“Africa loses twice as much in illicit financial outflows as it receives in international aid. It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximize their profits, while millions of Africans go without adequate nutrition, health and education.” Kofi A. Annan, Chair of the Africa Progress Panel.
For much of the region’s history, Africa’s resource wealth has been plundered and squandered. It has served the interests of the few, not the many. Revenues that could have been used to improve lives have instead been used to build personal fortunes, finance civil wars, and support corrupt and unaccountable political elites. This report has a simple message: history does not have to repeat itself. Today, Africa’s governments have a unique window of opportunity to convert natural resource wealth into a catalyst for poverty reduction, shared prosperity and accelerated human development.
This year’s Africa Progress Report rejects the view that Africa is blighted by a “resource curse” – an affliction that automatically consigns the citizens of resource-rich nations to a future of economic stagnation, poverty and poor governance. There is no curse. The malaise that has afflicted natural resource management in Africa is caused by the wrong domestic policies, weak investment partnerships and failures in international cooperation. Lifting that affliction will require decisive leadership by African governments, backed by multilateral action and a commitment by foreign investors to adopt best international practices.
Mapping Africa’s Natural Resource Wealth: Selected Countries and Commodities
There is cause for optimism. Global market conditions point to another decade of high prices for natural resources, creating an environment conducive to economic growth. The policy environment has also improved. Strengthened public finance management has enabled Africa to escape the boom-bust cycle associated with past upswings in commodity markets. There have been moves towards greater transparency and accountability – the twin pillars of good governance in natural resources. New legislation in the United States and the European Union will add further impetus to these moves. Many companies are now looking beyond short-term profits and towards long-term investment partnerships. These companies recognize the economic, as well as the ethical, case for strengthening linkages to local firms, for social and environmental impact assessments, and for engagement with local communities.
None of this is to understate the risks and challenges that come with Africa’s ongoing resource boom. Surges in revenue have to potential to destabilize budget planning. Governments must make tough choices over how much to spend today and what to save for the future. There are risks that the fragile and, in some countries, still limited moves towards more open budget systems and enhanced disclosure in state extractive companies will be reversed. The Africa Progress Panel is concerned at foreign investors extensive use of offshore companies, shell companies and offshore jurisdictions. And much of Africa remains trapped in a pattern of exporting raw materials, with few countries successfully breaking into manufacturing and processing. None of this is inevitable – and our report demonstrates that the alternatives are practical, achievable and affordable.
Published every year, the Africa Progress Report is the Africa Progress Panel’s flagship publication. The report draws on the best research and analysis available on Africa and compiles it in a refreshing and provocative manner. Through the report, the Panel recommends a series of policy choices and actions for African policy makers who have primary responsibility for Africa’s progress, as well as international partners and civil society organizations.
You can download the full report here [120 pages, 4.5MB]
You can also download a summary of the report here [24 pages, 1.4MB]
For more details about the report and the panel visit the official African Progress Panel Website here