Many African countries face a dilemma. After a decade of consistent economic growth, often propelled by high commodity prices, half the continent’s population still lives in poverty. Even if rising demand for raw materials from the booming cities of China and India, among others, has driven growth in Africa’s mining sector, most of the continent has not yet translated mineral wealth into industrialization and widespread economic development. Most African countries continue to export raw materials and then pay a premium to import the products made with them.
Twenty countries in sub-Saharan Africa are classified as “resource-rich” by the International Monetary Fund. Most of these resources are minerals such as iron ore, gold and bauxite, as well as oil and gas. But of these, 14 are ranked higher for GDP per person than they are for their score on the UN human-development index. So what constrains such resource wealth from yielding greater development gains?
At Indaba Mining, the annual gathering Feb. 3-5 in Cape Town of leaders of Africa’s mining sector—from government, corporations and civil society—the words “sustainability” and “stakeholder outreach” were ubiquitous. This focus on sustainability issues reflects impressive progress made in recent years around how mining can contribute to shared value.