The African Development Bank (AfDB) Group's Chief Economist, Louis Kasekende, has said that the Natural Resource Charter - a set of economic principles for governments and civil society organizations, detailing best approaches to managing opportunities created by natural resources for development - would help governments and societies rich in natural resources to manage such resources in a way that generates economic growth and promotes the people's welfare.
He expressed these views on Wednesday, May 13, 2009, in Dakar on the sideline of a presentation on the Natural Resource Charter during the institution's Annual Meetings.
Abundant natural resources in many African countries have not translated into improved standards of living for the people in Africa and they have been the source of distortions in economic development in the Bank's regional member countries.
He also said that the mismanagement of natural resources has also been at the centre of the crisis in many mineral-rich African countries. Revenue from these resources has not been used to improve governance, especially in fragile states, he added.
It is in this context that the AfDB is supporting the charter, drafted by an independent group of economists, lawyers and political scientists, since it will guide African governments in the management of their natural resources.
The AfDB will therefore support the charter by strengthening governance in its member countries, scaling up infrastructure and creating centres of excellence for the promotion of the charter in Africa, Mr. Kasekende said.
He urged African ministers, delegates and the media at the event to be good ambassadors of the charter since it is crucial for Africa's development.
Presenting the charter, Professor Paul Collier of Oxford University said that he and his co-authors believed the exploitation of natural resources should be carried out to help a country meet its broader social and economic goals and not as an end in itself.
"This means having a vision of how the resource sector fits into a country's economic future. For some countries, the best use of resource endowments may be to leave it in the ground for future use; for others, it may be to extract rapidly to generate revenues to sustain the investment necessary for growth and to meet urgent human needs," Mr. Collier said.
The charter, according to Mr. Collier, is designed primarily for policy-makers in resource-rich countries as well as international companies, intergovernmental organizations, civil society organizations and governments of resource-importing states all have roles which affect the ability of societies to harness their endowments.
Noting that turning natural resources into sustainable development was not simple, Mr. Collier said that "Countries must decide whether or not to extract their resources and, if so, how quickly; whether to use national companies, or rely on the private sector; how to design laws, regulations and contracts that can produce the greatest benefits for the country ...."
He maintained that each of those choices had far-reaching consequences and could shape a nation's development path for generations.
"We share the belief that natural resource wealth can be a powerful tool for social and economic advancement, but only if countries are able to meet some special challenges. We try to offer advice that is useful, clearly expressed and perhaps non-obvious," he said.