African Natural Resources: solving the great conundrum. It is now generally accepted that Africa is the richest continent in the world by natural resources but the poorest by bank balance. This “great conundrum” has been made possible by a skewed world economic and political order that ensures that African resources are exploited for a song by multinational companies which leave very little back in Africa for the development of the continent, so little that there is never enough to run the African economies without foreign aid. This month we probe the hows and whys of the great African puzzle of abundant resources in the midst of poverty, and how the continent can rewrite the world economic order by employing a revolutionary way in owning its resources. This lead piece, in our multi-part cover story, is written by our editor, Baffour Ankomah.
How does it happen – a rich man, super rich in fact in all the resources that create wealth, who is yet poor, living in abject poverty, who, without the grace of alms liberally begged from abroad, which are sometimes stingily given, cannot make ends meet? The richest poor man – how does it happen? The first instinct is to say such a man does not exist, in fact has never existed! But he does! In our era! In the shape of an African continent which, above all continents, is the most richly blessed with the strategic resources that the world economy needs to turn on its axis.
One estimate, in fact, says the majority of all the world’s natural resources are in Africa and yet most Africans are poor. And this is notwithstanding the fact that without these African resources, the world economy would suffer and would definitely not be what it is today. So why then is Africa poor in the midst of these stupendous riches?
That is the great conundrum of the modern era that Africa will have to collectively solve if there should be any hope for the continent and its future generations.
By dint of Africa’s colonial and post-colonial history, and the refusal of the metropolitan powers to help the continent in a massive way to recover from the horrors of colonialism, as those powers have helped other countries since the Second World War, the continent does not have the requisite capital – human, financial, machinery, and knowhow – to exploit its own natural resources, and thus relies on multinational companies to extract those resources on its behalf – if it is on its behalf.
And this is where the problem lies. Because of the lack of Africa’s own capital to exploit these resources, the multinational companies use the muscle of their capital to bamboozle individual African countries to grant them concessions that, in effect, give the companies a disproportionate, and some say unconscionable, share of the proceeds that accrue from the African resources.
The great sinners in this massive rip-off have been companies in the extractive sector. They use their negotiating skills, honed over decades and centuries, and sometimes with the help of the political and economic muscle of their home countries, to browbeat African governments to sign away mining concessions that ensure that Africans get very little for their God-given resources.