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Harnessing Africa’s Extractive Industries for Structural Transformation and Inclusive Development

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Africa is a continent rich in natural resources. In recent years a combination of rising commodity prices, improvements in exploration technologies and greater political stability has created a boom in the oil, gas and mining sectors in many countries. According to one estimate, 50 states in Africa’s are either producing or exploring for oil. New discoveries of gas along the eastern coastline of the continent could be the biggest the world has seen in the last decade. The abundance of natural wealth comes with risks and challenges, but also with tremendous opportunities for advancing growth and inclusive development.

New discoveries raise expectations for quick pay-outs and legitimate calls for spending resource revenues on alleviating absolute poverty or compensating communities affected by the mining. At the same time investing the revenues from the extraction of non-renewable resources is critical to maintaining the total wealth of a nation. Depending on the level of development and the needs of the people in each country the portfolio of investment will span financial, physical, human and social capital classes. But simply replacing natural capital with other types of capital is not enough. The outcome must be structural transformation so that the economy is diversified and can keep growing even after the resources are depleted.

Guiding questions

In this session speakers will present their own perspectives on how countries can harness extractive industries for structural transformation and inclusive development. Some specific issues for consideration include:

  • What has been the role of natural resources in driving structural transformation in the past and what can countries with new discoveries learn from these experiences?
  • What are the critical lessons for economic diversification in output, export, revenue and employment?
  • How can countries manage the trade-offs between the short and longer-term needs that revenues can be made to address? What role should industrial policy play in terms of driving structural transformation?  
  • What can be done to mitigate the inequality enhancing effects of mining-driven growth and make the process more inclusive and more effective in generating employment opportunities?

AEC Partners