Leveraging resources for infrastructure development in Africa

Under the theme “Delivering on Africa’s Promise”, the 23rd World Economic Forum (WEF) on Africa will provide an important platform for regional and global leaders from business, government and civil society to deepen the continent’s integration agenda and renew commitment to a sustainable path of growth and development.

There is no question that poor infrastructure is one of the greatest inhibiting factors for economic and social development across Africa, or that the continent’s rich natural resources are its best leverage for turning this situation around. Increasing resource demand – largely from Asia – is unmatched by available railways, roads, and ports (to say nothing of energy infrastructure) to extract and deliver commodities to markets. Infrastructural inefficiency leads to high transaction costs, reducing the competitiveness of African economies and stifling growth.

Social and economic development

The African Union‘s Africa Mining Vision (AMV), adopted by Heads of State in 2009, makes a strong case for using mining as a catalyst for social and economic development on the continent. According to the AMV’s website, its ultimate aim is to:

Open out mining’s enclave status so that Africa can move from its historic status as an exporter of cheap raw materials to manufacturer and supplier of knowledge-based services”.

Accordingly, this is…

Not just a question of improving mining regimes by making sure that tax revenues from mining are optimized and that the income is well spent – although that is clearly important. Rather it’s a question of integrating mining much better into development policies at local, national, and regional levels. That means thinking about how mining can contribute better to local development by making sure workers and communities see real benefits from large-scale industrial mining and that their environment is protected.

It also means making sure that nations are able to negotiate contracts with mining multinationals that generate fair resource rents and stipulate local inputs for operations. And at regional level, it means integrating mining into industrial and trade policy.”

Africa Mining Vision

A key aspect of implementing the AMV is the development of infrastructure to service resource corridors in specific regions of Africa. And this is where the interests of capital and development are likely to clash. If mutually beneficial relationships between African governments, private investors and foreign trading partners are to be arrived at and another ‘scramble for Africa’ averted, there will have to be substantial give and take in all directions.

The subject of “Infrastructure Development Through Mining” is being debated today at the World Economic Forum on Africa, and will cover topics such as how to capitalise on the mining sector to maximize infrastructure development, moving from single- to multi-purpose projects, resource corridors, and new financing models that leverage investment partnerships.

What are some existing examples of resource-related infrastructure development? What do the continent’s existing resource corridors teach us about the relationship between resource anchor projects, infrastructure development, and private investment? These are all questions that we’ll be interrogating over the course of today…

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David Okwara

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