Chinese demand for African minerals has grown hugely in recent years and now represents a critical trading relationship both for the continent’s economic development and China’s growth plans. However, natural resources have a mixed history in driving development, too often succumbing to the “resource curse” spiral of corruption, environmental degradation and in the worst cases conflict.
Last week in China, Dr. Ngozi Okonjo-Iweala –- World Bank managing director and ONE board member –- made an important speech explaining how to consign this “resource curse” to the history books. In her eyes, Chinese investments can be made mutually beneficial by following five key principles: Align Investments with Countries’ Development Priorities; Practice Transparency; Add Value to the Country and its People; Pay What is Due and Do What is Right; and Engage with Local Communities.
The speech as a whole is well worth reading –- and commands attention coming from one of the foremost advocates for transparency and accountability in Africa. While Finance Minister of Nigeria Dr. Ngozi published each state’s monthly financial allocation from the federal government in the newspapers. This allowed Nigerian civil society to hold their leaders to account and cut down on wasted funds.
ONE is campaigning for these principles to be applied to the oil, gas and mining industries. In the US this has already paid dividends with the passing of legislation in July that ensures companies have to publish what they pay governments in countries where they operate – once again empowering civil society. We are now seeking to replicate that legislation in other countries, particularly in Europe.
The importance of getting this right should not be understated. In total exports of all natural resources in Africa were worth roughly $393.9 billion in 2008, nearly nine times the value of international aid to the continent ($44 billion), and more than 10 times the value of exports of agricultural produce ($37.9 billion).
Central to success in this area will be the China-Africa relationship, of which the last word should go to Dr Ngozi:
“If China and Africa could work together in a transparent and mutually beneficial way, I am convinced that when history is written, this collaboration will be a strong part of the economic recovery story post financial crises.”