How Can African Countries Benefit from their Natural Resources in Order to Develop and Modernize Themselves in a Context of Globalization and Financial Crisis?
Abstract:The abundance of natural capital, especially of non-renewable resources, is an opportunity for Africa's development. However, recent history seems to indicate that the opportunity has been missed up to now: African resource-poor countries have outperformed resource rich countries in terms of growth since the 1960's (Auty 2001). This is certainly due to difficulties in managing resource rents. Some of these difficulties point to the volatility of primary commodity prices and the large share of these resources in African exports. But difficulties also arise from misguided governance and policy frameworks promoted by both international and African national policies. To turn natural capital, and especially mineral resources-the main focus of this chapter-into an opportunity requires the fine-tuning of various complementary policies which can easily go astray (Collier 2010).
The first section of this chapter is devoted to the African socio-economic context using various forms of capital as an organizing principle. The second section conducts an inventory of African nonrenewable resources and identifies the source of their price volatility. The third one evaluates the institutional framework for the extraction of mineral resources which was in place until very recently. The fourth one looks at the macro-economic implications of revenue volatility. The fifth one looks at the Natural Resources Charter proposed by P. Collier and M. Spence for adoption both by African countries and the foreign corporations which operate in African countries. The sixth one examines briefly the sources of the principles of corporate social responsibility developed by international institutions and some developed countries hosting the headquarters of these foreign corporations. A seventh one examines in detail the “African Vision 2050“ which is a very encouraging document focusing exclusively on the responsibilities of African countries. Finally, an eighth section documents the important role Canadian companies may play in the implementation of the Natural Resources Charter. A concluding section emphasizes hopeful signs in favor of the implementation of the “African Vision 2050” and the Charter.
Document Type: Research Article
Publication date: January 1, 2011