The problem in Africa is not shortage of resources but mismanagement of

resources. Discuss

Africa has abundant natural resources for instance the continent has about 30% of the
world’s known mineral deposits, including cobalt, diamonds, uranium and gold as well as
large deposits of oil and natural gas (Nantulya, 2016). However, despite its abundant
resources, Africa has not benefited a lot from its rich resource base as it is still one of the
poorest continents on the planet with nearly 50% of the population living on less than
US$1.25 a day (Van der Ploeg, 2008). This phenomenon of resource abundance but
underdevelopment is described as "resource curse", "Dutch disease" or "paradox of
plenty". This has brought attention and debate among policymakers, international
organisations and academicians where some indicate shortage of resources whilst others
blame mismanagement of the resources. This essay therefore seeks to critically discuss
the supposition that the main problem in Africa is not resource shortage but rather
mismanagement of the abundant resources.

Resources are at all times limited even for developed countries but in Africa the problem
is not in resource scarcity per se but the problem lies in the poor management of the
resources (Nantulya, 2016). Africa a continent with huge natural and human resources
remains underdevelopment and this has been attributed to the poor management of
available resources due to corruption and lack of a sound legislative framework. Hence,
resource mismanagement has been attributed to resource mismanagement rather than
resource scarcity and this has been a problem in many resource-rich countries in Africa.
According to the United Nations Economic Commission for Africa (UNECA) (2018)
report, the African continent faces various challenges, including the mismanagement of
its resources by the governments. According to the report, since the 1980s, some
countries in Africa have encountered development difficulties and their economic growth
rates are much lower than those of resource-poor countries such as Singapore, Japan,
Hong Kong and South Korea (UNECA, 2018). This has been attributed to poor
management of the resources due to corruption and lack of accountability leading to the

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general conclusion that the developmental challenges of Africa are to a large extent as a
result of resource mismanagement rather that resource scarcity.

Aluu (2019) pointed out that the African continent is one of the continents with the
richest deposits of natural resources that could have made the continent to be listed as the
most developed continent on the world map, but because of these resource
mismanagement, not many countries have not been successful due to lack of
transparency, lack of accountability and lack of prudent use of the resources. According
to Aluu (2019), this has not only stagnated development, but also caused such severe
poverty and socio-economic exclusion, which sparked debates about resource shortages
or poor resource management. However, according to the UNECA (2018) report, many
African countries lack sufficient capacity to manage the exploitation of resources that
accompany their growth. Therefore, from this it can be deduced that the problem of
underdevelopment in Africa is not about shortage but poor management of resources.

If properly managed, Africa’s rich natural resources can promote development. However,
experience shows that resource exploitation or poor management has not automatically
translated resource extraction into meaningful development (Hanson, 2017). Across the
continent, the exploitation and role of renewable (water, forests, land) and non-renewable
natural resources such as gas, minerals and oil has unfortunately been central to the
social, geopolitical, and armed struggles among the resource-rich African countries
(Hanson, 2017). Hence, the terms resource curse, paradox of plenty and Dutch disease
have manifested due to mismanagement of the available natural resources. According to
Ochola et al. (2019), African countries with natural gas, oil and minerals are facing huge
policy challenges, partly due to weak national administration, lack of laws and
regulations, inappropriate policies and poor governance.

As a result, the abuse or improper management of resources has become more and more
serious for instance Kalu (2016) believes that Africa’s underdevelopment is not due to
resource scarcity but the influence of the actions, behaviours and decisions of influential
African leaders and their allies, resulting in poor resource management. Kalu (2016)
accused the actions and decisions of these African leaders and their cronies for poorly

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managing available natural resources and described them as "looting machines" and
"thieves of Africa’s wealth". This confirms that, the central issue for Africa is not about
resource scarcity by resource mismanagement.

However, although resource mismanagement carries all the blame, the continent faces
shortage of experienced human resources. According to Ochola et al. (2010), given the
30% of the world’s known mineral resources and a growing population, Africa’s
continuous importation of expertise in natural resource management is surprising. Studies
have shown that poor resource management in Africa is also the result of human capital
in natural resource management. For example, Nguegan (2017) pointed out that the lack
of skilled human capital for effective management and development of natural resources
has aggravated the long-term mismanagement of natural resources in Africa, leading to
the underdevelopment of the resource-rich continent in Africa.

Nguegan (2017) further pointed out that the resource paradox of the African continent
essentially lies in the lack of qualified human capital and reliance on foreign expertise.
African resource-rich countries tend to lack specialized training institutions from where
local expertise can emerge and also incentives for human capital investments appear to be
low resulting in the continent suffering lack of human capital. However, human capital
seems to be as important as natural resources for the economic growth of African
countries. It can therefore be established that the problem of underdevelopment in Africa
can also be attributed to shortage of critical human resources in natural resource
management where scholars such as Nguegan (2017) documents that crowding-out effect
of natural resources on human capital exists most parts of Africa.

Apart from natural and human resources, the continent’s underdevelopment has also been
linked to lack financial resources to promote and fund developmental projects. According
to previous researches, despite being a resource abundant region, Africa still faces the
daunting task of mobilizing sufficient financial resources to fund development projects.
However, although this has been rectified through donor aid, mismanagement of these
financial resources has also been on a rise in most African countries. According to
UNECA (2018), Africa receives approximately US$133.7 billion from grants, official aid

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and remittances each year, but most of these funds are lost due to corruption and illegal
capital outflows, which seem to exhaust Africa’s domestic resources and make Africa
unable to achieve sustainable development. Therefore, in terms of financial resources,
both lack of the resources as well as misuse of the resources pose a challenge to the
natural resource abundant African continent.

Furthermore, lack of technical resources such modern technology has also been linked to
the developmental problems facing the resource-rich continent. According to the report
by the African Development Bank (AfDB) (2015), poor technological capability is still
one of the main obstacles to Africa's efforts to achieve sustainable development. Fabayo
(2010) states that is a key resource for economic development and growth however, there
is high technological dependence on developed countries by Africa. It has been pointed
out that technological resources improves the efficiency of resource utilization, stimulate
the creation and expansion of resources such as physical capital and diminishes the
importance of natural factor endowment in economic development (Fabayo, 2010).
However, this critical resource lacks in most African countries therefore affecting
development of natural resource rich continent. Therefore it is the argument of the study
by Fabayo (2010) that African countries' dependence on technology importation has
contributed in a rather cumulative manner to the underdevelopment or distorted
development of the African economy. Basing on this, it has been noted that the problem
in Africa is not only due to mismanagement of resources such as natural and financial
resources but also lack of technical resources.

In conclusion, the aforementioned discussion has clearly indicated that the problem in
Africa is not about shortage of resources but mismanagement of the available resources.
The abundance of resources but lack of development due to resource mismanagement has
been referred to as the resource curse, paradox of plenty or the Dutch disease. It has been
learnt that the continent is a resource rich region with so many renewable and non-
renewable resources however, there is mismanagement or misuse of the resources hence
compromising the growth potential of the region. From the discussion it can therefore be
concluded that although most of the blame for the continent has been pointed to resource
mismanagement, lack of resources such as human and financial resources also are to be

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blamed though to a lesser extent. From, this discussion, it can be concluded that there is
no “silver bullet” that enables countries in Africa to avoid the resource curse and
maximize the efficient use of natural resources for development but there are general
steps countries can take to alleviate this curse. While acknowledging that there is no
shortage of natural resources but shortage of other resources such as human and financial
resources, this essay also submits that the often “one size fits all” solution that usually
uses “best practice” methods should be reconsidered. Instead, a good-fit methods of
acknowledging a country’s political and economic background should be adopted. This
will require an assessment of the political, economic, social and institutional environment
of each country, including the types of available natural resources and their spatial
distribution, political, economic and institutional capacities and different stakeholders
involved in resource extraction to achieve effective resource management.

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References

AfDB (2015). Poor technological capability undermining Africa’s growth potential.

AfDB.

Aluu, V. (2019). Natural Resource Governance in Africa. Available at SSRN 3489717.

Fabayo, J. A. (2010). Technological dependence in Africa: its nature, causes,

consequences and policy derivatives. Technovation, 16(7), 357-370.

Hanson, K. T. (2017). Managing Africa’s natural resource endowments: new

dispensations and good-fit approaches. Journal of Sustainable Development Law
and Policy (The), 8(1), 121-144.

Kalu, N. E. (2016). The Looting Machine: Warlords, Oligarchs, Corporations,

Smugglers, and the Theft of Africa's Wealth, Tom Burgis (Ed.): book
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Nantulya, P. (2016). Resource Mismanagement a Threat to Security in Africa. Africa

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Ochola, W. O., Sanginga, P. C., & Bekalo, I. (Eds.). (2010). Managing natural resources
for development in Africa: A resource book. IDRC.

UNECA (2018). Mismanagement of Africa's natural resources. Accessed at:

www.africanews.com.

Van der Ploeg, F. (2008). Africa and natural resources: managing natural resources for
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