The Curse of African Resource Abundance

Although much of the African continent possesses a myriad of natural resources, modest economic growth has come largely absent development. Much of the African continent experiences conditions of abject poverty, and in some countries poverty has increased in recent decades. Africa is experiencing the effects of a “resource curse”, where resource extraction actually contributes to conditions of poverty and stagnated development. In part the result of a “Dutch disease”, growth inhibited by resource extraction is multifaceted, involving government failures, unfair or opaque contracts by firms, and missed opportunities for sustainable reinvestment. Despite the challenges associated with contractual renegotiations and improving institutional competency, natural resource abundance in many African countries presents opportunities to pair economic growth with sustainable development.

Written by Jon Milani. Posted on July 25, 2013. Filed under Economics. Tagged: , , , , , , , .