Image Image Image Image Image Image Image Image Image Image Image Image

AfricaMoney | August 19, 2017

Scroll to top

Top

No Comments

Problem of plenty? Poverty haunts resource rich African nations

Problem of plenty? Poverty haunts resource rich African nations

Africa hosts about 30 percent of the world’s total mineral reserves and an even higher portion of the global deposits of diamonds, vanadium, manganese, platinum, cobalt and gold; yet the continent is unable to meet basic needs of its people such as clean water and uninterrupted electricity supply. (Image: AMI)

Poverty amid plenty appears to be an abiding curse of Africa as the quality of life of citizens in sub-Saharan Africa ranks among the lowest in the world, even though the continent abounds in mineral reserves and precious ores.

A statement released at the launch of the fifth annual meeting of the African Mining Indaba (AMI) in Cape Town yesterday noted that Africa hosts about 30 percent of the world’s total mineral reserves and an even higher portion of the global deposits of diamonds, vanadium, manganese, platinum, cobalt and gold.

Yet, the continent is unable to meet basic needs of its people such as clean water and uninterrupted electricity supply.

The AMI observed that most communities involved in exploration have poor access to running water and electricity, community roads are neglected, and health and education infrastructure are inadequate for primary care and schooling.

AMI serves as a forum for community and labour representatives from regions around the globe that undertake mining activities.

Godfrey Kanyenze, the director of the Labour and Economic Development Research Institute of Zimbabwe, gave an opening address on fears that Africa will not be lifted out of poverty but suffer from exploitation instead.

He observed that the continent must be cautious and ensure that foreign investors do not take advantage of locals.

Kanyenze noted that countries with the richest mineral resources, such as Angola, Botswana and South Africa, report the highest levels of inequality in the world.

He said that in many resource-rich countries the higher export prices often only benefited foreign-owned oil and mining companies and small economic and political elites, which further benefited at the expense of the public.

Kanyenze said that while there was much talk of foreign direct investment (FDI) flows into Africa, most of this had focused on a limited number of countries and on natural resources. He noted that Africa’s share of global FDI had in fact declined since 1970.

Meanwhile, in his keynote address at the African Mining Indaba, African economy scholar Sir Paul Collier strongly advised sector businesses to consider how mining can contribute to sustainably developing emerging economies, while still ensuring returns on investment.

A director at the Centre for the Study of African Economies at The University of Oxford, Collier said that mining companies are businesses and businesses need to fundamentally make money, but there has to be some larger sense of purpose. Good management in all companies lies in investing in a good sense of purpose and mission.

Addressing the Investing in African Mining Indaba in Cape Town on 4 February, Tom Butler, global head of mining at the World Bank/International Finance Corporation (IFC), said that shared infrastructure, local procurement and power solutions are at the heart of the next step in Africa’s development.

Butler spoke of the World Bank Group’s vision of ways in which the significant economic contribution of the mining industry to development in Africa can be enhanced through public private partnerships (PPPs) in mineral geodata, infrastructure and local procurement.

The IFC’s investment in mining in Africa increased 5% in 2012 while in 2013 the World Bank approved $8.2-billion for notified government projects on the continent, of which $1.2-billion went to the energy and mining sectors.

Submit a Comment

Directory powered by Business Directory Plugin