Africa struggles to turn natural resource exports into lasting wealth because it fails to manage the revenues openly enough, World Bank experts said on Monday.
”We don’t know how governments and the elites receive their money,” World Bank petroleum economist Eleodoro Mayorga Alba told a seminar on managing extractive industries in Africa.
”There is a rapid growth in oil, gas and mining production and revenues but there is also a general failure to transform resource wealth into sustainable development,” Peter Van der Veen, manager of the bank’s oil, gas and mining policy division said.
African energy output accounts for 12% of world production while its share of global oil and gas consumption is 3,4% and 2% respectively, experts say.
The world’s poorest continent owns 9,5% of global crude oil reserves and 8% of gas reserves and exports more than 70% of its oil and gas production.
But lack of efficient oil revenue management stymied development, the experts said.
More than 40% of Africans live on less than $1 a day, more than 200-million are threatened by serious food shortages and Aids kills more than 2-million a year.
”In order to take advantages from oil and mining revenues, African countries must set up mechanisms by which they become able to use rationally the revenues,” Gotthard Walser, senior mining specialist said.
”We have to know who pays who and how much he paid him to avoid the secret agreements and non-transparent ones,” he added.
Van der Veen said increasing transparency and bolstering the accountability of companies working in the extractive industries would help African turn resource wealth into sustainable growth that could alleviate poverty.
”The first thing to do is to create the adequate conditions of investment using a transparent process to ensure that the revenue will enter into the public treasury. There is a lack of transparency,” Mayorga Alba said.
In 2002 Britain launched the Extractive Industries Transparency Initiative and urged poor countries to sign up to it as a way of tackling corruption.
Under the initiative, signatory countries agree to improve the quality and transparency of data about revenues from oil, gas and mining. Twenty countries around the world have either endorsed or are actively implementing its recommendations.
But anti-poverty campaigners say many governments remain reluctant to publish verified details of transactions between themselves and foreign firms because they wish to exert maximum control over windfall revenues at a time of high oil prices. – Reuters