Turning a curse into a blessing: Lessons for Zimbabwe and African countries

Turning a curse into a blessing: Lessons for Zimbabwe and African countries
Published: 06 December 2017 (459 Views)
The idea that natural resource wealth can support sustainable economic development is widely accepted. Natural resources are, in a way, a stock of natural capital and natural resource availability is seen as a pool of wealth.

The Southern African region has extensive (untapped) natural resources deposits that, if utilised, can promote sustainable economic development. But despite the presence of these natural resources, the Southern African region is poverty stricken and still under-developed.

Although some resource-rich countries such as Botswana have benefited from natural wealth, others such as Zimbabwe and the Democratic Republic of Congo (DRC) are still in a terrible state.

This raises a number of questions: Why is Southern Africa poverty-stricken yet the region is endowed with natural resources?  How can the resource curse be overcome in the coming future? Is the resource curse unavoidable, and what can be done to overcome it?

Exploring these questions makes it necessary to find ways that can ensure that revenue from natural resources is used for the benefit of the general public.

The availability of natural resources has not always brought positives outcomes in several African states. African countries are faced with a huge problem of lacking the capacity to invest in development and growth and in addition to this, the violent conflict caused by the struggle to gain access to natural resources has plagued Countries such as the DRC and South Sudan.

On the hand, the rapid increase in unlawful access to natural resources by the general population has led to serious environmental degradation. Riverbanks have been dug and left in degraded states and in addition to this, there has been pollution in the rivers caused by people who dispose of used illegal mining material in rivers.

This has led to the quality of land and water to become extensively degraded. Moreover, this informal and unregulated mining has created tense competition for natural resources and this has, in turn, caused increased enmity and ultimately conflict, hunger, poverty and war.

Natural resources have helped fund war and this has destroyed the lives of millions of citizens. Natural resources have been sold, by rebels, in order to finance armed conflict. This unlawful exchange of natural resources has fuelled violent conflict and war in the DRC and this has also resulted in huge loss of lives.

However, it must be noted that, when used productively, proceeds from natural resources can be an essential catalyst for sustainable economic development. Revenue from natural resources can be used to create a base from which economic growth can take off. However, without proper economic and economic governance, there can never be any development.

In this regard, it is important to stress that governance is in short supply in African countries. This has caused African states such as the DRC, Zimbabwe and South Sudan gaining little from their natural resources. "When governance is poor, resources can be a development 'curse'. Unable to control corruption and manage revenues wisely, the government is unable to capture the benefits. Without the rule of law, the government is unable to implement legal, regulatory, and policy solutions that would allow it to control the costs and risks."  

Looking into the future

From the look of things, the future looks bleak for some African countries such as the Zimbabwe and the DRC hence there is a need for urgent implementation of sound resource management policies.

Sound management of natural resources creates public benefits and this, in turn, promotes economic growth and sustainable development. This will turn the resource curse into a blessing African countries. Measures which can solve it include:

(i)    Investing revenue from natural resources.

(ii)    Using natural resource wealth to improve infrastructure.

(iii)    Increased security on mining investment – there is a need for security on mining investment. Lack of security hampers investors.

(iv)    There is a need for the enacting of well-developed property rights. Natural resources have underproduced because of lack of effective property rights hence there is a need for well-developed property rights.

(v)    Transparent and accountable governance

When these measures are put into practice a positive change in the performance of African states can be realised. Natural resource extraction can only become beneficial if correct policies are pursued.

- Courage Mlambo, PhD (Economics)

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