African Governance Report V - 2018

Natural Resource Governance and Domestic Revenue Mobilization for Structural Transformation

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Exploitation of natural resources has dominated economic activity in Africa but the benefits have accrued only to a privileged few. The continent’s most common strategy of exporting commodities in their raw (non-valued added) form has led to disappointing results, reflected in unsustainable and non-inclusive economic growth, marginal improvements in the well-being of the population, and low levels of economic diversification and transformation. This edition examines efforts to improve the governance of Africa’s abundant natural resources, emphasizing the need to strengthen natural resource governance institutions and frameworks to enhance domestic revenue, the promotion of economic diversification, and structural transformation.

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Africa is endowed with huge untapped renewable and non-renewable natural resources that account for about 30 per cent of the global supply of mineral resources and 8 per cent of the world’s stock of oil reserves. These resource endowments present both opportunities and challenges to promoting sustainable development on the continent. Today, more than 70 per cent of total African exports derive from the oil, gas and mineral sectors, which account for about half of Africa’s gross domestic product and contribute significantly to government revenues. Resource revenues represent on average about 40 per cent of domestic public revenues in Africa.

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