ATLANTA — Africa still remains one of the poorest regions in the world despite massive reserves of oil and precious metals that are essential for industry, transportation and technology. So why does one of the world’s most resource-rich continents continue to suffer under the heavy yoke of extreme poverty?
A recent survey of 16 African countries over the past ten years shows that Africa still has a long way to go to reduce poverty. The Afrobarometer survey found that many lack basic necessities such as water, food and healthcare.
Africa is projected to grow at a rate of 5 percent, but the fantastic growth rate seems to be escaping many of those at the bottom. The researchers concluded that poverty is the worst in places in which government spending on infrastructure and education is the least.
West and East Africa reported the highest shortages of services while North Africa reported the least.
Over one-half of the 50,000 citizens surveyed rated the economy as bad and only one-third stated that their living conditions have improved over the last year.
While lack of government spending on basic necessities and services is definitely lacking, it alone cannot account for the extreme poverty across the continent. Numerous scholars have pointed to the presence of vast reserves of natural resources as one of the chief causes as to why Africa cannot break the cycle of poverty. Many studies have been devoted to the subject and they conclude that many countries possessing significant natural resources tend to have low levels of development and democracy.
The lack of development in resource-rich nations occurs because profits garnered from natural resources are often diverted into the pockets of despotic rulers. For instance, Omar Bongo, the former leader of Gabon, diverted large profits into his personal accounts.
Gabon received a -9 on the Polity Index, a measure of democracy and openness. The index is rated from 10 to -10 with the lower numbers representing less openness.
Shockingly, Oxfam points out that $1 billion per week has been lost to the continent over a period of 30 years due to illicit financial flows. From 1980 to 2009 over $1.4 trillion has been lost.
Another reason for extreme poverty in resource-rich nations is their reliance on resource profits to fill their coffers. With most of their money coming from natural resources, there is no need to appeal to the public for tax revenue.
This results in absolutely no impetus for a regime to justify its rule and actions to the public since they are able to exist without their help. And no reason to justify one’s rule to the public leads to weak institutions that provide no constraints on the government.
There are signs that many African governments are attempting to climb out of their resource curse. Ghana has developed a new petroleum management law that all new mineral discoveries will fall under.
The Economic Community of West African States (ECOWAS) is working on a regional mining code that will protect the mineral rights of localities.
Africa’s attempt to bring resource profits under the rule of law is heartening but there is much work to do. Specifically, good governance is a must to ensure that no profits are siphoned off by leaders. Hopefully with increased globalization, Africa’s social contract can be remedied and its citizens can enjoy the true benefits of its natural resources.
– Zachary Lindberg