Africa: Dealing With Africa’s Resource Curse

Africa is a vast and exotic continent of about 900 million people in 54 independent countries. It has a total area of over 30 million square kilometres. Africa is rich in mineral and natural resources.

It possesses 99 percent of the world’s chrome resources, 85 percent of its platinum, 70 percent of its tantalite, 68 percent of its cobalt, and 54 percent of its gold, among others. It has significant oil and gas reserves. Nigeria and Libya are two of the leading oil producing countries in the world.
Further, Africa is the home to timber, diamonds, and bauxite deposits. Revenues from their extraction should provide funds for badly needed development, but instead have fuelled state corruption, environmental degradation, poverty, and violence. Rather than being a blessing, Africa’s natural resources have largely been a curse.

Africa’s vast mineral wealth and strategic significance have encouraged foreign powers to intervene in African affairs. During the Cold War era, 1945-1990, there was increasing superpower intervention in Africa. The United States and the Soviet Union were major players on the African scene.

The 19th-Century scramble for Africa saw the great powers rush to control land so they could exploit natural resources. The key question for many is: will the exploitation of Africa’s rich resources benefit anyone other than the continent’s elites?

Oil is perhaps the most important lure, with competition between foreign states and companies to secure resources so intense it attracts more than 50 per cent of all foreign direct investment. In 2006, annual Foreign Direct Investment (FDI) raised to a historic high of $38.8 billion, exceeding record levels of 2005 — a growth of 78 per cent from 2004.

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