
Contents
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12.1 Introduction 12.1 Introduction
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12.2 The Roadmap for Effective Utilization of Africa’s Natural Resources 12.2 The Roadmap for Effective Utilization of Africa’s Natural Resources
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12.2.1. Get the best deal and prices for the resources 12.2.1. Get the best deal and prices for the resources
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12.2.1.1 Assess the available resources 12.2.1.1 Assess the available resources
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12.2.1.2 Seek transparent and competitive processes for exploration and extraction 12.2.1.2 Seek transparent and competitive processes for exploration and extraction
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12.2.1.3 Get it right from the beginning and negotiate good contracts 12.2.1.3 Get it right from the beginning and negotiate good contracts
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12.2.1.4 Beware of tax avoidance and transfer pricing 12.2.1.4 Beware of tax avoidance and transfer pricing
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12.2.1.5 Avoid bundling deals particularly those uncompetitive 12.2.1.5 Avoid bundling deals particularly those uncompetitive
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12.2.2 Adopt appropriate fiscal policies to utilize the resources effectively 12.2.2 Adopt appropriate fiscal policies to utilize the resources effectively
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12.2.2.1 Adopt fiscal rules to prevent negative impact of volatility 12.2.2.1 Adopt fiscal rules to prevent negative impact of volatility
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12.2.2.2 Ensure inter-generational transfers and set SWFs 12.2.2.2 Ensure inter-generational transfers and set SWFs
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12.2.2.3 Increase domestic investment and build domestic assets 12.2.2.3 Increase domestic investment and build domestic assets
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12.2.2.4 Increase efficiency of public spending 12.2.2.4 Increase efficiency of public spending
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12.2.3 Distribute equitably and build appropriate institutions 12.2.3 Distribute equitably and build appropriate institutions
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12.2.3.1 Distribute geographically with larger share to producing regions to prevent future conflicts 12.2.3.1 Distribute geographically with larger share to producing regions to prevent future conflicts
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12.2.3.2 Build state institutions to prevent conflict and secessionist movements 12.2.3.2 Build state institutions to prevent conflict and secessionist movements
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12.2.3.3 Allocate a smaller portion as transfers or dividend to citizens 12.2.3.3 Allocate a smaller portion as transfers or dividend to citizens
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12.2.3.4 Promote diversification of production and exports 12.2.3.4 Promote diversification of production and exports
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12.3 The Way Ahead 12.3 The Way Ahead
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References References
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12 Natural Resources in Africa: Utilizing the Precious Boon
Get accessDubai Economic Council
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Published:05 December 2014
Cite
Abstract
African resource-rich developing countries (RRDCs) can avoid the resource curse by strengthening political accountability and effective management of the resource rents. The roadmap for turning Africa’s newly found oil and mineral resource into a “precious boon” for development hinges on three pillars: getting the best deal and prices for the resource; efficiently utilizing the resource by adopting the “right” fiscal institutions; and, equitably distributing the resource to maximize the society’s welfare. Needless to stress that the proposed strategy is premised on the presence of accountable and transparent polity and effective economic governance, though the former might also positively influence political and economic governance.
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