 | Participants at opening ceremony |
Current world market prices for raw materials arguably represent the greatest opportunity to develop Africa since independence - and possibly one of the best for several decades to come. Governments, extractive industries (EI) firms, civil society, and donors therefore ought to undertake a concerted effort to ensure this opportunity is seized. Given this, the World Bank, together with the AfDB, the IMF and UNDP, organized a four day event in Libreville / Gabon to have the above-mentioned stakeholders talk about how Africa can make the most of the commodities boom. The seminar went beyond expert presentations into allowing for exchange of experiences, notably through the presence of representatives from 13 West- and Central African countries, namely from Algeria, Angola, Burundi, the Central African Republic, Cameroon, Equatorial Guinea, the Democratic Republic of Congo, Gabon, Ghana, Mauritania, Nigeria, the Republic of Congo; and Sao Tome and Principe. Central to the discussion was the idea that countries may reap the benefits from extractive industries during various stages of the ‘resource extraction value chain’, that is, the process during which extractive industry products are transformed into value for the country and companies involved. Roughly, in the first stage of contracting the relevant EI firms, governments’ negotiation capacities in relation to large international EI firms have to be strengthened; subsequently, once the EI firms is extracting the resources, better monitoring may ensure extraction and corresponding payments are in line with what had previously been negotiated, while local environmental and social impact laws are adhered to. Next, measures such as implementation of the Extractive Industries Transparency Initiative (EITI) may ensure transparency of the revenue flows resulting from the extraction. Finally, sound investment decisions ensure that the income from resource extraction maximizes the developmental prospects for the country. "We at the World Bank believe that the curse of oil is not inevitable and expect that these resources can serve as a lever to ensure a sustained and equitable development in developing countries that possess these resources in abundance. And we want to work in partnership with our member countries to make this belief a reality. The opportunity offered to us is limited in time and is perhaps the last for Africans to use their natural resources to reduce poverty," said Olivier Frémond.  | Samba Thiam, IMF |
Three overarching themes of the seminar were, first, Good Governance (that is., the sound making and implementation of decisions, at governmental and corporate level, relating to resource extraction and corresponding revenue use). One example discussed in depth was audits of EITI firms and the use of the results of these audits by the government. Second, Capacity Building was key in the discussions, with a focus on the government – for example, on the above-mentioned negotiation with firms, and monitoring of firms’ actions. Participants also discussed what technical issues were most important to be mastered by the government, and the importance of the government’s ability to implement the most suitable legal frameworks. The seminar went beyond mere ‘teaching’ in this regard, notably through asking the participants to simulate a complex oil contract negotiation between government and firms. In the margins of the seminar, participants discussed further important capacity building, including for firms (e.g. on firms’ non-core activities with high significance for society, e.g. mitigation of environmental impacts; or EI payment reporting for the EITI).  | Participants practice contract negotiation |
"There is a great imbalance between the technical and human resources between the petroleum companies and those countries," said Bassary Toure, AfDB. Third, the discussion on Economic Management focused on how to avoid economic drawbacks from the resource boom and commodity price volatilities for example, through budget restraint or targeted investment policies. The World Bank also shared experiences with commodity savings funds. Gabon State Minister, Paul Toungui, raised the problematic aspects, “The rising cost of petroleum in the global market brings with it for Africa more revenue, but they also pose the question of the effects of these revenues. Is it preferable to use these resources toward addressing the numerous challenges that these countries face especially the 2015 MDGs or better to save a share for future generations?” Looking forward, many of the issues raised during the seminar will form part of the EITI++ initiative, which aims to help resource-rich countries with a broad range of measures for effective resource governance. After all, the resource curse is perfectly avoidable – instead, with the right management, the current resource price boom can lead to sustainable and equitable development even for many of the poorest African countries.
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