35 kilometres away from Port Harcourt, Nigeria.

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?

This month the BBC Africa Debate team will be in Ethiopia asking just that. Politicians, business representatives, activists and academics from across the continent will be taking part, as over 800 experts gather in Addis Ababa for the Eighth African Development Forum.

Start Quote

On average, resource-rich countries have done even more poorly than countries without resources”

End Quote Joseph Stiglitz

"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, Botswana Botswana 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. You can also take part on Twitter - using #bbcafricadebate and #resourceafrica - or via BBC Africa's pages on Facebook or Google+

Tune in to the BBC World Service at 1900 GMT on Friday 26 October to listen to the Africa Debate broadcast from Addis Ababa, Ethiopia.

 

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    Comment number 47.

    Indeed, African countries can benefit from their God's given wealth if their leaders can muster the political will to better the lots of their fellow countrymen.
    The greatest problem with these oil producing countries lies on their leaders and not in the hands of the foreign countries.Corruption and poor implementation of enabling laws had made the foreign firms to get away with it.

  • rate this
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    Comment number 46.

    For a President to have a stable government in Africa, he needs to allow the West to exploit the resources of his land. If he refuse, he will be sent to the Hague like Gbagbo, murdered like Khadafi or died of heart attack like the president of Malawi. A recent report by a French minister said that the PanAfricanism is a treat to Europe. As it stands Africa will never benefit from its resource

  • rate this
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    Comment number 45.

    Agree with all the stated past & current chronic socio-political & economic illnesses in most African nations. My view is that they all stem from the absence of a solid 100% implemented & guarded modern day constitution. It covers transparency, press, education, human rights, government & military roles, women's, minority & citizens' fundamental rights, land & other property rights.etc. Thanks

  • rate this
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    Comment number 44.

    Oh what about the Ethiopian gold mine that is being used as personal property of one tycoon who does not even erect meaningful local structures in the form of schools and hospitals, if not polluting waters and killing peasant cattle? What about the national bank that kept fake metals for years while the gold had been sold out privately long ago?

  • rate this
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    Comment number 43.

    the main problem in Africa is corruption Our resources are being sold for a song by our leaders to europe and the chinese whatever is produced by government companies lines the pockets of politicians and is stashed in banks in europe you end up thinking that pre-independence was better though we had few schools in zimbabwe they were better funded we
    also had water and electricity

 

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