How sub-Saharan Africa nations are short-changing their citizens on the benefits of natural resources

A New York-based Natural Resource Governance Institute (NRGI) has clamoured for an ideal society where policymakers and government officials adhere strictly to the rules of engagement in the extractive industry to imbibe transparency.

In its 2016 annual report, the World Bank Group said it had invested just over $3 billion in extractive industries in 2016 -- three times as much as the year before

The ideal settings, NRGI, said will help sub-Saharan countries to cater for its citizens and reap to the fullest the benefits from their wealth of endowments of oil and minerals.

In its ‘Resource Governance Index: From Legal Reform to Implementation in Sub-Saharan Africa,’ the Institute examines how countries across resource-rich sub-Saharan Africa are failing to reap the benefits from their wealth due to an “implementation gap” between the laws that govern extractive industries and the practices in reality.

An analysis of the extractive industries in 28 sub-Saharan African countries reveals that all but two – Botswana and Zambia – are failing to deliver the standards laid down in their laws. Researchers using data from the Resource Governance Index found that in this respect the region performs worse than any other in the world.

Silas Olan’g, Africa Co-Director for the Natural Resource Governance Institute, said, “If countries in sub-Saharan Africa closed the ‘implementation gap’ and fully implemented their own laws, they could generate greater income from natural resources. They could also better combat the negative human and environmental impacts of extraction.”

Africa is abundant in natural resources but lacks legal and transparent frameworks

The report states that Africa is abundant in natural resources and is home to 30% of the world’s oil, gas and mineral reserves. But the biggest challenges are implementation such as fulfilling the legal requirements to transfer revenues collected from oil, gas and mining to local authorities, and publicly disclosing information on social and environmental impacts. 

“Half of the 28 countries studied do not disclose environmental and social impact assessments, even though this is a legal requirement in many countries.

“More than half the exports of many countries in sub-Saharan Africa come from natural resources and as much as 9% in the most oil-dependent countries. Mineral reserves represent a large share of government revenues across the region and have the potential to become even more important in countries with recent discoveries, such as oil and gas in Tanzania and Uganda, and large reserves of strategic minerals such as cobalt in the Democratic Republic of Congo,” the report states. 

NRGI suggests that if governments in sub-Saharan Africa are well-placed to build on the strong laws they have developed, their natural resources will offer the potential for driving economic development.

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