Africa hampering sustainable development due to over-reliance on extractive
Economic history has shown that, without diversification into manufacturing and
services and away from simple resource extraction, the long-term development
prospects of countries are always bleak. The need for economic diversification in
Africa is high, more so given that the growth cycle is at a low point.
This is according to multinational professional services provider Deloitte Africa
emerging markets and Africa MD Dr Martyn Davies.
He says that, for the most part, African governments have not taken advantage of the
last decadeâ€™s growth spurt to move toward diversification, neither in their economic
structures nor in their export baskets.
Instead,. Davies contends that resource-endowed countries are â€œanything but examples
of sustainable or inclusive growthâ€. Further, he states that wealth is unable to
trickle down to broader society from narrow extractive industries, particularly in
the face of rent-seeking governments.
â€œNigeria is the leading example of a resource exporter where the disconnect between
previously high headline growth figures and developmental reality has been stark.
The country has never been as dependent on oil as it has been in recent years, with
over 90% of its export earnings coming from oil,â€ Davies mentions.
He comments that, for Africa, as a whole, the figures are â€œtroublingâ€, as commodity
exports on average account for 80% of total merchandise exports. Moreover, he notes
that, in almost half of Africaâ€™s economies, commodity exports earn 90% or more of
merchandise export earnings. â€œFor three-quarters of African countries, commodity
exports make up 70% or more of export earnings,â€ Davies adds.
He affirms that, owing to this lack of diversification, most of Africaâ€™s economies
remain dependent on the vagaries of commodity prices in the international market and
often on the price of a single resource.
Bertoua Savanna Local Miners Cameroon
EMAIL: [email protected]
C/O CHIEF BALIKI MASANGO