Natural resource wealth widens inequality – study

The income generated from the exploitation of natural resources in numerous African nations has widened the gap between rich and the poor and most Africans are yet to see the benefits, according to the Africa Progress Report 2013.The annual Report–Equity in Extractives released yesterday in Cape Town, South Africa, during the World Economic Forum on Africa, acknowledges that Africa is standing on the edge of enormous opportunity and policy makers have critical choices to make.“They can either invest their natural resource revenue in people to generate jobs and opportunities for millions in present and future generations or they can squander this opportunity, allowing jobless growth and inequality to take root,” reads a statement from Africa Progress Panel (APP).APP chaired by former UN secretary-generalKofi Annan, consists of 10 distinguished individuals from the private and public sector seeks shared responsibility between African leaders and their international partners to promote equitable and sustainable development for Africa. The report is the APP’s flagship publication. It draws on the best research and analysis available on the continent. According to the findings, Africa lost twice as much in illicit financial outflows as it received in international aid.The 2013 survey explores the potential, problems and policy options associated with natural resources in Africa, focusing on oil, gas and mining.“In many African countries, natural resource revenues are widening the gap between rich and poor. Although much has been achieved, a decade of highly impressive growth has not brought comparable improvements in health, education and nutrition,” the survey further says.Leaders urged to step upIt highlights five deals between 2010 and 2012, which cost the Democratic Republic of the Congo over US$1.3 billion in revenues through the undervaluation of assets and sale to foreign investors.The amount represents twice the annual health and education budgets of a country with one of the worst child mortality rates in the world and seven million pupils out of school.“Tax avoidance and evasion are global issues that affect us all. The impact for G8 governments is a loss of revenue. But in Africa, it has direct impact on the lives of mothers and children,” said Annan.“Throughout the world, millions of citizens now need their leaders to step up to the mark and lead. Fortunately, momentum for change appears to be accelerating.”Annan stated that Africa’s vast oil, gas and mining resources remain largely untapped and at the same time the continent is riding the crest of the global commodity slate.He noted that natural resource exports have propelled the region into the world’s high growth peak, adding that strong demand in emerging markets is likely to drive at least another decade of high prices for Africa’s natural resources.The report urges African governments rich in mineral wealth to improve their governance and strengthen national capacity to manage extractive industries as part of a broader economic and developmental strategy. “Africa’s vast mineral resources could transform social and economic development. The Africa mining vision sets out a compelling agenda for change,” the survey indicates. According to the continent natural resource index, lack of transparency remains a major concern in resource-rich countries in Africa. Graça Machel, a Mozambican politician and humanitarian and a member of the APP, said: “This report makes a critical contribution to debates on Africa’s natural resource wealth. If its recommendations are taken, Africa will accelerate progress towards the Millennium Development Goals. More kids will go to school, fewer women will die in child birth, more children will survive their childhood.” Though Rwanda may not rank among the countries in Africa rich in mineral wealth, the country’s mining sector is soon becoming one of biggest foreign exchange earners, fetching $136.6m (about Rwf86.7b) last year, only bettered by tourism. The government targets to raise $407m (Rwf268.6b) from mineral exports by 2017.

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Natural resource wealth widens inequality – study