'African leaders must ensure their countries benefit from natural wealth'

Addis Ababa, Ethiopia (PANA) - African leaders must be held accountable to make sure the continent benefits from natural resources currently being exploited by foreign conglomerates, a senior official of the UN Economic Commission for Africa (ECA) said here Friday.

Adam Elhiraika, chief of the Macro Economic Analysis Section of the ECA, said:  “Big companies from industrialised countries are extracting mineral resources from Africa but their activities don’t have any linkage to domestic economies.”

Elhiraika told journalists at the regional launch of the 2013 World Economic Situation and Prospects (WESP) report that African countries cannot rely either on UN agencies or any other outsiders to ensure that benefits accrued from their mineral and other natural resources are reflected in improved living standards of their people.

The official called on African governments to stop the production and exportation of raw commodities at low prices.

“We tell them to process the raw materials because in that way we can diversify African economies, create more jobs for Africans and increase intra-regional trade that would eventually reduce the continent’s vulnerability to external shocks,” said Elhiraika.

According to WESP, Africa will defy the global economic slowdown in 2013, with most countries predicted to post much stronger growth than the global average.

“Despite the global slowdown, Africa’s economic growth rate (excluding Libya) will see a visible rebound to 4.5 percent in 2013 compared to 3.4 percent in 2012. The upward trend is expected to continue in 2014, with growth reaching 5.0 percent,” said the annual report jointly produced by the UN Department of Economic and Social Affairs, the UN Conference for Trade and Development (UNCTAD) and the five UN regional commissions.

WESP said Africa’s increasing trade and investment ties with emerging and developing economies were likely to mitigate the impact of negative shocks emanating from the recession in Europe.

Increasing diversification into services, telecommunication, construction and other non-primary commodity sectors, including manufacturing, also contribute to Africa’s positive growth outlook in the medium term.

The report pointed out that recent oil discovery in some African countries, if well-managed, could present unique opportunities for accelerated growth and development.

Though oil exporting countries tended to fare better in terms of average income growth than non-oil exporters, the report noted that the relatively high overall growth of oil exporters has not delivered the expected benefits.

‘The enormous revenues from oil have not measurably boosted per capita incomes in many countries,” said the report, citing as example Nigeria, which exported US$700 billion in oil between 1980 and 2010 - and yet the country’s per capita income was barely above the average for Africa.

Despite having one of the highest GDP per capita in Africa, Equatorial Guinea is still ranked 136 in the UN Human Development Index, whereas Kenya, with a per capita income less than one-tenth that of Equatorial Guinea, is ranked 143.

“This points to either severe mismanagement of the revenue or significant concentration of the oil wealth,” the report said.

In 2012, Kenya became the latest frontier for new oil discoveries in Africa, following previously announced discoveries in Ghana, Sierra Leone and Uganda.
-0- PANA AR/SEG 25Jan2013

25 january 2013 11:26:58




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