Good governance needed to turn Africa’s mineral endowments into engine of broad-based growth, ECA Policy Paper says
By Yinka Adeyemi, ECA, 06 December 2004

Good governance is a necessary pre-requisite for turning Africa?s huge mineral endowments into a blessing that can promote broad-based growth and poverty reduction, according to a forthcoming Policy Paper issued by the Economic Commission for Africa ECA.

The paper, "Mainstreaming Mineral Wealth in Growth and Poverty Reduction Strategies” was written by Antonio Pedro, Senior Economic Affairs Officer, at ECA’s Sustainable Development Division.

The paper examines the claim that mineral resources impact negatively on economic growth in developing countries and concludes that mineral endowments do not guarantee growth or increased per capita income.

There is a need to shift from resource extraction to resources management, says the paper. “This is not easy to achieve, for there is no easy panacea or universal recipe. The resource curse is a force that cannot be ignored,” the paper declares.

It calls on governments to play a proactive role in “unbundling” the mining industry to increase local beneficiation, value addition, local procurement and outsourcing of goods and services which could help diversification, create more employment and value-added rents and wealth.

The paper says African governments can achieve “sustainability of mining” if wealth derived from minerals is invested “during the currency of mining” on human and social capital creation and partly, on an income-generating portfolio of financial assets that yields higher returns than mining.

To download electronic copy, please click here. To request a hardcopy, send an email to yadayemi@uneca.org