The N atural Resource Curse in Sub-Saharan Africa: Transparency and International Initiatives

Abstract

The Sub-Saharan Africa (SSA) region has become a classic case of the resource-curse phenomenon characterized by the abundance of natural resources, low economic development, and misuse of natural resources. Economic-development experts debate ways to overcome or avoid the resource curse to advance SSA countries into developed countries. Only one natural resource-rich country in the region, Botswana, has succeeded in becoming an upper middle-income country using its natural resources, making the possibility of replication of this achievement difficult. The literature aligns in the belief that the economic and political well-being of resource-rich nations depends highly on the actors involved. National and international policies and regulations must overcome the resource curse. However, the literature falls short of clarifying the types of governance traits and international interventions required to overcome this phenomenon. The Extractive Industries Transparency Initiative (EITI)—a global initiative established in 2002 that seeks to improve the management of natural-resource wealth in implementing countries through increased transparency—is one of the international initiatives currently being implemented in many Sub-Saharan resource-rich countries. This study examines EITI to explore its influence on achieving resource transparency and economic growth. The study finds that EITI, although often acknowledged as one of the best solutions for resource-rich countries around the world, falls short of increasing the economic growth of participating countries. The study also finds that transparency without other government reforms appears to be weak in promoting economic growth in resource-rich SSA countries.

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