Natural Resource Curse In Africa

The African continent, a region blessed with abundant natural resources such as minerals, coal, oil and gas is paradoxically plagued with the natural resource curse. Countries like Nigeria, Angola, Equatorial Guinea, Libya, Egypt and South Sudan have been plagued with conflicts, high levels of inequality and poverty. This “paradox of plenty” discussed in the field of development is portrayed by misuse of resources, corruption, weak institutions, fragile states etc. of countries that are endowed with natural resources and empirical studies have actually proved that the curse really exists. Several experts have conducted studies and suggested ways for these countries to turn this curse into a boom instead as seen in the case of Botswana.

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It cites an example of the Arab countries and how they have generated wealth as proof that the natural resource curse is avoidable.

The paper also addresses the following key questions:

• Is the availability of natural resource a curse in Africa?

• Has its management led to slowdown of growth and development in resource rich countries?

• How does price volatility of resources impact growth?

• What has enabled some resource rich countries to flourish whilst others are still struggling?

• Does being a landlocked country could impact development

• How can the resource curse be avoided in the future?

Furthermore, there’s the discussion on institutional arrangement, which could affect the outcome of resource management. Countries with producer friendly institutions avoided the curse whereas countries with grabber friendly institutions are underperforming in spite of their resource endowment.

Generally, the paper examines the features of resource-rich countries, explaining why resources could hamper growth and it additionally proposes some solutions and recommendations and also highlights World Bank’s principles for

Equatorial Guinea hoped to be an exception however as predicted by the times, 17 years later the country is a high income country with the highest GDP per capita on the continent yet poverty level and inequality plagues this country whereas the son of the president, is known for his shopping sprees and acquiring numerous assets abroad. He’s under investigation for money laundering (Bekele,