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African mineral wealth: turning stones into bread…

10-02-2012

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Which policy maker, in particular at the time when many developed countries are struggling with budgetary constraints and have little left for development support, would not agree that it has become imperative to transform the rich African mineral resources into long-term sustainable development? African leaders have placed the bet to attain this objective by 2050. Traditional development partners got the message and are making efforts to strengthen their partnership with Africa. This is to some extent, in reaction to the increasing role of emerging players in Africa.

The future looks promising

In recent years, the debate about transforming mineral wealth into real development has gained a lot of attention, both in Africa and in Europe. Over the past two months, two high level meetings were held to discuss the issue and to agree on convergent priorities. The theme of the 2nd African Union Ministerial Meeting, held in Addis Ababa last December, was quite revealing: “Building a sustainable future for Africa’s extractive industry – From vision to action”. It set the tone to define an action plan for implementing the African Mining Vision, the cornerstone home-grown strategy adopted by African Union Heads of States back in 2009. Attended by key African mining ministers, with strong support from several development partners, the meeting gave positive political signals regarding the continent’s willingness to turn mineral wealth into development.

One month later, the European Commission and the African Union Commission convened a High Level Meeting on the Africa-EU partnership in Brussels. As one of the pillars of the Joint Africa-EU Strategy, issues raised (i.e good governance, infrastructure and investment and geological surveys and skills) reflected common priorities. The meeting confirmed the commitments of both parties to make the partnership effectively work for African development. But beyond repeating conventional wisdom, it remained short of concrete actions (my colleagues Christiane Loquai and Biniam Bedasso from ECDPM attended the meeting and summarized the main points of discussion in a report).

The gap between rhetoric and practice

But achieving development objectives would require going beyond rhetoric. Given the momentum at the political level, African leaders will have to continue to champion the initiative. Expressing commitments is fine but turning good intentions into real development would require resolving some pressing and concrete challenges as necessary preconditions. This needs to happen at the continental and regional level, but first and foremost at the national level.

Bridging the infrastructure gap is one of those challenges. While all agree on the principle, the gap between the rhetoric and practice remains large. Bridging the gaps and providing the needed infrastructure will require combining forces among donors, finding synergies with China and other emerging players, and most of all, identifying innovative sources of financing. Working with the private sector, in particular with large mining companies, will be important. It will remain the responsibility of beneficiary countries to bring all stakeholders to have a common, transparent and sustainable approach.

Another pressing challenge is the use of minerals to foster African industrialisation .Most industries are currently not engaged into value addition and have few linkages with the rest of the economy, causing the sector to be quite enclaved. But developing an industrial policy might also run the risk of being captured by vested interests at the domestic level as well as conflicting international commercial interests. Policymakers will need to find the right balance to be able to meet the development objectives.

While the recent high-level gatherings addressed serious issues, no one missed the fact that the elephant in the room – the role of “emerging” players – was nicely slipped under the carpet. It was quite surprising to see that high-level meetings on minerals were held without the presence of these players, given their increasing presence in Africa. Of course, the Brussels meeting was about the EU-Africa partnership. But development has no frontiers, and one therefore wonders whether this was due to an unfortunate omission, deliberation eviction, or simply just blindness. Africa does not want to talk about the “C” word (i.e China) with its old European partners especially in the absence of the latter. Good manners some will say. But in any case, not inviting some emerging players to the dinner table is counter-productive. A frank and open dialogue should also address issues of potential disagreement.

The relationship between Europe and Africa remains strong and is here to stay. But it needs to be strengthened on the basis of trust, mutual benefits and on converging priorities, be given stronger teeth to engage in strategic considerations. Otherwise, the partnership will be just box-ticking exercise and Europe will slowly fall off the radar of Africa when commercial interests will be at stake.  Addressing governance issues, infrastructure and investment and geological knowledge is important. But it is only a first step. Implementation of the African Mining Vision and its translation at national levels will require combined efforts between African countries, all its partners and the private sector. ECDPM will continue to promote and facilitate initiatives to this end.

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Isabelle Ramdoo is Policy Officer at ECDPM’s Economic Governance Programme.

 

This blog post features the author’s personal view and does not represent the view of ECDPM.

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Economic Transformation and TradeEmerging Players in AfricaExtractive SectorsAfrica