The African continent is rich in natural resources among the other continents, it has large quantities of resources, but ironically it is still dragging in development. For instance, the discovery of new oil sources in Africa has enhanced the economic significance of the commodity. Oil is a major source of income for Sudan and Nigeria. The US and Europe dominated the Democratic Republic of the Congo’s oil output. Offshore and continental oil productions contribute to the supply of oil. The United States Department of State estimates that Sudan’s oil exports in 2010 were US$9 billion. Most African countries are considered developing nations by the European countries that arAe far away from them in terms of development. During colonization, most European colonies took most of Africa’s resources to establish their countries back. This left Africa the least developed, but Africa is still considered the mother of many natural resources. Therefore, this article will examine strategies that African countries need to cut ties with the European countries and keep their resources to themselves to develop.
A natural resource is a substance that people can use to support their life and meet their needs. In order to sustain life and fulfill human needs, natural resources are elements extracted from the Earth. Thus, African mineral wealth is dominated by gold and diamond mining. Africa accounted for 22% of global gold output in 2008, with 483 tons (Cumming pg255). Mostly these minerals find their way out to the European countries rather than being used in Africa for growth. Most of these countries, for instance, South Africa, have ready markets in Europe, which facilitate the buying of mineral resources. Strict measures and policies should be implemented to curb such instances of transporting natural resources; markets need to be built in Africa to allow the trade of minerals, for instance, diamonds from South Africa be traded locally. Agencies like the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of Western African States (ECOWAS) need to implement strategies that will overlook issues of European acquiring resources from Africa and curb such activities. Also, the organizations need to come up with market plans to facilitate these products with the African countries. For example, Sub-Saharan Africa’s rural population still relies heavily on natural resources for their livelihoods. Local norms and conventions shape people’s daily usage of resources. Contrary to this, official policies from colonial and post-colonial times have shaped the commercial exploitation of natural resources, keeping it largely centralized (Cumming pg256). African organizations need to put policies and implement them to ensure African countries get revolutionized in terms of trade, industries for processing and manufacturing their natural resources and create trade locally and in case of selling these commodities to the European nations, these organizations should ensure they get good revenue in returns to stabilize their economy back at home.
The international community might change to a “contract with African neighborhoods,” incorporating the leading and trailing nations of the neighborhoods and the donors’ community, giving the proper incentives to promote the growth of regional cooperation efforts in Africa (Cumming pg256). Examples of commitments that African states might make include “African Economic Areas,” which should be established to unite leading and trailing nations in each region’s economic interests (Cumming pg256).
Free movement of people, money, products, and services throughout these regions is essential. Access routes between land-locked nations and commercial outlets must be maintained and protected, and the political space needed to enable regional infrastructure investment. The following commitments from international and bilateral development partners might be made in return for these actions: Improving the quality of social services and other life-sustaining infrastructure in low-income nations to raise living standards and enhance the availability of transferable human capital.
In the most promising economies, more money should be poured into infrastructure projects that support economic growth, such as building new ports, highways, rail and road networks and other means of transportation, as well as developing ICT infrastructure that connects major economies with their smaller neighbors’ markets for labor, capital, goods and ideas. The preferred treatment of exports from Sub-Saharan Africa by high-income nations, with no restrictions on origin or eligibility, limit the fast expansion of trade with other emerging economies in intermediate goods.
According to Professor Paul Collier, the historical ties between Europe and Africa make the two continents natural partners in economic and social development (Fielding pg680). Europe should take a proactive role in Africa’s development as the fastest-growing continent because of its vast natural resources. As Collier put it, “Africa’s prosperity is Europe’s opportunity” (Fielding pg680). Due to this development, many European countries are rekindling diplomatic ties with various African nations. Since Africa is still very poor and faces many social issues, Europe can help Africa meet these challenges through its efforts in development cooperation and its policies. Europe has a variety of ways it can aid Africa, not only with money but by helping African nations improve their abilities to govern themselves.
The proper economic regulations and reforms, institutional improvements, and the development of efficient execution capabilities create the tripod Africa needs to establish. Governments in Africa have one of the most difficult challenges: a thorough understanding of their natural resources. Negotiations with mining companies will be easier for governments if they can demonstrate their competence and trustworthiness. Companies are still estimating resources today, often to the country’s detriment as a whole.
The money generated by exploiting natural resources should be taxed more aggressively in the second step: this is where the funds for social infrastructure should come from. Extraction companies can take advantage of many tax breaks from the government. Therefore, their resources do not benefit the countries concerned. Furthermore, the extraction process often results in environmental degradation and unscrupulous practices. Extraction firms should be held accountable for their harm to the local community and be required to make full restitution. Of course, Africa does not represent the United States of America — Collier referred to the Mexican Gulf oil disaster and B.P.’s response (Campos pg790). Other countries have never seen this type of aggressive reaction to harm. Because of Africa’s weak legislative framework, mining corporations are not even obeying the country’s weak environmental regulations. Transparency in the allocation of natural resource wealth is something that governments must ensure. In addition, the advantages of natural resources must be conserved for future generations, which present administrations frequently overlook.
What should African nations do with the money they make from mining their natural resources? Collier used Norway as an example of how oil money may be used in various initiatives even outside Norway (in China and Brazil), as stated by Zallé (pg620). African nations need to have the ability to invest their natural resource wealth wisely. Developing the ability to invest is a prerequisite to even considering investing. A well-functioning governing structure is essential for this. Corruption is a major issue for African nations, and Europe can assist by opening its markets to African exports, as noted by Collier (Zallé pg620). The extraction firms themselves must be brought to justice—not in Africa, but in the E.U. and the U.S., where they are based. Only one issue with the E.U. Parliament’s decision on the illegality of bribing African countries is that it lacks jurisdiction. All corporations on the stock market must disclose any illicit payments they have received, per the USA Finance Act. Using this method has a more immediate impact. The E.U. should continue to provide financial assistance to organizations working in this field.
A better understanding of resource management is needed in Africa. A broader audience should be exposed to the worldwide effort Natural Resource Charter’s concepts and values. There is a lack of financial resources for NEPAD’s execution of the Charter, why NRC was established. E.U. assistance may be useful here; although few resources are necessary, the potential effect is enormous. The E.U. could assist ensure that Africa reaps the full advantages of its natural riches by taking a few simple actions.
As of yet, the second chance for Africa is the industrialization of its economy. There’s no comparative advantage to explain why two-thirds of the world’s buttons are created in China in one little town, so Collier gives a “course” on the economics of buttons. To break into the firm, a newcomer must overcome a cluster set-up in which the manufacturing chain is created, and economies of scale are realized (Buur pg125). Africa’s employment prospects in labor-intensive industries may improve only if salaries in Asia gradually rise. The European Union (E.U.) can assist by maintaining free markets and relocating some of its labor-intensive industries to Africa. The E.U. can assist by granting Asian products preferential access to our markets. In addition to what we are now doing, we should widen our markets to include other African nations.
Since gaining their independence, African nations have relied on outside help to get by. Programs such as the Millennium Challenge Corporation (MCC) and the Africa Development Foundation (ADF), which focus on people and countries rather than projects, have shown enduring effects in motivating local economies and reducing reliance on foreign assistance such as youth entrepreneurship, sustainable agriculture and enhanced access to power. As a result of these activities, many analysts claim that the supply of foreign aid has encouraged reliance on Africa and paternalism by the United States and other countries rather than fostering a spirit of collaboration.
Africa’s natural resources include anything from arable land to wildlife, and the continent has a lot to offer. Natural resources, both renewable and nonrenewable, are concentrated on the continent. Africa is home to 40% of the world’s mineral reserves, 10% of the world’s natural gas reserves, and 15% of the world’s oil reserves, according to the World Bank. This continent is home to 50 percent of the world’s gold reserves and up to 90 percent of the world’s chromium and platinum reserves, respectively (Buur pg133). Africa is home to the world’s largest cobalt reserves, as well as diamonds, platinum, and uranium deposits. It is home to 65 percent of the world’s arable land and 10 percent of the world’s internal renewable freshwater supply, according to the United Nations Development Programme. Using natural resources to support Africa’s development agenda toward greater riches is a possibility, but the continent must also ensure that future growth and exploitation of natural resources is result-oriented, climate-resistant, and environmentally friendly.
Priority number 1: Job Creation
According to African Development Bank, over 100 million people aged 18 to 28 make up Africa’s youngest population doubling by 2030 (Fielding pg684). Governments in Africa must devise policies and plans that will allow the private sector to be more competitive, promoting economic growth, job creation, and stimulating African economies. These policies could include more transparent government, better access to justice, more favorable investment climates, and reductions in red tape. Africa’s young will benefit from long-term investment in the private sector, infrastructure manufacturing sectors, and agriculture, which will help alleviate food insecurity and generate jobs. Improving the quality of education is equally important to having a well-trained workforce.
Priority number 2: Regional Integration
As Africa turns away from Western funding, regional integration is crucial to sustaining development and long-term prosperity. Inter-African trade is vital for economic growth since it boosts competitiveness, productivity, and builds infrastructure. All 54 countries on the continent of Africa are expected to join the African Continental Free Trade Area (CFTA) by 2017 and a continental union by 2019. This will be a turning point in Africa’s progress. According to the World Commerce Organization, trade between African countries is now just 12 percent of Europe’s 60 percent, North America’s 40 percent, and ASEAN’s 30 percent (WTO). Though, the CFTA would create the world’s biggest single market and effectively increase trade between African governments by 60% (Fielding pg688). An expansion of intra-African commerce and a tightening of the continent’s market are two powerful tools that may help the continent’s economy and its citizens’ well-being, reduce poverty, and attract more foreign direct investment (FDI). It will also diminish the continent’s present significant dependence on the outside world for economic development.
Priority number 3: Commercial engagement and trade
In order to ensure the long-term viability of the African trade system, leaders must aggressively pursue commercial and trade interaction. It is evident from the Trump administration’s latest trade report to Congress that the United States will always put America first in future trade agreements.
As a result of its bold economic changes, Morocco has emerged as Africa’s top destination for foreign direct investment, serving as a bridge between the United States and the continent’s African and European markets. Success at COP22, its readmission to the African Union, and its significant investment in Africa, the continent’s second-biggest investor after South Africa last year, bode well for the future.
It is also possible that African nations are not yet ready for trade discussions with the United States since trade talks with SACU and Egypt were postponed some years ago. Africa must emphasize increased interaction between members of regional economic communities to accomplish critical policy reforms and with the United States to speed up such restructuration and enhance trade and investment between the two continents. Nevertheless,
“The African continent has achieved significant democratic and economic progress in recent years and now occupies a rising role in the world arena,” said departing Assistant Secretary for Africa Ambassador Linda Thomas-Greenfield (Ndikumana pg234). The development of African commerce is a key strategy for African authorities to pursue to maintain this upward trend.
Compared to the less developed countries of Asia and Africa, Africa has a lower saving rate and a greater percentage of flight capital. Africa’s poverty has kept its birth rates high, especially when compared to the world’s other less-developed nations, since richer countries tend to see their population growth rates diminish. Similar to this, poverty may have both contributed to and been a cause of Africa’s countless civil conflicts.
Priority number 4: Curbing Corruption among African countries
Proper governance should be emphasized in African countries, and this will save a lot of natural resources which will be useful to a particular country. Corruption thrives in places with abundant natural resources. Natural resources-rich partner nations in development cooperation provide unique challenges for donors looking to make a difference. Inefficient use of natural resources is mostly due to corruption. Corrupt activities may be encouraged and made easier by both renewable and nonrenewable resource industries because of the large sums of money at stake, the remoteness of many operations, the secrecy of most contracts, and the arbitrary control that public authorities have over ‘national’ resources. The resource curse paradigm, which emphasizes the distorting impacts of resource riches on economic performance and governance institutions, is largely inspired by the analysis of corruption in natural resources.
In conclusion, natural resources are vital to the development of African countries. Even though Africa is home to a third of the world’s mineral riches, the vast majority of its people remain impoverished and do not profit from their wealth. Africa reaps the advantages of these riches only if these resources are sought in a transparent and responsible manner that respects people’s basic human rights. As a result, African governments should take advantage of this chance to implement policies that promote democracy, establishing an enabling climate for economic growth in Africa by focusing on tangible goals like job creation and regional integration. This will make the African countries cut ties with their European counterparts and focus on building their countries.
Work Cited
Ndikumana, Léonce, and Mare Sarr. “Capital flight, foreign direct investment and natural resources in Africa.” Resources Policy 63 (2019): 101427. (230-260) https://www.sciencedirect.com/science/article/abs/pii/S0301420719301199
Buur, Lars, Malin Nystrand, and Rasmus Hundsbæk Pedersen. The political economy of land and natural resources in Africa: An analytical framework. No. 2017: 02. DIIS Working Paper, 2017: (124-156)
https://www.jstor.org/stable/pdf/resrep13422.pdf?acceptTC=true&coverpage=false&addFooter=false
Zallé, Oumarou. “Natural resources and economic growth in Africa: The role of institutional quality and human capital.” Resources Policy 62 (2019): 616-624. https://www.sciencedirect.com/science/article/abs/pii/S0301420718304033
Cumming, Tracey L., et al. “Achieving the national development agenda and the Sustainable Development Goals (SDGs) through investment in ecological infrastructure: A South Africa case study.” Ecosystem Services 27 (2017): 253-260.
Campos, Mateus R., et al. “From the Western Palaearctic region to beyond: Tuta absoluta 10 years after invading Europe.” Journal of Pest Science 90.3 (2017): 787-796. https://link.springer.com/article/10.1007/s10340-017-0867-7
Fielding, David. “Paul Collier (1949–).” The Palgrave Companion to Oxford Economics. Palgrave Macmillan, Cham, 2021. 673-688.
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