Why communities are key in countering Africa’s resource curse

The wealth associated with Africa’s natural resources is substantial and, if well managed, is enough to reduce poverty on the continent. Yet despite Africa’s increasing economic growth, its poverty levels remain high.

Recent research by the Institute for Security Studies (ISS) indicates that while eradicating extreme poverty remains a priority of the Post-2015 Millennium Development Goals and the African Union’s Agenda 2063, this target is unlikely to be met in the next decade and a half. These predictions might seem to counter the ‘Africa Rising’ narrative, but they support the argument for better-implemented pro-poor policies through government reform. In the extractive industry, this points to the need for more inclusive, transparent and accountable governance.

In East Africa, extractive resources include oil, gas, tanzanite, gold, copper, uranium, titanium and nickel. There are several ongoing infrastructure projects that strategically facilitate the exploitation of natural resources in the region. These include the Mwambani Port and Railway Corridor, the Lamu Port and Southern Sudan-Ethiopia Transport Corridor, the Kenya-Uganda Railway and the Tanzania-Zambia Railway.

Despite these projects and the abundance of resources, many local communities continue to face extreme poverty. A combination of infrastructural development and sustainable extraction of resources can contribute to improving living standards. This is hampered, however, by the disconnect between various actors in the extractive industry, namely government, civil society and the private sector.

Kenya, specifically, has a history of excluding its rural population from economic development, making it one of the most economically unequal countries in East Africa. The country lacks the relevant legislation, for example, to ensure that local communities are active beneficiaries of mining activities, because extractives were not considered commercially viable in the past. Now, 50 years after independence, the country still relies on the 1940 Mining Act.

Parliament recently passed a new mining bill, which is yet to be put into law. The new bill is faulted, however, for giving the cabinet secretary in the Ministry of Mining excessive decision-making powers at the expense of others, especially local communities. If passed into law, this legislation could lead to communities being further excluded from decision-making processes that typically take place behind closed doors.

Recent events highlight challenges to ensuring an open and inclusive extractives industry. In August 2013, Kenya’s cabinet secretary in the Ministry of Mining, Najib Balala, revoked mining licences of over 40 companies and suspended the commissioner of mines on claims that the licences were acquired illegally. Cortec – a subsidiary of the Canadian Pacific Wildcat Resources Corporation, which has interest in niobium and other rare resources in Mrima Hill, Kwale County – took Balala to court, arguing they had complied with all requirements before acquiring a special mining licence.

The Mrima mineral deposit is considered the sixth largest in the world, and it includes Mrima Hill, a protected religious Kaya site and national monument. This makes the issuing of a mining licence for a protected area highly suspicious. The impact of mining on the land and cultural interests of the local community appears not to have been considered: it is unclear if the required environmental impact assessment was done, and whether the beneficiation and sustainability of the project had even been considered.

As in most of rural Kenya, Kwale faces numerous underlying socio-economic challenges including historical land injustices, and high levels of poverty and youth unemployment. This contributes to increased levels of radicalisation and violent extremism, and the rise of the secessionist movement, the Mombasa Republican Council. The risk of conflict in Kwale will remain very high unless precautionary measures and deliberate pro-poor initiatives are included in policies regulating the extraction of natural resources.

These challenges are not unique to Kenya. Meaningful engagement and decision-making regarding the exploration and mining process remains limited on the continent. Managing the interests of local communities and resource-rich countries, while at the same time maintaining investor confidence, is therefore a careful balancing act.

With new natural resources still being discovered across Africa, coordination among stakeholders is critical and requires effective legislation. There are various regional and global initiatives aimed at promoting sustainable mining activities, such as the Africa Mining Vision, Extractive Industries Transparency Initiative, and Publish What you Pay. These initiatives foresee inclusivity in the governance and management of extractives, even though they currently lack enforcement powers.

Interests of local communities in resource-rich areas must become a top priority, since these communities are the true custodians of the resources. Only when measures are taken in this regard can Africa’s resource curse be countered.

This article is published in collaboration with ISS. Publication does not imply endorsement of views by the World Economic Forum.

To keep up with Forum:Agenda subscribe to our weekly newsletter.

Author: Hawa Noor is a Junior Researcher for the Governance, Crime and Justice Division at ISS Nairobi.

Image: A woman carrying her baby walks past fallen trees in Tanna. REUTERS/Edgar Su.