Africa's mineral wealth can be a springboard for development | A. mar Dieye

04 Oct 2013

Market scene in Togo Africa is poised to make the delicate transition from growth to shared prosperity and increased well-being. Photo: UNDP in Togo

Africa is on the verge of a development breakthrough. Extreme poverty has come down, child and maternal mortality have been sharply reduced, and most countries have made progress towards meeting the Millennium Development Goals (MDGs), the eight internationally-agreed targets to reduce poverty, hunger, and disease by 2015.

But it will take a different kind of growth - faster and more inclusive - to improve the lives of people in Africa on a much broader scale.

There is today a unique combination of high commodity prices and very large discoveries of oil, gas, minerals that has the potential to both accelerate growth and improve standards of living in Africa in the years to come - provided that African countries can do three things.

First, capture effectively and transparently the proceeds from extracting resources. Much of the income generated from mining, oil, and gas industries usually goes to the foreign companies providing the technology, skills, and finance. Whether Africans benefit depends largely on how effective governments are in raising revenues from taxes and royalties.

Second, managing revenues from oil, gas and mining also implies making decisions on how much to invest now, versus how much to save for later, given that these resources will eventually run out. When a country is rich, it can either save or distribute most of these resources directly to people, investing in infrastructure, health, education and building human capacity to deliver these services.

Third, because mineral, oil, and gas reserves are finite, the economy has to progressively expand into other sectors, such as manufacturing, high productivity agriculture and high value services. Investments are needed to allow for a structural transformation of the economy, including higher productivity and better paying jobs. This is particularly important in Africa, where up to 80 percent of the people at work - and 85 percent of women are trapped in low-productivity agriculture and low-value services that pay poorly or don't pay at all.

I have every reason to think Africa will embark on this much anticipated development breakthrough, and we, at UNDP,  are committed to supporting the region as it makes the delicate transition from growth to shared prosperity and increased well-being.

Talk to us: How can Africa’s resources benefit all of its citizens and drive development?