Post date: May 10, 2013 3:27:20 PM
The Africa Progress Report 2013, launched by Kofi Annan at the World Economic Forum in Cape Town, suggests that Africa's natural resources could dramatically improve the lives of millions, easing the continent's dependence on aid, if governments and corporations take measures to improve transparency and governance in the extractive industry.
OFFSHORE, GHANA (TULLOW OIL) - Africa is sitting on a treasure-trove of largely untapped mineral resources, and if managed properly, those resources could lift millions of people out of poverty, according to a report launched on Friday (May 10) at the World Economic Forum by the Africa Progress Panel, a panel of eminent personalities chaired byKofi Annan.
According to one estimate in the report, Africa holds 30 percent of the world's mineral reserves, and its economies are growing faster than any other region of the world except for East Asia - growth in Sub-Saharan Africa has remained robust at over 5 percent per year for the past ten years.But the report also suggests that Africa needs to better manage its vast natural resource wealth to improve the lives of the region's people by setting out bold national agendas for strengthening transparency and accountability.
"Africa's resource wealth can lift millions out of poverty," said Africa Progress Panel Chair Kofi Annan at the launch. "It can build shared prosperity, and bring hope to future generations. It is eminently possible that we can do it, but it will take bold leadership and it means building up proper governance, solidifying democracy, embracing transparency and accountability, and strengthening governance, institutions and the rule of law," said Annan.
In some African countries, natural resource revenues are widening the gap between rich and poor. Although much has been achieved, the last decade of highly impressive growth has not brought comparable improvements in health, education and nutrition.
"You see some countries where poverty has declined, but you see an increase in inequality," says Caroline Kende-Robb, the Africa Progress Panel's Executive Director. "Ultimately, that increase in inequality is a drag on further poverty reduction. And we have some data in the report that shows that the increase in inequality has actually decreased the potential for growth and poverty reduction. So I think at the moment it's a very very mixed picture, but the potential is there," said Panel Executive Director Caroline Kende-Robb.
Ghana is one of Africa's newest oil producers. Oil started to flow here in December 2010 and the country's GDP growth surged to over 14 percent in 2011 as a result. In March 2013, The Economist listed it as one of the world's top 10 fastest-growing economies.
Here in the region of Takoradi, the town nearest the oil discoveries off the country'swest coast, the growth is tangible and opportunities for entrepreneurs abound.
Business in Takoradi had been sluggish before the oil started to flow, with the town having fallen into decline as transport connections with the rest of the country decreased and businesses shut down; but now, new infrastructure is being put in - this road is being widened to allow for the increased commercial traffic - rents have doubled and more and more businesses are moving into the area to cash in on the trade.
But in spite of the boom, Africa loses twice as much in illicit financial outflows as it receives in international aid. Oil and minerals could mean less dependence on aid in future, but only if problems like tax avoidance, corruption and weak governance are tackled, and more money is spent on building the manufacturing sector, education and health.
"Africa really has a chance to take charge of its own destiny economically," says Annan, "but it will depend on a couple of things. Good governance, determination to get more value for money, to get more of the revenues that accrue from the extractive industries, and use that for the improvement of the conditions of the African people."
Already, Africa's leaders have adopted the Africa Mining Vision to try and clean up the industry, but transparency and accountability have to improve across the board.
Some oil companies are also increasingly aiming to adhere to industry "best practice" standards, which include mitigating the environmental impact of their activity and investing in social projects to improve living standards in areas where they operate.
Chaired by Kofi Annan, former Secretary-General of the United Nations, the ten-member Africa Progress Panel advocates at the highest levels for equitable and sustainable development in Africa.
The Panel releases its flagship publication, the Africa Progress Report, every year in May.