The other resource curse: extractives as development panacea

Since 2010, many African governments have challenged twenty years of extractive sector liberalization that has played a key role in unlocking mineral riches and attracting foreign direct investment. The potential for extractives to drive economic structural transformation is intuitively attractive, the Africa Mining Vision (2009) document providing a primary template. Geological inheritance alone, however, is not a panacea for economic development, industrialization or poverty alleviation. While much attention to the ‘resource curse’ has identified the problem of excessive rent-seeking and the consequent impact on elite consolidation, democracy, governance and macroeconomic distortions, a more fundamental problem, the ‘other resource curse’, may be an overlooked driver: a lingering assumption that mineral resources should straightforwardly provide significant revenue streams for public goods, inputs for industrial transformation, and extensive employment. Geology alone is neither conducive nor antithetical to economic development. Stakeholders require a more comprehensive understanding of the possibilities and limits of extractives in contemporary Africa.