Browsing: Solid Mineral

African economic outlook 2013: Natural resources can fuel Africa’s economic transformation

Solid Mineral

MARRAKESH, Morocco, May 27, 2013/African Press Organization (APO)/ — Africa’s agricultural, mining and energy resources could boost the continent’s economic growth and pave the way for a breakthrough in human development, according to the African Economic Outlook 2013 (http://www.africaneconomicoutlook.org), released here Monday.

The report is produced annually by the African Development Bank (AfDB) (http://www.afdb.org), the OECD Development Centre, the Economic Commission for Africa (ECA) and the UN Development Programme (UNDP).

The continent’s economic outlook for 2013 and 2014 is promising, confirming its healthy resilience to internal and external shocks and its role as a growth pole in an ailing global economy. Africa’s economy is projected to grow by 4.8% in 2013 and accelerate further to 5.3% in 2014.

The report shows this growth has been accompanied by insufficient poverty reduction, persisting unemployment, increased income inequalities and in some countries, deteriorating levels of health and education.

“Now is the time to step up the tempo of economic transformation, so that African economies become more competitive and create more gainful jobs”, say the authors of the report, adding that “widening the sources of economic activity is fundamental to meeting this challenge.”

The report argues that African countries must tap into their natural resource wealth to accelerate the pace of growth and ensure the process can benefit ordinary Africans.

“Growth is not enough”, said Mario Pezzini, Director at the OECD Development Centre. “African countries must provide the right conditions for turning natural resources into jobs, optimise their resource revenues through smart taxation and help investors and locals to make the most of linkages.”

According to the report, four key elements are needed to achieve that objective. Firstly, African countries should create the right conditions for such a transformation to take place, including infrastructure, education and the creation of larger and more competitive markets.

“Access to markets is fundamental to structural transformation based on natural resources: regional integration and better access to the markets of large partners could open new opportunities for all”, said Emmanuel Nnadozie, Director, Macroeconomic Policy Division at ECA.

In the second instance, the primary sectors require sound land management, balanced and effective tax systems and the right mechanisms and incentives to cause an acceleration and diversification of the sources of growth.

In the agricultural sector for instance, transport, fertilizers and more resistant seeds are required for an increase in productivity. Africa has 24 per cent of the world’s agricultural land, but accounts for only 9 per cent of its production.

Thirdly, governments and investors must ensure that a fair share of the proceeds from natural resources and extractive industries accrue to society: for example, they should be invested in people’s capacities to take up new jobs in promising sectors.

Finally, the report suggests that African countries can foster change and economic diversification actively, for example through corridors of development around power, transport and communication lines. Stable and transparent use of budgets is key to achieving that goal.

“Now is the time”, said Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank (AfDB), “After ten years of improved stability, sound macroeconomic policies and blossoming trade links, growth has made African nations freer than ever to choose their own development paths and implement active policies for economic transformation.”

Ultimately, transformation means opening opportunities so people can find jobs, create businesses, as well as invest in health, education and food security. In turn, higher levels of human development for all, including the most vulnerable, can accelerate the pace of economic transformation, leading to a virtuous cycle of growth and development.

“Among many other benefits, human development can help drive Africa’s structural transformation by speeding both the rate of innovation and uptake of new technologies,” said Pedro Conceição, Chief Economist at UNDP’s Regional Bureau for Africa. “But for this to happen, more attention should be paid to improving access to and quality of education and healthcare systems, transforming agriculture and fostering job creation in order to narrow income inequalities.”

Distributed by the African Press Organization on behalf of the African Development Bank (AfDB).

Information about the report: The annual African Economic Outlook covers economic, social and political development in 53 of the continent’s 54 countries. It is published with financial support from the European Union and the Committee of African, Caribbean and Pacific Group of States (ACP).

For the whole report, including statistics and specific country performance, please visit http://www.africaneconomicoutlook.org

Press Contacts:

African Development Bank: Olivia Ndong Obiang, [email protected] M: +216 959 99 770 (Tunis)

OECD Development Centre: Margo Cointreau, [email protected] T: +33 (0) 6 01 48 42 89 (Paris)

UNDP: Romain Desclous, [email protected] T: +1 646 255 5690 (New York)

UNECA: Yinka Adeyemi, [email protected] T: +251 11 544 3537 (Addis Ababa)

Africa can adhere to responsible, AMV-compliant mining practices

Other News

CAPE-TOWN, South-Africa, May 13, 2013/African Press Organization (APO)/ — Key players in the mining sector attending an industry partnership meetingfor Mining and Metals session organized by the World Economic Forum and the Economic Commission for Africa (ECA) have underscored that the window of opportunity provided by rising commodity prices must correspond to a rise in revenues for African governments by equal measure. Held on 8 May, the session was aimed at examining how the Africa Mining Vision and its goal of facilitating transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic developmentcan be translated into national mining visions, developed from a fully transparent and inclusive process

While the index price of precious metals and base mineralshas increased by over 200% in the last decade, industry leaders and policy makers here agree that the current contribution of minerals to Africa’s economic development is not commensurate.Stressing the need forbeneficiation andvalue addition and linkages in the mineral value chain, ECA’s Executive Secretary, Carlos Lopes says, “minerals have to contribute to structural transformation – we have to see a strongermanufacturing sector in Africa going forward.”

According to industry experts, Canada, Australia and Chile have used the minerals sector for industrial transformation and the composition of their GDP has seen a growth in the contribution of manufacturing. “Commodities have not been a curse but rather a blessing for these countries – the diversified and rich mineral resource base can do the same for Africa,” notes Lopes.

A continental approach that steers the course of Africa’s minerals towards a path that derives development benefits is already in place. “The tripartite partnership of the African Union, African Development Bank, and the ECA is establishing the African Minerals Development Centre (AMDC) to help AU member states achieve broad-based social and economic development based on Africa’s mineral endowment as stipulated in the Africa Mining Vision,”say Senior officials at the ECA. The Centre aims to create the institutional and policy space for broad social and economic linkages and thusfacilitate a mineral-led industrialization process.

As underscored by participants here,the risks are changing in Africa due to increased macroeconomic and political stability in most countries and this offers opportunities for investing in the continent’s highly prospective geology. However, countries need to improvegovernance and capacity to negotiate contracts and to audit the mineral value chain.There is a need for amore sophisticated regulatory environment, clarity of policy, as well as consistency and transparency in the overall policy framework.

There is also concerted agreement among stakeholders on the need to domesticate the Africa Mining Vision. “It is the only way country-specific issues, such as inclusiveness and linking mining to the rest of the economy can be captured and addressed,” stress the experts. In this regard, piloting of the country Mining Visions in a few countries will provide important lessons for the rest of the continent in the rollout of the development of AMV-compliant policies.

Participants discussed the mineral value management tooldeveloped by the World Economic Forum, which could be utilizedin the process of developing country mining visions, as it facilitates the capturingand alignment of the often divergent views of all stakeholders on the value of the minerals sector.The toolcouldhelpto align the value perceptions of communities, the private sector and governments.

In addition, there is room to address capacity gaps at country-level, and within governments, according to experts. “Instead of having agreements on a project by project basis, in one country, a generalized template that specifies all the key parameters can be developed and then customized,” they stress.

“Mining development agreements can become a law in themselves and governments often lack capacity to monitor implementation of these complex agreements,” argue the experts, who stress that a robust legal and regulatory framework ormodel mining policy or agreement will suffice. The call here this week to governments is “legislate, do not negotiate.”