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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Executive summary

Africa is hugely endowed with diverse natural resources, including land and water for agriculture, forests for wood and non-wood forest products, and minerals, oil and gas for mining. For decades the direct exploitation and use of these natural resources have dominated the continent’s economies and the livelihoods of most of its population—and, to a lesser extent, its public domestic revenues. But Africa’s overriding strategy of exporting commodities in their raw, non-valued-added form has failed to produce sustainable inclusive growth, improve people’s wellbeing or diversify and transform its economies.

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