WEALTH IN OUR LAND - An African Valentine
By Sunny Oputa
Africa the cradle of human civilization is in no small measure blessed with abundant natural resources. From diamond to natural gas, there is no known high dollar earning commodity that is not found in Africa. Not only are these mineral resources available in Africa, the African producing nations are counted among the top producers in the world. A cursory look at the global commodity sector shows the position of Africa in the production of high –dollar yielding mineral resources.
At the current world’s market price of about $100 per barrel of oil, and $1662 per ounce of Gold to mention but a few, resource-rich nations in Africa should be economically buoyant and the region’s general economic growth should have been expected to grow at a tiger –stride instead of it’s lack luster snail pace . Only few economies in the region such as those of South Africa, Nigeria and Algeria have shown some considerable upward locomotion in the past 3 years. It becomes obvious that much have been left undone in the development of Africa’s economy through the revenues of its abundant mineral resources. Poor management of the resources and lack of adequate visionary and pragmatic leadership to steer the economic boat accordingly has been identified as some of the core problems facing the continent’s socio- economic development. Poor policies initiated by some African governments and jaundiced contracts have caused most of the economic stagnancy or back-pedaling experienced in the region’s economy. Some of the wrongly crafted policies either threatened foreign direct investments in the region or aided capital flight.
While taking some steps to ameliorate the aforementioned discrepancies, some nations have started initiating policies such as the South Africa’s Black Economic Empowerment (BEE) and Local Content Policies. Despite numerous criticisms and shortfalls, BEE and Local Content are becoming huge economic success in Africa. Take for instance in South Africa blacks ownership of mining industry and wine producing companies have increased tremendously. Before the end of apartheid, wine production, major control of mining industry and financial institutions used to be mere exclusivity of white entrepreneurs. Now these business domains have huge number of black players who do not only have adequate share of the market, are also competing very well. Many Africa countries and local companies have proved themselves very competent and partnerships with foreign companies have produced good results. Nigeria, the highest oil producer in the region has implemented a very successful Nigerian content policy and the monitoring has shown that local companies have continued to increase their ante.
Above all, the success of BEE and Local Content can easily be seen through the emergence of a new community of millionaires and middle class in some of the African nations involved. However, the only caveat still holding these processes to earn a full “A” is that much development have not been realized in rural areas depicting convulsing wealth distribution and technology development is still more of an imported asset. These economic overhauling processes require the support of all and sundry and also time to achieve the fully intended goals. It is clear enough that at this present stage Africa cannot adequately develop its mineral resources on its own. Problem of capitalization, technology and resourceful human capital have continued to plaque most countries in Africa, thereby becoming big albatross to their development agenda. Africa has shown love and knack to collaborate with international companies in the development of its mineral resources.
The third largest populated continent in the world may not have problems sharing revenue from its mineral resources with investors. However, Africa is bothered with high level capital flight which has paralyzed its economy for many years and also cares for dynamic implementation of corporate social responsibility acts for the protection of its environment and development of its human resources. This is the new thinking in the continent.
Geopolitics and corruption are no longer major obstacles towards the attraction of foreign direct investments in Africa. Democratization in the continent is gaining stronger hold and people now accept dialogues more in conflict resolutions instead of taking up arms. Most of the African producing nations are working towards maintaining accountability through extractive transparency as they understand the consequences of derailing from the new order. Recent statistics have also shown that the corruption accusation which stigmatized Africa for long was a negative campaign of calumny to exploit the continent of its mineral wealth. There were and are still some corrupt regimes in Africa, but recent findings exposed the odious ways in which many international companies perpetrated and encouraged corruption in Africa in order to have their ways.
In this period of Valentine where love is in the air, it is good to get real . The truth of the matter is that foreign direct investments are needed to unlock the potentials of Africa as a wealth basket of the world. African governments would continue to usher in new mineral laws to ensure that their God given endowment is properly used for the development of their continent. What is most important right now is to ensure fairness, compliance and ethical dealings. This is the global love that matters in this period of Valentine.