Moving Africa beyond the Resource Curse: Defining the “Good-Fit” Approach Imperative in Natural Resource Management and Identifying the Capacity Needs

Abstract

“Resource curse”—a paradoxical situation in which countries with an abundance of nonrenewable resources experience stagnant growth or even economic contraction—has become an important cautionary concept in discussing potential scenarios for the recent natural resource-led development efforts in Africa (Barma et al. 2012). The historical and contemporary records of many natural resource-dependent African countries justify the concerns that have been evoked in the resource curse discussions (Besada 2013). However, the need for caution inherent in policies aimed at avoiding resource curse has often led to timid (conservative) policies with some important unintended consequences. For instance, well-intentioned stakeholders in the natural resource value chain (e.g., extractive industry developers; development partners such as the World Bank and International Monetary Fund (IMF); nongovernmental organizations (NGOs) such as Revenue Watch and Oxfam International; and civil society organizations) have pushed African countries to implement “best practice” policies such as saving abroad in the form of sovereign wealth funds, oil stabilization funds, etc., as strategies to avoid the resource curse. However, given that the rate of private return on investment in Africa is higher than in any other region (Collier and Warnholz 2009), saving abroad could have a stifling effect on the development aspirations of African countries than what the resource curse itself could entail.