africa

Yale Center for the Study of Globalization
experts from various countries were brought to share their experiences, and Nigeria
could say: “you should not repeat our mistakes.” Experts from Kazakhstan, Norway,
multilateral institutions, and development partners from everywhere discussed the
issues of the resource curse and how Ghana could turn the prospective revenues
from oil, the newfound wealth, into a blessing.
All of that helped to create a framework within which the resources could be managed
and reforms implemented. In 2011 Ghana put in place the landmark Petroleum
Revenue Management Act, which embodies international best practice of fiscal
transparency and accountability, and mechanisms to track the inflow, allocation,
and use of resources, with separate funds for stabilization and future generations.
The Act has imposed a discipline to bind fiscal policy, and should be working.
Ghana is not alone in learning from past experiences. Many resource-rich African
countries have committed to the principles advocated by Extractive Industry Transparency
International (EITI) and are EITI-compliant; they are increasingly open to
independent and public scrutiny in the management of their resource wealth. Such
openness could reduce the scope for inefficiency, rent seeking, and misallocation
of resources and so protect the public interest. Guinea’s bold stance on restoring
transparency and fairness in the awards of contracts and development of its huge
iron ore reserves—at the landmark Rio Tinto USD 20 billion Simandou mine project—is
a striking example.
Finally, over the last two decades the democratization movement has swept through
Africa. The essence of it has been a momentum toward the practice of good governance,
accountable government, and transparency—some of the hallmarks of
economic success. Not surprisingly, the thread of democracy runs through much
of today’s discussions on Africa.
Arguably, there is a change from the old normal in which Africa was caught for
decades in slow growth, excessive public debt, and rising poverty, when it was
renowned for weak economic management and critically dependent on donor and
multilateral financial aid and charity, with most of the resource-rich countries among
the poorly performing economies and disappointingly in the grip of a resource curse.
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