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Defying the Garden of Eden Syndrome

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ACCRA – When you fly into Takoradi, Ghana’s fourth largest city and an industrial and commercial center, one of the first things you notice are the oil rigs along the coast. It is a panorama that is increasingly characteristic of modern-day Africa.

Nearby, in the city of Elmina, one can see the scars of the past. An eerie feeling clings to you even after you finish the tour of the dungeons of the notorious Elmina Castle , the nerve center of the former West African slave trade.

In Ghana last month, I met ministers who shared with me impressive figures on how much progress the country has made in achieving the Millennium Development Goals (MDGs). Some traditional leaders, academics, representatives of civil-society groups, and students, on the other hand, were more worried about whether the country’s new oil wealth would benefit ordinary people.

Is oil a blessing or a curse? Will oil and other natural resources force Ghana , ranked among the leading producers of cocoa, coffee, and oil palm, to turn its back on agriculture? Will oil wealth create a kleptocracy on the bones of 30 years of progress in meeting standard criteria of good governance?

Ghanaians are not alone in voicing such concerns. Their compatriots in Sierra Leone also want to know what will happen now that they, too, have won the commodities lottery: last year, the country struck oil and discovered one of the largest iron-ore deposits in the world. It also recently signed new mining concessions for bauxite, in addition to existing concessions for diamonds, titanium, and gold. One of the iron-ore concessions in Sierra Leone is estimated to hold 10.5 billion tons of ore.

Similar stories of mineral abundance have emerged in other African countries in recent years, including in Chad, Guinea, Liberia, Mauritania, and Sudan. And, as the rest of the world grapples with austerity measures, such countries should be considering restoration strategies and ways to permanently wean themselves off foreign aid. In the same way that Ghana was the trailblazer for ending colonial rule, it could also become sub-Saharan Africa ’s next success story in economic terms. But it must be ready to make some tough choices – and study the region’s existing success stories.

On a continent where mineral wealth too often has become a curse, Botswana, under the leadership of President Festus Gontebanye Mogae, has demonstrated how natural resources can promote sustainable development and good governance. Mogae managed to hold down inflation and attract foreign investment in order to diversify Botswana ’s economy and make it less dependent on the extraction of diamonds, while simultaneously ensuring that more of the country’s mineral wealth was processed at home.

Thanks in part to the efforts of celebrities like Bono and Bob Geldof, some African countries were absolved of their long-standing debt a few years ago. The choices that we as Africans make today will determine whether we remain poor, evolve into Dubai-like diversified economies, or follow the successful agriculture-led industrialization model implemented in Malaysia (despite that country’s gas discoveries).

African countries could also choose the Norwegian model, which established the principles that natural wealth belongs to all citizens, including the unborn, and that all mining deals should be completely transparent to the public. Adherence to these principles ensures that private rent-seeking and appropriation of oil profits, a major dimension of the so-called resource curse, is avoided.

At the same time, it is important to prevent mineral wealth from causing unwarranted currency appreciation – the dreaded “Dutch disease.” This would undermine other economic sectors’ competitiveness and stifle export-oriented manufacturing growth, thereby stalling these economies’ structural transformation.

In The Africans: Triple Heritage, the Kenyan-born scholar Ali Mazrui expressed concern about what he perceived to be a Garden of Eden in decay. Speaking of the lost decade of the 1980’s in Africa , Mazrui observed that, despite being endowed with superb climatic conditions, few African countries could feed themselves; likewise, despite being engaged in trade in minerals and cash crops, most countries still wallowed in a state of aid-dependency. Mazrui, forever the optimist, expressed hope that the “human will has the power of restoration.”

We Africans can blame colonialism for most of the problems of the past 350 years, but we will have no one to blame for the decisions that we make in the next 50 years. No one is forcing us to sign the mining and drilling deals today. African leaders should use the Natural Resource Charter, launched in Oslo in 2009, and the Extractive Industries Transparency Initiative as guidelines when undertaking any mining negotiations. We can and must avoid the Garden of Eden Syndrome.

Kandeh K. Yumkella is Director General of the United Nations Industrial Development Organization.

Copyright: Project Syndicate, 2010.

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