Boyd, Roosen, Quartermain: It takes grit, invention, luck to make the big time
Mining industry legends discuss the backstories on their multibillion-dollar successes.
With such a massive resource extraction industry on the African continent, an economic success story in Africa is often viewed as the result of an oil boom or large investments in the mining industry.
Take Zambia, where copper mining is credited with helping the country boost its GDP 6% between 2005 and 2012.
But according to the Economist, a recent report on sub-Saharan African economies by the International Monetary Fund (IMF) is challenging the perceived value of the resource extraction industry on African economies.
“Eight of the 12 fastest-growing economies in Africa in recent years did not rely on natural resources,” the Economist writes. “Together these economies grew more quickly even than the group of oil producers.”
The country looked at six of these countries, Burkina-Faso, Ethiopia, Mozambique, Rwanda, Tanzania, and Uganda, to discover what was driving the growth. These low-income states each experienced “GDP growth of at least 5% a year on average from 1995 to 2010, and growth in GDP per head of at least 3% a year,” the Economist reports.
According to the study, some key drivers were improved macroeconomic management, stronger institutions, increased aid, and higher investment in human and physical capital.
These measures translated into controlled inflation and public finances and higher tax revenues.
The Economist also notes that, based on World Bank data, these nations are generally less corrupt, enjoy more stable politics and are better governed than their African peers.
In spite of the “robust growth” achieved so far, the report notes that these countries still face “low productivity and capital stocks, significant infrastructure gaps, and limited structural transformation.”
Although the IMF classified these countries as “not resource intensive” during the years examined in the study, this is not the case today. Gold now accounts for a significant portion of Burkina-Faso’s economy. Meanwhile, investment in Mozambique’s natural resource sector is expected to fuel significant economic growth over the next few years as natural gas and coal become major industries.
2 Comments
frankinca
Mining and farming are the major sources of work and export and users of people in these self-supporting developing economies. Manufacturing depends a lot on infrastructure and education.
george
It is useful to know the actual per capita volume of business versus percentage growth. This report appears to be an example of useless statistics to reach a useless conclusion for the purposes of the investigator or writer. If one has a base of 50 and doubles to 100 this is a 100% “growth” , versus a base of 1000 and an increase of 100 which is a 10%” growth”. By the logic of this article the folks in the 100% growth are better off ???