African Resources: Blessing or Curse?

By Gregory Simpkins

Over the centuries, the natural blessings of Africa seem to have been more apparent to outsiders than even the rulers of African countries. Of course, the absolute value of gold was apparent to African leaders dating back to the days of Mansa Musa – believed to be the wealthiest man in history with a net worth that would today total an estimated US$600 billion. Throughout history, Africans have traded in various commodities, including minerals, but the stakes and values have gone up exponentially in recent decades without a corresponding improvement in good governance that provided the benefits of African resources to citizens or refinement of negotiating tactics with foreigners seeking to exploit them by the Africans who control these resources.

Humans have used ivory throughout history for use in products ranging from jewelry to piano keys to priceless religious art objects. Until recently, the killing of African elephants for their tusks was not a major international issue. In the 2012 National Geographic special Battle for the Elephants examined the so-called “ivory frenzy” of the early 1900s. It was estimated that Africa’s elephant population had declined from 26 million elephants in 1800 to fewer than one million at that point. The loss of animals such as elephants and rhinos negatively affects tourism.

In 1870, a chance discovery of diamonds in the Kimberly region of South Africa and the 1886 discovery of the world’s largest gold fields in that country’s Witwatersrand area led to a rapid influx of international mining concerns and also colonial rule by the British. At that time, foreigners were better able to exploit these resources on international markets, but imagine what could have happened if these resources – and their governments – remained under African control.

Resource curse

When I was originating topics and managing Congressional hearings, we did several examining the impact of Africa’s resources on the continent. In a July 18, 2013, hearing entitled: “Is There an African Resource Curse?”, Rep. Chris Smith, then-Chairman of the House Subcommittee on Africa, Global Health, Global Human Rights and International Organizations, explained what the so-called resource curse means.

“The resource curse refers to the paradox in which countries and regions with an abundance of natural resources, specifically non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources,” said Smith. “This is believed to happen for many different reasons, including a decline in the competitiveness of other economic sectors, the volatility of revenues from the natural resource sector due to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions.

“Africa has abundant natural resources – from critical and desirable agricultural products such as gum arabica to strategic minerals such as cobalt, titanium, and coltan to energy resources such as petroleum and natural gas. However, under the so-called African resource curse, African citizens don’t benefit from these resources to the extent that would be expected. Education, health care, and other services too often are not provided to citizens by their governments who profit from African resources, but rather are too often paid for by donors.”

In that hearing, Mohammed Amin Adam, Executive Director of the Africa Centre for Energy Policy in Ghana, referred to “problems of the quality of institutions managing these resources, the quality of investment of revenues from resource exploitation and the level of accountability of officials involved in managing large inflows of revenues.”

Poverty

“These countries often see their people live in abject poverty, plagued by conflicts, ignorance, illiteracy, and disease despite their resource wealth. This phenomenon has become known as the ‘’resource curse’’. The ‘curse’ has also been described as the ‘paradox of plenty’ and oil referred to as the ‘devil’s excrement’ by Juan Pablo Perez Alfonzo, the co-founder of OPEC,” Adam testified.

At that same hearing, Corinna Gilfillan, Director of U.S. Office of Global Witness, laid the blame for any negative impact of African resources on poor governance.

“In 2010, the value of exports of oil and minerals from Africa was worth US$333 billion, about six times the value of exported agricultural products (US$55 billion) and nearly seven times the value of international aid (US$48 billion). Such resource wealth has the potential to lift many of the world’s poorest out of poverty and bring about significant development opportunities. Yet due to weak governance and corruption, natural resource revenues don’t always reach government accounts and are looted by the very politicians entrusted with developing their country’s economy,” Gilfillan testified.

Petroleum became a much sought-after commodity with the growing use of combustion engines in the 20th century. Africa became a site for petroleum exploration and exploitation by foreign companies that made deals that favored themselves but not African societies as a whole. I have seen Nigerian officials create mandatory contribution schemes for foreign oil companies, but rather than use these funds for public works, revenue got siphoned off into the accounts of the elites.

Pollution from oil spills in the Niger Delta were lamented, but collected funds weren’t used to prevent such spills or clean them up once they occurred. Joining the Organization of Petroleum Exporting Countries (OPEC) did not put African oil producers in a prominent decision-making position among the world’s major oil producers. Rather, it provided cover for oil pricing decisions that negatively affected Nigerian consumers.

Why should a major oil-producing nation see long lines for petroleum purchases by consumers and be forced to apply fuel subsidies that strained national budgets?

Advanced geophysical survey techniques, such as magnetic, gravity, and seismic methods, have uncovered oil deposits in countries outside the usual oil-producing nations in Africa. But will these discoveries lead to an oil boom that broadly benefits citizens, or will these discoveries go the way of previous discoveries, causing conflicts over resource sharing and failure to lift citizens out of poverty despite abundant natural wealth?

Conflicts

In recent decades, minerals such as tin, tantalum, tungsten, and gold – also known as conflict minerals or 3TG – became increasingly sought-after commodities for their use in electronic equipment such as cell phones, computers, and fluorescent light bulbs. Tin is often used to coat other metals to prevent their corrosion and to create alloys. Tantalum stores electricity and is used in alloys for its strength. Tungsten is typically used in tools, cell phones, and high-temperature situations, and also is used in alloys for its strength. Gold, which most notably used in jewelry and decorative products, also has industrial uses because it is malleable, is not highly corrosive, and is highly conducive to electricity and heat. The modern world needed these materials, and a scramble has occurred in Africa to obtain them – legally or not.

The exploitation of these elements in East Africa has led to conflicts involving the Democratic Republic of the Congo (DR Congo), Rwanda, Burundi, and Uganda. Conflicts not involving resources have been exacerbated by illegal mining to raise revenues by at least some of the estimated 113 armed groups that have operated in that region over time.

More recently, minerals known as rare earth elements have come to prominence as much-desired materials. They are 17 nearly indistinguishable, silvery-white soft heavy metals used in electrical and electronic components, lasers, glass, magnetic materials, and industrial processes. They have become indispensable for renewable energy equipment.

As the world increases the use of electric cars, wind turbines, and solar panels, will we see a surge in conflicts in Africa as illegal operators try to cash in on the boom in rare earth minerals? Since Chinese interests dominate the market in mining and processing such elements, perhaps conflict in recovering such resources will be minimized, but will the Chinese refuse to purchase illegally-obtained minerals from outside their mining control?

The resources known to be of benefit to society must be managed in a more broadly beneficial manner. Permission to extract resources must allow for benefits to be extended to a country’s population

Now a new element reportedly was discovered that could impact mining in Africa – legal or illegal: so-called “electric rocks” said to have been discovered in the DR Congo.

In a January 22, 2023, Instagram report, a man was shown holding a shiny rock that appears to produce electricity and illuminate a small light connected to it by wires. Perhaps the first red flag about this “discovery” came with a tweet that refers to the electrically charged stone as “vibranium,” the fictional material central to the plot of Marvel’s Black Panther movies. These reports have been disseminated many thousands of times since the original Instagram account. However, the initial determination by geologists is that this is a hoax. In a January 30, 2023, report in USA Today, scientists said that while some minerals can conduct electricity, rocks cannot generate or store electricity. Ironically, some scientists say the stone in question could be pyrite, also known as fool’s gold.

Whatever the determination on electric rocks, the resources known to be of benefit to society must be managed in a more broadly beneficial manner. Permission to extract resources must allow for benefits to be extended to a country’s population. That is, of course, a shared responsibility between the governments of countries in which resources exist and the foreign interests that want to extract them.

It has been frustrating to attend meetings with African government officials asking for abundant aid when their own resources should allow for social services to be provided and job creation to take place. Current resources – even without startling new potential discoveries – must provide for the needs of citizens and not just elites and foreign interests. Utilizing these resources properly will allow for broader benefits to all and move African countries closer to self-sufficiency.

Gregory Simpkins, a longtime specialist in African policy development, is the Principal of 21st Century Solutions. He consults with organizations on African policy issues generally, especially in relating to the U.S. Government. He also serves as Managing Director for the Morganthau Stirling consulting firm, where he oversees program development and implementation. He further acts as a consultant to the African Merchants Association, where he advises the Association in its efforts to stimulate an increase in trade between several hundred African Diaspora small and medium enterprises and their African partners.