The World Bank’s Extractive Industries Transparency Initiative Plus Plus that comes in the wake of protests against soaring commodity prices in Niger, Senegal, Egypt, Burkina Faso and Mozambique among other African nations is a welcome move. The initiative aims at developing national ability to use commodity boom for growth and avoiding market distortions.
The initiative is a wake up call to the African continent to make use of its rich potential as well as benefit its citizenry. It is a shame that countries in Africa like DRC Congo, Nigeria and Sudan that are rich in natural resources such as oil and diamonds are often plagued with persistently poor economic growth compared to their less “blessed” neighbours.
With huge revenues from natural resources, most African governments promote less economic diversification; spend more on political projects; invest little in human development and do not make strategic planning and long-term development goals a priority. Moreover, governments fail to collect taxes giving citizens little room to hold them accountable. It remains to be seen how the World Bank shall address these factors.
Nevertheless, the continent should not entirely depend on natural resources at the expense of innovation.Japan and Netherlands for example have no natural resources yet they’re prosperous. The resource market can’t be blamed. Since the market is like an engine, it is neutral and will drive one wherever he wants to go.
The parameters of wealth creation are gradually shifting in favour of science and technology-based competitiveness instead of natural resources. The key to Africa’s prosperity therefore lies in establishing a critical mass of science and technology-based institutions that will act as think-tanks and incubators of technical information and innovation, consequently spurring productivity.
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