21 August 2018

Kenya: Wanted - New Approach to Extractives

The challenge of Africa's development will be met through mobilisation of its resources, bringing goods and ideas to a global market that needs them and defining policies that support creation and fair distribution of wealth locally.

The resources for the continent's development aspirations will not come from foreign aid, grants and loans.

After all, Africa is home to about 30 per cent of the world's mineral reserves, 10 per cent of oil and eight per cent of natural gas. The assets needed are mostly available in its soil.

PRODUCE IDEAS

Africa's human capacity will have to be developed to produce the goods and ideas that sustain its development, and government, the private sector and civil society will have to be primed to meet the ultimate challenge of wealth creation and equitable distribution.

A two-day meeting in Nairobi, Kenya, from tomorrow will discuss the first of these challenges: Effective and sustainable management of Africa's natural resources with a focus on East Africa. The continent is believed to be the most-endowed region with an abundance of all that has enriched peoples and nations across the globe: Oil, gold, diamond, coltan, platinum and so on.

The challenge for the world's poorest continent is simply how to ensure that below-ground riches become the above-ground wealth that can propel the poor to become the architects of their destiny with more food, better jobs and improved education and health for all Africans.

EXPLOITATION

Albert Einstein said, "The problems that we face cannot be solved by the same level of thinking that created them."

Centuries of exploitation of Africa's resources have generated massive wealth for those that developed the know-how to find and bring them to the market.

That they continue to do so in an age when the technology for achieving desired outcomes has become ubiquitous and available to all should give us pause and compel every African to question current development thinking on the pros and cons of resource extraction on the continent.

Out of this meeting should come ideas and models of governance on how to create real wealth from the region's natural resources and to use it to develop East Africa.

Research by Mark Curtis for the organisation War on Want found that London Stock Exchange-listed companies control more than $1 trillion worth of African gold, diamond, oil and gas resources. China may hold multiples of that in African minerals stock.

FINANCIAL FLOWS

An African Union study shows $50 billion in illicit financial flows leaves the continent yearly. That ought to thrust every African into a state of deep introspection.

As Kenya, Tanzania and Uganda become new actors in the global extractives sector, the over-arching question must be addressed: Will they go the way so many others on the continent have, victims of the proverbial "resource curse", or open new pathways for change with the active collaboration of their citizens?

Shortly after coming into office in 2015, Tanzania's President John Magufuli expressed profound disappointment in that his country was not getting a fair share of the revenue from its extractive resources. President Idriss Deby Itno of Chad had said the same thing over a decade earlier.

MASS POVERTY

Long before them, President Mobutu Sese Seko of then-Zaire (present-day Democratic Republic of Congo, DRC) -- irrefutably the poster child of that African conundrum of co-existent wealth and poverty -- hinted that he could not comprehend why the country would not emerge from mass poverty.

How do the billions of dollars that come out of Africa's sub-soil leave the continent with hardly a trace?

The experts will speak of poor contractual arrangements, ill-conceived legal, policy and institutional frameworks, absence of transparency in revenue-sharing and disregard for land and community rights. The list could go on.

The travails of Nigeria's Delta region and Ogoniland exist to remind us of the environmental disasters that come with unrestrained exploitation of natural resources.

CORRUPTION

The huge elephant in every room -- unbridled corruption -- continues to drive discussions and shape outcomes in the sector, killing every hope that Africa will, some day, reap any meaningful dividends from the one thing nature endowed it with, for the benefit of its people.

The Nairobi meeting will bring together public sector experts, business leaders, representatives of academia and civil society and media professionals.

A lot will depend on the outcomes. It may well be just another meeting to engage in yet another random intellectual exercise.

Or, as I fervently hope, it may result in a new level of thinking on how the extractive industries can better serve Africa's development needs.

Mr Chinje is a senior adviser, the African Media Initiative. [email protected]

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